Objective value and Market value
Any property in Greece has an objective and a market value:
The objective value is set by the Greek Revenue Department, depending on the location of the property and in accordance with the official estimates registered by the Greek Ministry of Economy and the provisions under the Greek Law.
The Market value depends upon the value that the property in question can get in the market. The market value is as a rule considerably higher than the corresponding objective value. It is on the basis of this value that the purchase price for the property is established.
Real Estate Taxes and Tax Rates
The Greek Law attaches specific real estate taxes to every property purchased in Greece. More specifically: In the event the buyer is one person: 1 for the first €15,000 of the property value, the corresponding tax rate is 7% 2 for the remainder of the value, the corresponding tax rate is 9% 3 for the payable amount deriving from the aforementioned process, the corresponding tax rate is 3% (municipal tax). In the event the buyers are two or more persons: 4 for the first €15,000 x [number of buyers] of the property value, the corresponding tax rate is 7% 5 for the remainder of the value, the corresponding tax rate is 9% 6 for the payable amount deriving from the aforementioned process, the corresponding tax rate is 3% (municipal tax). From the above it is clear that lower taxation is attached to property buyers when there is more than one buyer (for example husband and wife and/or children). Note that: Corresponding tax rates are established based upon the property value stated in the sale/purchase deed.
Property Sale and Purchase Deeds
A property sale/purchase deed states either the objective value or the purchase price based on the market value of the property. It is on the basis of the price stated on the property sale/purchase deed that the taxation on the property in question is established. As a consequence: 1 If the objective value is stated in the sale/purchase deed, the buyer is charged with the minimum taxes attached on the property in question, as provided for by the Greek Law. 2 If the purchase price is stated in the sale/purchase deed, the buyer is charged with considerably higher taxes attached on the property in question, as provided for by the Greek Law. From the above it is clear that lower taxation is attached to property buyers when the price stated in the purchase/sale deed is the objective price. Note that: 1 Which value is to be stated in the sale/purchase deed depends totally upon the wish of the buyer. 2 The market value of the property is by no means affected by or dependent on the price that might be stated on the sale/purchase deed. 3 Buyers who enter loan agreements with banking establishments in order to purchase property are obliged to state the full amount of the loan they wish to receive in the sale/purchase deed. This could either be the full purchase price of the property in question or part of it. 4 The minimum price that can be stated in a sale/purchase deed is the objective value of the property in question. This also means that buyers who wish to receive a loan that amounts to less than the objective value of the property in question are nevertheless obliged to state the full objective value in the corresponding sale/purchase deed. 5 The market value of the property is by no means affected by or dependent on the price that might be stated on the sale/purchase deed.
Other Expences
Property owners are charged with the fees and expenses that a sale/purchase deed entails. These include: 1 Notary Public Fees Approximately 2% on the price stated in the corresponding sale/purchase deed. 2 Solicitor Fees Approximately 1.5% on the price stated in the corresponding sale/purchase deed, covering all legal procedures, including the documentation on the property ownership titles (clear titles, free of mortgage). 3 Land Registry Expenses 0.5% on the price stated in the corresponding sale/purchase deed, payable to the Hellenic Land Registry, in order to receive a certificate establishing that the property in question is in their name.
Utlilities
Property owners are charged with one-off expenses entailed in obtaining the services provided by the Greek public utilities. These include: 1 Electricity Grid (Hellenic Public Power Corporation) Approximate charge: € 2,500 2 Local Water Supply Grid Approximate charge: € 500 3 Local Sewer System (when such system exists) Variable charge depending on the municipal district
Other Taxes
Property owners are charged with secondary taxes attached on any property in Greece. These include: 1 Municipality and Real Estate Taxes Approximate amount: €14 per month 2 ERT – Hellenic Broadcasting Corporation Approximate amount: €3 per month Note that: 1 Property owners are notified of the aforementioned tax charges by means of the bill they receive for electric power consumption (by the Hellenic Public Power Corporation), due once every two months. Charges depend on the location of the property, the total surface of the residence and how old it is. The said bill includes also the charge for the electric power consumed in the given period.
Greek Taxpayer Identificarion Number (TIN)
Foreign natives interested in purchasing property in Greece are obliged to acquire a Greek Taxpayer Identification Number (TIN), which is imperative for the corresponding purchase/sale deed. Foreign native buyers can be serviced at the “Foreign Natives’ Department” of the Greek Revenue Department. There they are asked to submit a true copy of their passports and to fill in an application (M1). By means of this process they are immediately assigned a Greek TIN, registered in the service’s records.
Purchasing a Property in Greece, Proceedures
Once a deal is reached between the parties involved, seller and buyer, the relevant sale/purchase deed must be signed before a solicitor and a notary public. A sale/purchase deed specifies the terms and conditions of the sale/purchase in question, including when and how interim instalment payments and final payment in full are to be made, as well as when and how construction works are to be performed and completed. Terms and conditions in deeds should usually provide for: 1 5% down payment as earnest money for the property, 2 15% deposit upon the signing of the sale/purchase deed, 3 regular instalment payments, in accordance with the agreed value and progress of works, and 4 a final 5% balance, once the buyer has checked everything and has ascertained that the works of the project have been completed to his/her satisfaction. Instalments on properties should be paid through Banks. More specifically:
1. If the property development project is self-financed, buyers pay in the requested instalments to a specific account.
2. If the property development project is financed by means of a loan, the Bank granting the loan pays the corresponding instalments, in accordance with the progress of works, as expressly stated in the signed sale/purchase deed and always upon the buyers’ orders.