Greece Real Estate

Greece real estate

The Greek real estate market was growing steadily for almost a decade before the global financial crisis of 2008–2009 triggered a sharp decline around the world. Although recovery was slower in Greece than in stronger economies, buying property in the country is still regarded as a safe, almost-risk free investment. Today, after 10 years of trending downwards, the country’s property market is once again attracting foreign buyers.

According to the Bank of Greece, at the end of 2017, real estate in Athens was 44% below its peak in 2008. However, this drop in property prices has rapidly slowed in recent years. The square meter price fell by 5.3% in 2015, by 1.8% in 2016, and by only 0.9% in 2017. In quarterly terms, prices remained consistent in the last quarter of 2017, and in the first three quarters of 2018, house prices finally showed a marginal increase for the first time since 2008.

Over the past few years, the real estate market has been thriving, thanks mainly to investments related to a booming tourism industry; tourist arrivals increased from 15 million in 2009 to 35 million in 2018. Given the attractive Greece Golden Visa Program and the popularity of Greece as a holiday destination, demand for holiday homes is rising, especially on the popular Greek islands.

Are there any restrictions on the acquisition of real estate in Greece by foreign buyers?

Some restrictions apply to non-EU nationals seeking to acquire real estate in border areas (Article 24, Law 1892/1990) such as the eastern Aegean, the Dodecanese, Thrace, and other regions of northern Greece. Restrictions may be lifted upon special request with an indication of the property’s intended use. A license to acquire such property is granted by the Ministry of National Defence following a request submitted to the relevant committee of the decentralized administration in that region.

How can immovable property in Greece be acquired?

After obtaining a tax identification number and opening a bank account, the buyer must conduct a land registry search to ensure that the chosen property is free of encumbrances. Once cleared, the transfer tax is paid, and the final contract is signed by the buyer and the seller before a notary. The contract of sale is registered at the local land registry as the absolute proof of ownership. Within three months, the property must be registered with the tax authorities. The process can be handled by proxies.

Does the applicant need to open a bank account in order to purchase property, and if so, what is the procedure?

The opening of a bank account is not a prerequisite; however, it facilitates the transaction and tax procedures related to the ownership of a property. A bank account can be opened in person or via power of attorney. The applicant must also provide a list of required documents (such as proof of tax residence, proof of address, and source of funds).

What additional expenses will the real estate transaction incur?

In addition to the actual cost of the property, some other expenses will be incurred, most of which are based on the ‘assessed tax value’ of the property.

• Notary fees: 1.5–2% + VAT of the property value
• Land registry fees: 0.5–0.7% of the property value
• Transfer tax: 3.09% of the property value, payable to the revenue service
• Real estate agency fees (where applicable): 2% + VAT of the purchase price
• Travel and accommodation expenses for due diligence on properties outside Athens EUR 350–500

What kind of returns can be expected from property investment in Greece?

Properties are reasonably easy to let. An owner’s annual return from the lease, after expenses and taxes, is estimated at around 4–5%. In central Athens, the gross rental yield on apartments is about 4.49%, while outside the city center, it is about 4.05%.

How is rental income taxed?

Greece has a progressive taxation system. The income tax on rental income is 15% per annum for the first EUR 12,000, 35% between EUR 12,000 and EUR 35,000, and 45% thereafter.

What other immovable property-related taxes and charges are imposed in Greece?

All property owners in Greece (including those who invest in real estate to acquire a Greek residence permit) are liable to pay tax on immovable property in Greece or the income that may arise from such property, regardless of their domicile or residence. Uniform real estate property tax (ENFIA) is calculated based on the location, price zone, surface, floor, year built, and other similar factors. It is approximately EUR 5–10 per m2 annually (roughly calculated as 0.2% of the taxable property value), depending on the tax value of the property.