Real estate is a crucial part of Greece’s economy. Consequently, the Greek government has instituted several laws and regulations to safeguard the interests of property owners, investors, and other stakeholders. This article offers a detailed guide to the country’s real estate laws, covering topics such as property taxes, capital gains tax, legal compliance, due diligence, building permits, construction, REICs, notarial deeds, the competent land registry, and other critical information.
Property Taxes in Greece
Property owners in Greece are subject to various taxes, including property tax, transfer tax, and income tax. Property taxes in Greece are based on the property’s size, age, and location and are payable annually. The transfer tax is a one-time tax payable when the property is transferred from one owner to another. Finally, income tax is payable on any rental income the property receives.
Capital Gains Tax
Capital gains tax is payable on the sale of real estate property in Greece. According to recent legislation, private individuals don’t have to pay any capital gains tax until the end of 2024. Companies, however, are not exempt from paying tax on any real estate income they may gain from selling the company’s assets.
Legal Due Diligence
Legal due diligence is essential when investing in real estate in Greece to ensure the property is legally sound and free from legal issues. This involves thoroughly reviewing the property’s title, any liens or encumbrances, and any other legal issues that may affect the property. Therefore, investors should seek the legal services of a property lawyer to conduct legal due diligence before making any real estate transactions in Greece.
Building Permits and Construction
Before any building construction in Greece can start, a building permit must be obtained from the local authorities. This permit outlines the scope of the building works and ensures compliance with local building regulations. Failure to obtain a building permit can result in fines and legal consequences. A building construction must adhere to environmental regulations.
Notarial Deed and the Competent Land Registry
The notarial deed is a legal document that must be signed in the presence of a notary public and registered with the competent land registry. This document serves as proof of real estate ownership and ensures that the property is registered correctly with the cadastre office. Therefore, ensuring that the notarial deed is accurate and legally binding is essential to avoid future legal disputes or issues.
Foreign Investment in Greek Real Estate
Foreign investment in Greek real estate has been increasing in recent years, with investors worldwide attracted to the country’s relatively low property prices and a high potential for capital appreciation. In addition, the Greek government has established several initiatives and incentives to encourage foreign investment, including residency programs, tax exemptions, and reduced property taxes.
Additionally, the Greek government is working to streamline the legal framework for foreign investment in real estate, making it easier for international investors to navigate the legal system and invest in Greek real estate. However, it is still advisable to seek the guidance of a legal or real estate professional before making any significant investments.
Receivables Generated by the Property
Receivables generated by the property, such as rental income or service charges, are subject to taxation in Greece. The tax rate range is currently between 15% – 45% depending on the income declared. Property owners are responsible for reporting any receivables generated by their properties and paying the appropriate taxes.
Understanding Greek Property Law
The Greek real estate market has been recovering in recent years after a significant decline during the economic crisis of the early 2000s. The market is still relatively affordable compared to other European countries, with many attractive investment opportunities for domestic and international investors. Hiring a property lawyer to ensure compliance with all applicable laws and regulations is strongly recommended to navigate the complex legal system of Greek law.