When it comes to selling property in Greece, understanding the rules and regulations governing real estate transactions is not just advisable—it’s essential.
Greece, with its stunning landscapes, rich history, and vibrant culture, has become an attractive destination for property investors and those seeking a Mediterranean dream home. However, navigating the intricacies of property sales in Greece requires a firm grasp of the legal and bureaucratic framework in place. From property taxes to documentation requirements and zoning laws, knowing the rules is paramount for a smooth and successful property sale in this beautiful Mediterranean country.
Whether you’ve recently inherited a property or are planning to sell one that’s been in the family for generations, understanding the intricacies of this transaction is crucial.
In this article, Greece lawyer John Tripidakis, delves into the essential rules and guidelines you need to be aware of when selling property in Greece,
What you need to know:
Conveyancing in the U.S., Canada, Australia and some other countries, might be straightforward, simple, fast and cheap. In Greece, this is not always the case. The main reasons, amongst others, are:
- The new Land Registry Cadastral (“Ktimatologio”) and the central computerization of properties, has not been accomplished, as yet;
- The existing old Titles’ Office system (“Ypothikofylakeion”) is a Registry by name and not by property, hence it is the name of the owner that is recorded and followed and not the property, as such;
- Building zoning regulations, forest, archaeological, beachfront or other administrative ownership issues, need to be carefully reviewed and secured, especially when land is involved;
- The Greek State is trying to get municipal/tax evasion and illegal building through conveyancing; so, a substantial number of certificates and documents are required to be produced by the seller, from Authorities that are not always electronically connected amongst them;
- Opening a bank account for the deposit of the proceeds of the sale, can be a challenge, since it requires a lot of documentation from your country of origin to be produced (e.g. tax residency certificate, foreign Tax Return/Notice of Assessment, employment letter from your employer, municipal rates requests, confirmation of address from your local Council, electoral list registration, utilities bills showing your name, telephone number and address, etc)
I will try and guide you to the steps and documents that are usually required, for the sale of your property in Greece, pinpointing some “red flags”. The main persons involved, are a lawyer, a tax accountant and a civil engineer.
- Legal issues
Your lawyer, amongst others, will:
- Effect a thorough title search at the competent Land Registry (“Ypothikofylakeion”) and Land Registry Cadastral (“Ktimatologio”), where the property is located and investigate all relevant entries under your name. The point is to confirm due/proper status of the title, lack of any lien, mortgage, seizure, pre-note of mortgage and any other encumbrances/legal flaw on the property, etc.
- Apply for and procure all necessary documents and certificates from the above Registries;
- Rectify your Title, if there are any defaults;
- Issue a Municipal tax clearance (“ΤΑΠ”) from the Municipality, where the property is located (if applicable);
- Draft a Limited Power of Attorney, if you are not physically present in Greece for the sale;
- Represent you before all relevant authorities and corporations, execute the sale tax statements;
- Pay all necessary out-of-pocket expenses against receipts;
- Draft and review with the Notary Public the sale Deed; execute same; collecting the money; deposit of the money to your designated seller’s bank account;
- Oversee and coordinate the whole procedure.
The lawyer:
Retain a fully trusted and specialized lawyer, experienced in assisting Greeks of the Diaspora or Foreign Citizens.
Demand all your communications, title search and progression reports to be in writing.
Agree on his fees and out of pocket expenses; demand a detailed Cost Disclosure Agreement before the work starts.
Be extremely cautious with conflict of interest issues. In small and closed societies/cities in Greece, many local professionals could be acquainted or related to your buyer.
- Tax accounting issues
Your tax accountant will:
- Confirm that your tax status/profile in Greece is as a “resident of abroad” (“katoikos exoterikou”);
- Draft and file before the Competent Tax Authority the E-1, E-2 and E-9 tax returns/statements (if such statements have not been already filed promptly and correctly during the previous six years);
- Issue a certificate that you have paid up the property taxes of the last six years prior to the settlement (“certificate of ENFIA”);
- Issue a tax clearance certificate;
- Issue a social security clearance (if required);
- Issue a certificate that there is no inheritance/ parental gift/ gift tax due, in case that the property was acquired by you through inheritance/ parental gift/ gift in 2004 or later;
- File, after the sale of the property, a tax return, showing that the property is sold, so you do not have to pay the land tax any more.
The tax accountant:
Since, you are tax residents of abroad, you need to appoint a local tax agent (if you haven’t already done so). The Greek Tax Authority will never communicate with you, they need a name and address in Greece to correspond.
My suggestion to our clients is to always appoint a qualified, computer savvy and English spoken tax accountant in Greece as their tax agent.
This same person will provide you with your tax internet access codes and can file your tax returns on your behalf when due.
- Engineering issues
Your civil engineer will:
- Draft a recent topographic diagram (survey) with the GPS system and including the current building regulations (where land is involved);
- Procure a copy of the building permit and the relevant diagrams (of the building to be sold) from the Zone Planning Authority, if the building has been constructed after March 14, 1983;
- Inspect the property and provide a certificate that there are no illegal constructions on the property or that the illegal constructions have been legalized against the payment of a fine and/or a fund (paravolo) according to law 4495/2017;
- Assist with , forest, archaeological, beachfront or other administrative ownership issues and clearances;
- Prepare the “electronic building identity” (“ΗΛΕΚΤΡΟΝΙΚΗ ΤΑΥΤΟΤΗΤΑ ΚΤΙΡΙΟΥ”), and file it at the State’s computer system;
Please note that the seller is burdened with the expenses for the issuance of all the above certificates etc. and the respective corrections / fines, etc. (if applicable).
The appraiser
We advise our clients, when considering selling their property, to hire a certified appraiser (and/or a trustworhty real estate agent) , who will assess the current value of the property, so they can make an informed decision about its fair market value.
The real estate agent
The seller usually pays the agent a fee of aprx 2% – plus V.A.T. 24% on top of this – on the value of the property.
Be cautious with the local real estate agents. Do not sign anything to them, or entrust them with money, before you get your lawyer’s specific approval/legal advice in writing.
Fees and expenses
The purchaser is burdened with the conveyance tax and the fees for the Land Registry/Land Registry Bureau, the Public Notary (and relevant expenses), his lawyer, his tax accountant, his civil engineer, his realtor and other professionals he retains.
The seller does not (currently) have to pay Capital Gains Tax in Greece. However he does have to pay for his lawyer, his tax accountant, his civil engineer, his realtor and other professionals he retains. Don’t pay anything over and above that, unless specifically approved by your lawyer. Ask for an estimate/quote of everything, before you proceed.
Third parties “assistance”
Don’t trust your (non professionally qualified) relatives to do the legal, tax or other professional work, just because it is “for free”. Stick to the competent persons and make sure everything is in writing. Legal and tax practitioners have professional competence, knowledge and liability, your relatives don’t.
Final point: All the above procedures can be implemented in Greece through a limited Power of Attorney to your trusted and competent Greek lawyer. Our office has assisted thousands of clients in similar sales, without their physical presence in Greece being required.
September, 2023
By John Tripidakis LL.B.(Athens), LL.M. (London)
Greek Law Practice
John Tripidakis & Associates
For all your legal matters, ranging from Greek Passports, Inheritances, Estates and Real Estate in Greece:
Email: [email protected]
Website: www.greeklawyersonline.gr
USA Office: +1 530 618 5646
Greece Office: +30 21 0894 9037
Australia Office: +61 402 751 102
Also Read: The Dos and Don’ts of Buying Property in Greece
