European Union citizens are allowed to own property in most areas of Greece, including the island of Crete. There are restrictions, however, on the size of home you will be permitted to build, which are dependent on the size and location of your chosen plot. There are currently three main categories of building plot:
IN VILLAGE. If a plot of land is located within a village, town or city often up to 70 or even 80 per cent of the plot is buildable, although permission varies slightly with the size of the plot and from village to village.
BORDER. Plots of at least 2,000sqm and within 500m of the village limit, which are free of forestry or archaeological restrictions, will be granted permission to build a 200sqm home.
OUT OF VILLAGE. Plots of 4,000sq metres plus and further than 500m from village limits, which are free of forestry and archaeological restrictions, will usually be granted permission to build up to 200sq metres.
Property purchases are always executed before a notary public, a civil servant whose job is to record, register and witness all such transactions. The notary is a neutral party and ensures that all the appropriate
tax papers and files are in order prior to signing the land contract, and afterwards is responsible for registering it with the Local Land Registry.
To secure a property, we ask buyers to sign a land purchase agreement and pay a 10 per cent deposit. The agreement contains the names of the parties, the description of the property, the price, the methods of payment and any general conditions negotiated by the parties. The deposit is fully refundable if the seller backs out or some unforeseen problem with the plot is discovered. If, however, the buyer backs out the deposit is non-refundable.
On receipt of the deposit, the buyer’s lawyer will carry out searches at the land registry to ensure the property is legal and has clean titles.
The lawyer will also start gathering all of the official papers from the military office, forestry office, archaeological department and the tax office
The buyer must pays all relevant taxes before the contracts are signed. These mainly comprise a property purchase tax of between 9-11 per cent of the Tax Office assessed value of the property, which is lower than the purchase price. Buyers are also liable for the notary and all legal fees. These, together with administration charges, total about 12-15 per cent of the purchase price. Sales of newly-built houses are subject to 19 per cent VAT, again of the ‘Tax Office’ assessed value of the property. But as we will be building your house for you rather than selling it to you, and the VAT on the materials and labour will already have been paid by us, there is no extra tax to pay on the price quoted in your English Builder building contract.
When it comes to signing the property contract at the notary public (there are more than 3,000 offices through Greece and several in
Hania and one in Vamos), the notary uses a template, and simply changes the sellers’, buyers’ and property details, while adding any pertinent information about the property. The contract, which must be linked to an
official topography of the plot/house, is then signed by the notary, the seller and the lawyer with the power of attorney on behalf of the buyer. Congratulations, you now own a little bit of Crete.
BUILDING LAW: Building permits can be obtained only through registered architects or engineers. We can recommend skilled architects and engineers, who will give advice, work on plans and carry out the procedure for building permission as well as ensure that the reinforeced concrete frame complies to anti-earthquake regulations.
We strongly recommend that you use an independent architect who does not own or work specifically for a building company because the permission is tied specifically to the architect or engineer – unlike in England, where an architect is simply not allowed to be involved by
law. So if you fall out with the builder (not that that would happen with us), you can walk away and find another builder without having to reapply and pay for a second planning permit. Passing building permits and obtaining permission to build can take up to three to four months and can cost upwards of €10,000. (Pool and EOT permits, which are required for letting purposes, are charged separately). As a general guide, building costs per m2 range from €1,500 to €1,700, depending on the build specifications and, in certain locations, ease of access.
TAXING ISSUES: In Greece you are taxed on what you spend rather than what you earn. So once you have bought your plot, you will need to fill out a Greek tax return annually – a task the English Builder can organise for you as part of our comprehensive after-sales service.
But to ensure you are zero rated, you will need to prove that the money you used to buy your property came from outside Greece. This comes in the form of a “proof of exchange” document issued after transferring money into the country by your bank in Crete; these are sometimes referred to as “pink slips” despite the fact that they are no longer pink. The sum transferred needs to cover the assessed value of your property, which is almost always lower than the purchase price. Credit card slips and ATM receipts are not acceptable.
Owners of property here are subjected to a small Public Utilities Tax, which is incorporated in the electricity bill payable every second month. A Property Tax applies to High Value Properties. Owners of real estate property whose “tax office assessed value” exceeds €243,600 for a property owned by one individual or €487,200 where the property is jointly owned are subject to property taxes. For example, properties worth from €243,601 to €390,350 will pay 0.3 per cent annually, while from €390,351 to 537,101 the figure rises to 0.4 per cent.
