Purchasing Property in Greece. For Non European Citizens

Transcription

1 1 Purchasing Property in Greece For Non European Citizens The purchase of Greek property is governed by Greek Civil Code (articles ). Other provisions and property law rules exist in other books of the Civil Code, and the Code of Civil Procedure, as well as in various special laws. A notarized contract of sale can be effective only if combined with a registration of the transfer with the Land Registry (and/or the newly system of Hellenic National Land Registry which operates in parallel with the Land Registry). Note that in Greek law accession of title to a property is only complete upon registration at the Greek Land Registry. 1. Appoint a Lawyer The purchaser must appoint a Lawyer who will represent him when notarizing the contract of sale keeping an eye on inserting the fair terms and conditions for his protection and interests. Further to this the Lawyer will deal with the following: - Search for the title deeds at the Land of Registry, that means that all previous owners will be checked in order to ensure that there is no mortgage/s or any other encumbrances. - Apply on behalf of the purchaser for the Tax Registry Number (AFM). - Trascript at the Land Registry the contract of sale. -Open bank account in Greece, either Greek bank or foreign brunch located in Greece. The lawyer will further pay on your behalf the following fees and/or taxes: - Transfer tax; - Municipal tax;

2 2 - Land registry fees; - Public notary s fees; - Any utility fees. - Bar association expenses In Greece representation by lawyers is mandatory when notarizing contracts of sales. Please note that it is obligatory the lawyer s presence during the conclusion of a property transfer if the value of the transaction exceeds the amount of over Euro. The obligatory presence of a lawyer means that not only he will be present during the conclusion of the contract, but that he will sign the document himself as well. 2. Public Notary The lawyer will represent the Purchaser at the Notary Public where the contract of sale is signed. The signing of the notarized contract of sale takes place before a notary, after the collection of necessary legal and appropriate supporting documents, such as a true copy of the building permit, a solemn protestation by the seller, concerning the statement of his property income before the competent tax authorities, a certificate of conformity for payment of Local Authorities taxes, a certificate for the declaration of inheritance tax or gift tax to the competent tax authority, when the property is acquired by virtue of succession or gift, a tax and insurance certificate for the seller, a certificate of payment of the transfer taxes to the competent Tax Authority of the property, an Energy Performance Certificate by the seller, etc. The purchase of the property is concluded only by signing a notary deed, which is a public document drawn up, signed and ascertained by a Notary Public. As a public document the notary deed reassures the accuracy and validity of the agreement between the contracting parties. Any property purchase agreement, in order to be valid, must be written by a notary public and signed in the lawyer`s presence. The recordation of the transfer title takes places either at the Land Registry Office and/or at the Hellenic National Land Registry (National Cadastre and Mapping Agency) of the region where the property is located, after the submission of the notary act and a summary of it, along with an application

3 and the payment of the recordation fees. The certificates of recordation of the transfer act are granted within a reasonable period of time. The notary fees vary according to the purchase price. It is generally around 1.2 % of the property value. Extra charges will paid to the notary depending on the value, the number of sheets of the contract and copies of the contract (p.e contract of 10 sheets with 2 copies= plus 23% VAT). 3. Title and documentation search It is the Lawyer's obligation to search the title deed and all documentation at the Land Registry and/or the Hellenic National Land Registry and bring all information to the public notary. The search must be carried out in order to secure that: 3 - The vendor holds the absolute deed of the property. - The property is unencumbered. - All property taxes burdening the seller have been paid. Property title deeds and their transactions can only be accessed and researched by Lawyers. From the Land Registry files the Lawyer can determine the status of the title and their Legal order. The Lawyer can determine if there are any burdens or liens against the estate and then give advice as to what steps to take to clear the title. 4. Number Tax Registry The Lawyer will issue a tax registry number for the purchaser in order to proceed with any transactions. The tax registry number is applied for and issued by the local tax authority. Thus a copy of your Passport and full details should be given in prior. Mainly, it has to be stated the First name and Surname of the Purchaser and also his father and mothers name and Surname separately. 5. Taxation Transfer and Municipality Taxes The Lawyer will assist the purchaser prior to the signing the contract to pay the transfer tax to the local tax authority on the given contract price. Transaction Taxes:

4 o 8% for the value of the property up Euro and 10% for the remaining value above Euro 20,001. Municipality charges 3% on the transaction tax or o VAT 23% of the property s value if the property was built after Property transfer tax return After the transfer tax is paid the department of Capital of the Tax Office grants a copy of this transfer tax return that must be attached to the notary s contractual act. Municipality tax The Municipality tax is 3% on the amount of the transaction tax. Property Tax The Purchaser is obliged to pay an annual property tax of the objective value of the property with the first 200,000 being exempt. IF the objective value exceeds the 200,000, then the follow is applicable: From 0-200,000: 0% From 200, ,000: 0,2% From 500, ,000: 0,3% From 600, ,000: 0,6% From 700, ,000: 0,9% From 800,001 and over: 1% Capital Gains Tax For properties purchased, donated etc. after the 1st January 2013 the new Capital gains tax 20% will effect a sale of this property in the future. This Capital gains tax will have to be fully paid before the execution of the transfer of the property, will be imposed on the difference between the acquisition cost (price that is written on the purchase notary contract) of the real estate 4

5 property to be transferred and its sales price. This difference is inversely proportionate to the time of ownership of the real estate to be transferred, according the follow table reducing the difference: Years property remained at the Reduction factor ownership of the seller (inflation adjustment) of the capital gains Over 25 years 0.60 Inheritance tax Inheritance tax applies to the Greek property with generous exemptions according to the degree of relatives. In general up to exemption, 1% tax rate up to , 5% tax rate up to Signing the contract As already noted in order to have a valid contract, it must be signed in the presence of a public notary in the presence of a Lawyer. When the contract is signed, the transaction will be registered at the Land Registry. 7. Transfer at the Land Registry The purchaser's Lawyer makes sure that the title is transferred to the buyer's name, by obtaining the relevant certificate from the Land Registry. 8. Notify the Land Registry for the transfer A copy of the title and the certificate from the Land Registry of the property needs to be registered under the buyer's name at the Land registry. 5

6 Please note that not all regions of the country have such a registry, as Greece is currently undergoing the process of establishing its Land Registry. In areas that do not yet have a Land Registry, ownership of property is based on and secured by the local Registry of Mortgages. The current registration costs are set at % of the asset value plus cost for the isuuance of Certificates 50 euro approximately. Immigration Permit in Greece For Non European Citizens All non European Citizens, with minor exceptions need visa to enter Greece. Non EU citizens who wish to reside and/or work in Greece should acquire an entry permit visa for working purposes. By decision of the General Secretary of Decentralised Administration, a residence permit for five (5) years is issued to a third-country citizen, if he/she has obtained a type D visa - after applying to the local Greek Consulate and legally owns, either personally or through a legal entity whose shares are wholly owned by him/her, property in Greece. Failure to obtain the correct type of entry visa could affect the issuance of the residence permit and even not to allow for applying for it. Non EU nationals who need a visa to travel to Greece must apply for this at the Greek Consulate General or Embassy in their county of residence. Visas have maximum validity of 90 days. The residence permit application, together with the relevant supporting documents should be filed while the entry visa is still valid (duration of 90 days). If the third country citizen fails to file his residence permit application within this period he will have to leave Greece in order to return to his country of origin to renew the entry visa. A residence permit is granted with a purchase of property with a minimum value of As it has been already mentioned a Residence Permit for 5 years is issued to non EU nationals which can be renewed every time for a 5 year duration, provided that the property remains unchanged in its legal ownership status and the contracts of ownership remain in effect. The period of residence under these specific conditions is not taken into account in cases of granting citizenship to said residents. 6

7 The aforementioned non EU national (property owner) may be accompanied by the members of his family and upon their own request family members may be granted a personal residence permit that is renewed and/or expires concurrently with the residence permit of their sponsor (property owner). The residence permits do not allow a right of employment of any type. BENEFICIARIES 1) Purchase of a property in Greece with a minimum value of ) Purchase of more (than one) properties with a total minimum value of ) Purchase of property or properties by more than two buyers, with a minimum participation of each ) Purchase of property or properties by spouses with a total participation for both of them (not each) of The residence permit is issued individually for 5 years to buyers and members of their family: - Spouse - Common non-married children under the age of 18 years of age - Adopted children - Spouse s children from previous marriages For children, the residence permit is valid until the completion of 18 years of age. After the age of 18, their residence permit can be renewed annually until the completion of 21 years of age. In any case, adult children over 18 years old can obtain a residence permit, if they purchase together with one of their parents, a property with a minimum value of PRIVILEGES 1) Residence permit in Greece with renewal every 5 years if the property remains at the possession of the Applicant (Buyer). 2) Free entry and exit to and from the territories of Schengen. 3) By buying a medical insurance which is obligatory by the law you will have access and use of the State s Health services (hospitals) and Education (schooling) in Greece. 7

8 For more detailed advice please contact our legal consultants. L.Loucaides Theophanous Lawyers Limited Company Tel: , Fax: , Website: Address: Marathonos 3, Mali House, P.O. Box 60324, CY8102 Paphos, Cyprus 8