Presentation by Poly Tsitsoni and businessingreece.gr of investments in real estate.
Real Estate Investments
In Greece, a place of natural beauty and biodiversity, a recent fall of prices in the real estate market has attracted the interest of investors. We distinguish three types of investments:
- purchases of houses or of land to build in order to exploit or to spend holidays or retirement there,
- real estate acquisitions and constructions of hotels or tourist resorts and
- acquisitions for exploitation of private real estate belonging to the Greek State.
- In the hotel sector, the investments involve already existing hotels, or land to build, or franchises for hotel chains.
- In the public sector, the Fund for the Development of Public Treasury Assets (TAIPED), created in 2011 (Law codified 3986/2011) has the objective to develop the private property of the State in the context of scheduled privatizations, in accordance with the provisions of the Framework for the Middle-Term Strategy on Public Finance. Among ongoing privatizations, including for example energy, infrastructure, acquisition of corporate capital, the real estate sector maintains a significant place in the category Land Development. The property of TAIPED counts more than 80.000 buildings of the public sector, managed by Ministries, Utility Companies (DEKO) or the State’s Buildings Company.
- The State’s Buildings Company (ETAD S.A.) has the objective of management, development and exploitation of the State’s private property. The Company was established in 1998, (Law codified 2636/1998). Nowadays ETAD S.A. manages real estate related to tourism industry everywhere in Greece, indicatively hotels, harbours, campings, golf courts, ski resorts, thermal springs, tourist offices, land for tourism development, Olympic Properties and other property titles of the private property of the Greek State.
My home in Greece
For the purchase of or involvement in real estate property, the lawyer collaborates with the notary. Due diligence, which precedes the purchase, is handled by the lawyer, who, among other things, researches the legality of the property titles. It is the same for the purchase, merger or participation in the share capital of the legal entities in this sector. Signing a private pre-sale agreement and advance payment are not necessary, but are commonplace.
- Citizens of countries outside of the E.U have to obtain a special license to acquire real estate property within the border area.
- Citizens of countries outside of the E.U that purchase a residence in Greece have the right to obtain a resident’s permit for 5 years, which is renewable. They have to already possess an entry visa, the price of the property to be bought or rented must exceed €250,000 and the total amount of the purchase has to be paid in Greece.
- In Greece, for real estate evaluation, the system of objective values is applied, that is, the parties are free to define and write on their contract the price to be paid for the purchase, but taxes and transaction costs are calculated on objective criteria already defined by the State.
- The tax on real estate amounts to 3% on the value of the deed, while transactions regarding capital shares or parts of companies amount to 15% on the added value. In addition, each year a Unified Property Tax (ENFIA) is paid, calculated by the Ministry of Finance on the basis of qualitative and objective criteria.
- Generally speaking, we could say that the cost of a real estate purchase is around 5% of its value, a percentage that covers the notary fees, the transcription of the deed and tax; lawyers’ fees are freely determined by the concerned parties.