Corfu Real Estate - Legal FAQ:

Helpful Information for Prospective Buyers of Property in Greece :

•  A good way to source information on available properties at an early stage is through the Internet, asking the respective agents for additional information, like photos and video clips. A substantial number of properties are in fact bought having been viewed only on the Internet.

•  When deciding on the type of property to buy, do not be put off by older properties. Although new constructions have obvious benefits, one should bear in mind that buildings over 51 years old in Greece are subject to a 70% reduction in purchase tax, offering substantial savings to the buyer. However, one should bear in mind that most houses of such age usually require significant renovation that may prove quite costly.

•  Prospective buyers should also bear in mind that the further away the property is located from the sea, the lower the objective tax value of the land the house is built on. This could be up to one quarter of the land tax value of a house built on the coast, thus significantly reducing the purchase tax bill on the property.

•  In the case of buying land, interested buyers should consider that a minimum land-size requirement applies in order to obtain a building permit. Minimum land-size required for building varies according to planning zone. Our civil engineer checks all the land properties we represent to ensure that they meet the respective building conditions and will professionally inform you of the building size allowed for each property.

•  When ready to proceed with the purchase, be advised that you should never pay a holding deposit directly to the owner. The deposit should be entrusted to a solicitor, who will keep it safe for you until all property titles have been cleared of debts of previous owners and that the property itself is cleared of any conflict of ownership. Once the property is clear on both grounds, your solicitor or agent will pass your deposit onto the owner for the conclusion of a trouble-free sale.

As soon as you have decided on the purchase, two things should first be done:

A) Greek law requires that the buyer have a Greek Tax File number in order to proceed with the purchase. This is an easy procedure and should best be done in person to save time, however, should your presence here not be possible, your solicitor here can do it for you, in which case, power of attorney is required enabling him to act on your behalf. Please bear in mind though, that in some such cases Greek bureaucracy may result in some delay. To obtain the Tax File number a copy of your passport and the relevant application form (obtained locally) are required.

B) A bank account with a Greek bank should be opened in your name, ready for the transfer of the sum for the purchase and the relevant fees. To open a bank account in Greece your passport and Greek Tax File number is required. Again, should your presence here not be possible, your solicitor can do it for you.

In the case where buyers wish to apply for a loan with a Greek bank, tax returns from the last two years from your home country will be required. Interest rates on property loans are very favorable in Greece at present.

The day before the transfer of ownership takes place, the buyer is obliged to pay purchase tax on the property to the Greek State . In cases where the buyer's local solicitor has Power of Attorney, he will be able to do this on behalf of the buyer.

Things you should know.

•  When transferring sums of money from abroad or exchanging it, always ask for a Opink slip. This confirms that the money for your property purchase comes from overseas; alternatively you could end up facing a 45% tax bill.

•  The tax value of a property varies, as each particular area is subject to different tax value. The tax is calculated in terms of the land (including the actual building site) and the building itself. The tax on the building is calculated by a square-metre formula starting at 455 euro per metre. A reduction of 70% applies if the building is over 51 years old. 5% is added or deducted subject to the house having central heating facility or not. Your local solicitor will inform you on the actual tax value applying to your property.

•  For the buyer to qualify for the reduction in purchase tax on an old property, the building's age classification issued by the local council should be obtained, a document affirming that the property was built before 1950.

•  When buying a property for renovation, you will need to obtain the relevant permits, which are quite cheap and quick to obtain, as well as adhere to local planning rules and regulations. In case of internal renovation, no permits are required and no conditions apply. You can always ask your local engineer's assistance with this.

•  When buying land to build, you should adhere to planning rules and regulations on size, height, distance from boundaries, etc., for the planning permission to be obtained. Your local engineer's assistance and guidance in that respect may prove most valuable.

•  The buyer as well as the seller is legally obliged to pay an agent's fee of 2% each, payable at the signing of the contract.

Remember:

•  In case where the buyer's actual presence not be possible, the buyer can sign a power of attorney to a local solicitor to obtain the tax file number and bank account on his/her behalf. The solicitor will then also be able to administer the transfer of funds and make all the necessary payments on behalf of the buyer.

•  Interested buyers should seek professional legal advice before entering in any purchase agreement. From our part, our legal advisors would be happy to help you in this matter.