Property Laws in Greece
Property law and buying property in Greece
Property law in Greece – legal basis for purchasing Greek real estate
If one wishes to purchase real estate in Greece, the purchase of Greek property is governed by the Astikos Kodikas (Greek Civil Code), which is comparable to the German Civil Code (BGB). A notarized contract of sale and entry in the Ipothikofilakio (Land Charges Register) or Ktimatologio (Land Register) is required for the purchase.
As in German law, in Greek law the accession of title to a property is only complete upon entry in the Greek Land Register.
Greek real estate: the legal differences are in the details
In addition to the contract of sales’ special regulations, the sale is entered in the Greek Land Register. The Land Registry has jurisdiction for specific municipalities. Unlike the German Land Register, for example, entries were previously named and not property related. The law introducing the Ktimatologio switched the previous name-based registers to a property-based Land Registry system. When verifying the ownership status, an entry is verified in terms of the name of the respective vendor and not in terms of ownership status on the basis of entries under the plot numbers. Because of this peculiarity Land Register searches by a lawyer are indispensable in Greece.
Buying property in Greece
The contract of sale
Greek property transactions are put into effect by concluding a notarized, precisely worded contract of sale. The object of purchase is described accurately, the sale price and when it is due stated, rescission rights and contractual penalties in the event of late payment and/or rescission of the contract of sale stipulated, as is contract implementation to arrive at transfer of title in the Land Register.
Land Register in Greece
Exactly as in the case of German law, according to the Greek Civil Code change of title is effected upon registration with the Land Registry having jurisdiction for the real estate. Payment of the sale price or the residual sale price takes place at the same time as the notary’s record is drawn up and is established in the notarised record.
Payment of land transfer tax is a prerequisite for transfer of title, which is usually carried out by lawyers.
Real Estate Transfer Tax
Real Estate Transfer Tax is imposed on any transfer of real estate against a price in money or in land This tax is levied on the price stated in the contract. However, if this price is below the objective value of the estate, the tax is calculated on the objective value of the estate. This tax is charged by law on the purchaser of the property, who has to pay, in full, the competent Tax Office which regulates the real estate prior to concluding the transfer deed.
As per the new tax provisions, the tax factor amounts to 3%.
Value Added Tax (V.A.T)
Law no. 3427/2005 modified the V.A.T. Code (law no. 2859/2000) and brought about the imposition of V.A.T. for new buildings. According to the new tax provisions, V.A.T. at 24% is levied where a newly-erected real estate is acquired against a price and in money, for which building permission was issued after 1.1.2006. V.A.T. is to be paid by the purchaser- contractor and prior to signing the contract for sale in which case, Real Estate Transfer Tax does not apply.
Real Estate Property in Greece: An Overview
Real estate property in Greece is divided into two main categories: real estates outside city building plans and real estates within city building plans.
Real estates outside city building plans are mainly divided into two further categories: agricultural land and land allotted by lot. Land allotted by lot refers to real estates granted by the Greek State as agricultural lots for the resettlement of farmers who did not own land. This system was introduced in order to cater for the incoming arrival of refugees into Greece from 1922 onwards, which, in turn, gave rise to the need to make use of such plots of land with the goal of developing the agricultural economy. Land allotted by lot is frequently larger in size and one of its most significant characteristics is the legal prohibition on dividing the land into smaller parts.
Agricultural land refers to real estates outside city building plans which are inherently used for agricultural exploitation and for the production of natural produce.
On the other hand, real estates within city building plans are commonly known as building sites. A building site consists of any ground which is within an approved street plan or within the boundaries of a settlement, even if the latter does not have an approved street plan.
In contrast to other legal systems, Greek law generally permits the construction of buildings in real estates outside city building plans. Depending on the type of building which is to be built, and its intended use, there are town planning provisions which allow for construction of buildings depending on the size of the real estate in question. For instance, in principle, it is allowed to erect buildings of up to 200 square metres on agricultural land of 4.000 square metres and above.
Naturally, far more flexible town planning provisions apply in the case of building sites due to the fact that their innate purpose is the erection of buildings.
There are two key concepts which must be taken into consideration when considering whether or not to acquire real estate property in Greece: ‘conformity’ and ‘fit for building’ (in Greek ‘artio’ and ‘ikodomisimo’). A real estate is conforming when, in accordance with its area and dimensions, it is possible to erect a building or buildings based on what is permissible according to legal specifications .A real estate which is fit for building is one tha thas the appropriate features required to achieve the best aesthetical, constructive and financial results. As a result, all the real estates which are fit for building in terms of size and dimension must also fit the conforming requirement.