The Currency Club

Buying Property in Greece: How Safe is It?

In this blog

How safe is it to buy a property in Greece?
Pitfalls of buying property in Greece
Fees and taxes you need to pay

Greece is one of the most popular regions in Europe, enticing tourists with its art, culture, architecture, history and lifestyle.

Its impressive landscapes not only call people from around the world but force them to settle there as well. In recent years, more than a thousand foreigners have bought homes in this paradise nation.

There are quite a few advantages of buying a property in Greece. However, some risks are also involved with the overall procedure and the local legal system.

If you plan on buying a property in Greece, make sure you know these pitfalls.

Go through this guide for more details.

How safe is it to buy a property in Greece?

There is no denying that the Greek economy is not at its best. The country struggled to regain footing after a significant economic crash in 2009.

These factors have impacted the housing market and the global Covid-19 pandemic only worsened it.

However, Greece appears to be beginning to experience a development boom right now. From January through August 2021, international investors contributed €797 million to the economy.

Greece was one of the three European nations that contributed around 34% of the overall increase in estate prices in the Eurozone, together with France and the Netherlands.

This means the prices will only increase from now unless something as impactful as Covid-19 strikes again. It is a great time to purchase a property before the prices rise to an unreasonable amount.

But risks will always remain in other forms.

Pitfalls of buying property in Greece

It will always be risky and difficult to purchase a home in another nation, especially if you do not plan to permanently shift there. Let us examine some of the pitfalls of buying property in Greece:

In your hunt for Greek property, you can encounter estate con artists, as is the case everywhere. While the specific scams vary, there are a few things you need to avoid falling victim to so:

Never submit cash or a deposit before speaking with the seller, touring the home, and getting a set of functional keys.

Take the inspection document with you while you conduct a comprehensive walkthrough with your estate agent.

Make sure that the seller is the actual property owner and has the legal authority to sell the property.

Double-check your ownership rights; if the Greek government has declared the property as Alpha (a historic dwelling), you could not have much control over any renovations or modifications.

Now, let us understand what taxes you have to pay.

Fees and taxes you need to pay

Recognising the upfront payments you must make will help you set your overall budget.

While conducting your research is crucial, the following fees are some typical ones to watch out for:

Transfer Tax

In Greece, a transfer tax called FMA is paid when you buy a home. The tax levied is 3.09% of a property's assessed value, and a system of "Objective Value" exists there.

In this, the size, location, and technical specifications of an estate determine how much would be its property value.

In situations where the Objective Value exceeds the purchase price, you pay tax on the value rather than the price.

The VAT (value-added tax) rates have undergone some revisions from the government. Previously, new properties were subject to a 24% VAT rate.

All properties with a planning permission date after January 2006 are considered new.

However, the government has amended it. It chose to exempt new homes from paying VAT for three years beginning in 2019.

Rental Tax

You will have to pay taxes on your rental income when renting your property. Depending on the rent gains, you will have progressive tax rates. The prices are listed below:

1) 15% up to a rental sum of €12,000

2) 35% between €12,000 and €35,000

3) 45% for more than €35,000

Additional options include a "solidarity contribution" of up to 10%. Your entire income, which you must declare, will decide how much you pay.

Given that the Greek government is quite cautious in this regard, you must categorically declare your income.

They maintain tabs on landlords with rented homes. As a result, homeowners could face penalties if they fail to disclose their rental revenue.

Capital Gains Tax

If you own a property for less than five years and decide to sell it, your profits will be subject to a 15% tax.

However, the profits you gain from a property will not be subject to taxes if you have owned it for more than five years.

Notary Fee

The notary fee stands at 0.65% to 1%, along with an additional VAT.

Agent Fees

You must pay between 2% and 2.5% of the property price and a VAT fee to the estate agent.

However, if you are still in the UK and buying property from there, you will need to make an international transfer. For such transfers, you can opt for credible online currency exchange platforms like The Currency Club.

Transparency lies in our core; hence, we offer our clients access to live interbank exchange rates. Not only that, we are known for our competitive exchange rates. With us, you can save considerably on international payments.

Buying a home in Greece is a rather simple process, even for a foreigner.

Depending on the buyer's efforts, buying property in Greece is not significantly different from purchasing elsewhere.

There should be nothing to worry about if the property is carefully selected with the help of professional agents and the necessary documentation is completed by an experienced lawyer. However, you need to be aware of the potential risks associated with buying a Greek property to navigate the challenges efficiently and find a property of your choice.