Special topics

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Taxation on the transfer of property-exemptions

As from 01.01.2006 (only for the buildings for which the building permit was issued after that date), a VAT of 23% is imposed on the first sale of newly built buildings by a manufacturer, or by a person who deals professionally with the construction and the sale of buildings. For all other properties that don’t have the obligation to pay VAT, as above-mentioned, the transfer is charged with real estate transfer tax at a progressive scale (i.e. 8% for a value of property up to 20.000,00 € and 10% on the excess). Exceptionally, the acquisition of a primary residence is...

01 Feb 2012

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Annual taxes on property

All properties in Greece, belonging to individuals or legal entities on the 1st of January of every year, are burdened with the Tax of Real Estate, following the provisions of Law 3842/2010. The above-mentioned term property includes: a) the right to full and bare ownership, the usufruct and the habitation on a property and b) the right to the exclusive use of parking spaces, auxiliary spaces and swimming pools, that lie at the jointly-owned part of basement, terrace or non-covered buiding space of these properties. The taxable value of buildings (main and auxiliary spaces) is determined by several factors, such as the...

01 Feb 2012

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Real estate investment companies

Real Estate Investment companies are limited by shares companies (i.e. S.A companies), established with the sole aim to acquire and manage real estate property. Their minimum share capital is twenty nine million three hundred and fifty thousand euros (€29.350.000) at a minimum, fully payable upon establishment of the company. Prior to the issuance of permission for establishing a Real Estate Investment Company, permission by the Stock Market Commission is required. A similar permission is required in case an existing company is converted into a Real Estate Investment Company. For granting the establishment permission, the Stock Market Committee evaluates the investment...

01 Feb 2012

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Evaluation of real property

The value of land in Greece is assessed according to a so called “system of objective value” (or tax value).This system provides for a minimum value of real property according to objective criteria such as position, size, public facilities in the area, age of a building etc. This system has been imposed so that the tax authorities have a reference minimum value in imposing taxes in relation to land. In cases of transfer of land, the transfer tax is calculated on either that “objective value” or the value agreed in the contract, whichever is the highest. The objective values are...

01 Feb 2012

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Bank finance for the acquisition of real property

Often, in real estate transfers in Greece, the price is paid to the seller by loan, that is granted by the bank to the buyer. In this case and for the discharge of the loan to the bank, a pre-notice of a mortgage is granted, in favor of the bank. In terms of process, the registration of a pre-notice of a mortgage in favor of the bank, at the expense of the buyer of the property, follows the signing of the contract of transfer and the contract of the loan agreement between the bank and the buyer and it takes...

01 Feb 2012

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Illegal constructions – amnesty laws

In Greece, construction of buildings in excess of structural requirements and constraints provided by law, is quite widespread and common. For instance, it is very common that a flat is built in excess of the building permission and, for example, it has an actual surface of 200 sq.m. although the building permission is for 150 sq.m. Also, it is very common that houses or other buildings are constructed with no permission at all. This ubnormality is so common, that on the one hand the State looses income related to property ownership and use and on the other hand, if the...

01 Feb 2012

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Procedure of property transfer

The procedure of a property acquisition usually has the following steps: 1.Finding of the property, with the possible contribution of an estate agent. The estate agent's fee is not specified by law, but is subject to an agreement. Usually a fee of a percentage of 2% of actual price paid for the property is agreed in writing, but this may vary, depending on property value and other factors. 2.Legal due diligence (title search) of the property. After finding the property of his choice and before signing any contract, the buyer should assign to a lawyer the complete legal due diligence of the property. It...

01 Feb 2012

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Recordation of ownership rights

The recordation, i.e. the inclusion in public records, kept by public officials, of acts of any change of the real property ownership rights, ensures the compliance with the publicity of the property relations, as well as the protection of transactions. According to article 1192 of Civil Code, the acts that must be recorded are the following: 1) the inter vivos transactions, including donations causa mortis, by which a real right on a property is established, transferred or abolished, 2) the adjudications or the annexations by the authorities or the award of ownership or other real rights on the property, 3) the...

01 Feb 2012

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City-planning & environmental limitations