An Investors Guide To Buying Real Estate in Greece

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An Investors Guide To Buying Real Estate in Greece

Greece has traditionally been a popular holiday destination but with relatively low interest in property investments. This situation is changing with recent interest from its European neighbors.The recent focus on Greece after the 2004 Olympics evoked worldwide interest thus pushing up tourism and demand for housing. With its serene coast line, affordable cost of living, an enviable history and culture, Greece is an enticing place to invest. The renewed interest in tourism has also brought with it a rising need for rental. The best part is that compared to its popular European neighbors like Spain, Portugal and France it is a better investment destination.

An overview of the property market

With an undervalued property market there could not be a better time to invest into Greece and it gets better depending on the choice of location which can give returns up to 20-25%. Wide arrays of properties are available but the ones on the main islands like Crete, Corfu and Rhodes are dearer. Choices are available between beautiful Greek traditional houses and modern suites though the location and condition of houses determine the price. Two bedroom apartments are priced from EUR89,000 to EUR355,000 and a three bed room house will cost between EUR148,000 and EUR503,000. Cheaper investments are possible if renovations can be undertaken.

Sellers Market

It is possible to drive a bargain and pick up older properties for cheaper rates but be prepared to spend a lot on repairs which can sometimes turn a nightmare. Depleted buildings with damages to sanitary lines and reconnecting electric supply could turn out more expensive than investing int a new apartment. When it comes to selling a property in Greece location is high on priority. Though it is difficult to get a property in the islands, it is easier to sell off.

Popular Locations in Greece

Mainland Greece is preferred by east Europeans and Scandinavians but the English favor investing in the islands. Crete with its rich history and tranquil landscape is most sought after location by holidaymakers but its calmness and scenic beauty is the reason why retired Europeans prefer it. The majority of property is owned by British investors and with rising rental potential, property rates have shot up by 6-10%. The mild and beautiful Peloponnese peninsula is ideal for investors a milder investment. A strong history and with a projected positive appreciation rate, prices have shot up by more than 20%. It is also attracting international interest.Greece has strong laws to protect and regulate their coastline which has resulted in kept them unexploited in spite of all the development.Air connectivity to the islands is good and getting better with flights from UK to all major islands like Crete, Rhodes and Corfu. There are direct flights from Manchester to Heraklion and also from Gatwick to Rhodes. GB airlines flights five flights from Gatwick to Heraklion.

The larger islands have well developed rental markets.The island of Peloponnese is cut off from the mainland by the canal of Corinth. This isolation is offset by other transportation channels like a motorway, railway link and the Kalamata airport. The island is dotted with sandy beaches and rugged mountains and offers warm winters and pleasant summers. Peloponnese is home to the famous Olympia, Epidaurus and Mycenae. The English are the largest group of investors as connectivity from Gatwick, Birmingham and Manchester to Kalmata is strong with the travel time less than 4 hrs. Older properties which can be purchased from Euro 45000, the range includes stone cottages, traditionally architected houses and villas.

Property Purchase

A lawyer with understanding and experience with Greek property procedures is recommended. Good English is an added benefit.

The purchase process

The process starts with agreeing on a price agreement and sealing it with a 10% advance followed by a pre-contract agreement signed by both parties. After all information gathering is completed the final deed of sale is signed in the front of a public notary. After paying the balance amount the owner can be transferred by registration.

Fees and Costs

Compared to other nations the tax for purchasing and registering in Greece is on the higher side. 13-15 percent of the cost of property would be paid as taxes which include transfer tax for resales, municipal tax to the local authorities, legal fees to lawyers and notaries and property registration. New buildings are charged 19 percent as Value Added Tax.


There are usually three options when it comes to financing a property. Cash, new Mortgages and re mortgaging an existing property are options for financing. Although cash is the easiest option, it is not always affordable. Mortgages for the property can be arranged by a Greek or UK lender. Giving up equity in a UK/Irish property can help purchase the Greek property in cash and thus make it an easy option. Greece has the highest interest rates as compared to its European neighbors. Lending is conservative and applicants have to furnish proof of income and rental projections are usually not considered.

Taxes in Greece

It is recommended that buyers get some taxation advice as Greek regulations are complex. Non residents may also fall into the bracket of income, wealth, inheritance and gift taxes. Since the UK/Ireland has a double taxation treaty with Greece you can be assured to escape paying tax in both countries. Acquiring a fiscal number, called the AFM is necessary to involve in any financial exchanges like property transactions, buying a vehicle or working in Greece. Holders of AFM have to file yearly tax returns irrespective of income.

Property Taxation Guidelines

To reduce speculation the Greek agencies have implemented Capital Gains tax which applies to property bought after 1st January 2006. The motive being to impose penalty on those looking for quick profit by levying it in inverse to the length of time the property is owned. The other tax for property holders is the wealth tax which is between 0.3 and 0.8 percent of the property value. Wealth tax is only levied on properties with valuation more than Euro 243,600.Apart from wealth and capital gains the others are local taxes. They take the form of direct and indirect taxes charged between .25 to .35 percent of the propertys official valuation.

Greek Economy

Greece trades chiefly with EU nations like Germany, Italy, France and also the USA in tourism, shipping, food, tobacco, textiles, mining and petroleum products. The sector growing rapidly is the service sector. Greek GDP annual growth was touching 4 percent during 2003-2005 periods which is above the European Union average and it has been performing uniformly. The introduction of reforms and funding from European Union are the top reasons for this consistent growth. The government has been working towards strengthening the labor and pension mechanism to arrest the growing unemployment, inflation and national debt.

Communications within Greece

Fixed and Mobile Telephone

The telephone market was controlled solely by the state through the Organismos Tilepikoinonion Ellados (OTE) until the markets opened up in 2002. Over the years OTE has lost market share but still controls a major chunk of the market. Though other players are coming in OTE still has a major in basic infrastructure like phone lines. Mobile phone use is substantial and pay-as-you-use cards are available at common stores but a contract phone card is only available by producing a Fiscal Number. Payphones are available in plenty.

Internet Usage

With the introduction of ADSL and Broadband, which are faster internet connections, internet use is quite popular. Larger towns and urban areas have access to high speed whereas dial-up and ISDN are readily available.


Letters, which are posted in mainland Greece, may take three days to a week to reach other European countries. The islands take longer or lesser based on their connectivity.

Investing into a property in a different country is a big decision and would require adequate research and many visits. Planning a budget and working by is advisable. It is smart to keep exit options available by studying the sellers market as property prices and situations dont remain constant. Professional opinion from a local lawyer or property consultant would be the best way to approach it. Factors like property valuation, rentals and growth potential are areas of expertise and it is best to hire the services of a proven consultant . A good understanding of the regulations for each country is also crucial before signing any purchase agreement. Be extra careful if it is a partnership or long term deal.

Leo Fogarty is Managing Director of overseas property portals and . He is also a regular author on greece property, most notably for Property Gallery Magazine in Ireland and is the founder of real estate article directory,

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