There are a number of legal issues that need to be considered when purchasing a property in Greece. To complete the transfer of a property, the seller is to provide to the notary, firstly the documents certifying his property rights, and secondly the documents proving the absence of any debts to various authorities, which are defined accordingly (depending on the type of the property, its location, etc.). In particular the seller is legally obliged to provide the following documentation:
1) Cadastre information, information regarding the property. In particular, the seller needs to provide:
- The Deed-The document proving the seller’s property rights. Normally the seller keeps an official copy of his deed. Exceptionally, the deed may be not a notarial act, but a court decision, an act before the secretary of the district court, an act of implementation of the city plan, an act of expropriation etc.
- Τhe Deed registration certificate-Τhe certificate granted by the competent land registry office to the property owner the after the registration of his deed. In case of loss, no worries, it can be reissued at the owner’s request.
- A copy of the cadastral sheet-It applies to properties situated in regions under cadastral survey. A cadastral sheet is issued for each property, where the Hellenic Cadastre Code Number (KAEK) of the property, the owners and the acts registered are listed and reflects the property’s legal status. It is issued at any interesting party’s request by the electronic archive of the Hellenic Cadastre at the local cadastral office of the location of the property.
- Cadastral Diagram Extract-It reflects in an uncontested way the borderlines and the surface of every property located in regions under cadastral survey, based on the specific coordinates of the National Geodetic Reference System (EGSA 87).
2) Registry information regarding the property (in the regions where a cadastre does not exist yet).
3) Certificate of payment of annual property tax (ΕΝΦΙΑ). Those who plan to proceed with a transaction that concerns their real estate must have an ENFIA certificate. It is a certificate granted to the property owner by the competent tax authority proving that his property has been included in the declaration of his real estate property for the last five years and that no property tax is due for this property for the same years. In order to issue the certificate and properly use it at the contract of sale, it is necessary that all information of the property is identical with the one declared in the relevant tax declarations, otherwise prior to property transfer a correction is required. If urban legalization procedure has taken place, the added legalized s.m. of the property should be also included in the corresponding property tax certificate for the years following the legalization. To issue the certificate you must follow these 8 steps:
- Enter the electronic application of the E9 property register at the electronic address www.aade.gr
- Select the year of the designated sale.
- Click on “issue a new certificate for use in the year of the designated sale.
- Select a use and enter the eleven-digit AT.AK. of the right in rem, for which you want to issue a certificate.
- For each Α.Τ.Α.Κ. a separate certificate is issued.
- From the available actions, click on “the right to issue a certificate”.
- You can print a certificate preview to check the certificate details before it is issued.
- Select “issue a certificate” and then print.
4) Certificate of non outstanding personal debts to the tax authority (φορολογική ενημερότητα). Certificate granted to the property owner by the competent tax authority proving he has no debts to any public authority or organisation. Basically issued through the website of the Ministry of Finance with the help of the owner’s accountant. In case of debts due, which block the provision of the certificate, the owner should contact the tax office and apply for a tax clearance certificate is issued on condition that the amount of the debt is withheld by the notary out of the sale price after the contract of sale (it’s understood that the amount withheld should be lower than the sale price).
5) Certificate of non outstanding debts to the pension and health insurance authority for those that are businessmen or own a company or enterprise or are self employed (ασφαλιστική ενημερότητα). Ιt is required if the seller is a natural person, a legal entity of any kind, or a member of a company, a manager in a Ltd., or an executive director in a SA, liable to pay insurance contributions to public insurance organisation (EFKA), or if a building permit has been issued in the seller’s name (not necessarily referring to the selling property) within the last decade before the sale contract.
6) Certificate of an engineer that the property (where there is a building) does not have any abusive constructions or that the existing abusive constructions have been legalized. It’s the certificate issued pursuant the L.4495/2017 and confirms that the property is not built illegaly or that the existing building and its uses are in accordance with the building permit. In case illegal constructions or uses have been installed the certificate confirms that all illegal constructions or uses have been settled according to the legalization law and all fines have been paid. In case of legalised constructions or uses a certificate of completion of the legalization process is also required and the engineer’s drawings as well in which the illegalities are reflected.
7) Energy sufficiency certificate (where there is a building). A document recognized by the Ministry of Environment which is issued by the energy auditor and reflects the energy efficiency of the building, classified in energy class (A+ to H), while the auditor lists his suggestions for improving the energy efficiency of the building. It is required for all buildings over a total surface of 50 s.m.
8) Building license and/or topography or floor plan accordingly as they appear at the competent urban authority. The specific documents needed are: Α) Topographical plan-Recent topographical plan including the engineer’s declarations according to the laws 651/1977 and 1337/1983, based on the state coordinates system E.G.S.A.’87, Β) Building allowance certificate-In case of a non-built land, it is possible to apply to the competent building authority of the location of the property in order to get a safe certification with the building terms applied, and the plot classification as building land, C) Building permit-A certified copy from the archive kept at the competent urban authority office of the issued building permit referring to the selling property, D) Building permit drawings-Certified copies of the topographical plan, the site plan, the sections, and the floor plans submitted along with the building permit file, which are kept in the archive of the competent planning authority office.
9) TAP Certificate. This is a certificate provided by the municipality where the property is situated. It verifies that no municipal taxes -paid through the electricity bill- are due. Generally the municipality asks for a copy of the property deed, the E9 tax document and the last electricity bill and makes sure that the s.m. of the property as shown in the deed match the ones declared in the electricity bill.
10) City plan registration certificate. Ιf the property is located in an area included in a city plan in accordance to the L.1337/1983 and the implementing act was ratified after the 24-11-1994 or hasn’t been ratified yet, the property owner after acquiring the property, must submit a declaration to the technical department of the municipality, along with all the justification documents proving his ownership on the specific property. Consequently, in case he wishes to sell this property, he has to apply for a certificate at the aforementioned department proving the submission of this declaration.
11) City plan fees statement. Ιf the selling property has been included in the city plan according to the law 1337/1983 and the implementation act has been ratified, regardless of the implementation time, the property owner has to provide a certificate that his property has no debts to the municipality deriving of its inclusion to the city plan.
12) Transfer Tax return. Before signing the final contract, the transfer tax return is submitted to the Tax Office. This statement is prepared by the Notary and is accompanied by the calculation sheets of the objective value of the property, signed by the buyer and seller. It is submitted by the buyer or by an authorized person to the Capital Department of the Tax Office that owns the property. The transfer tax is paid by the buyer in a lump sum, and is calculated on the objective value of the property, as officially defined by the annual tables of the tax office for each area.
13) Inheritance/Donation/Parental donation tax certificate. Certificate granted to the property owner by the tax authority of the testator, the donor or the parent that there is no inheritance, donation or parental donation tax due. It is required when the deed of the seller is an inheritance, a donation or a parental donation accordingly.
14) Agricultural water statement. If the property is located within an irrigation network a certificate is required confirming no irrigation fees are due. It applies only to properties situated outside settlement limits (agricultural plot) built or not.
15) Certificate that the plot is not on a forestall zone (for the out of urban plan properties)
When a public notary is appointed it is his duty by law to check most of items listed above; before then real estate agents can also take care of the same aspects while they carry out negotiations; in every other case it is advised not to enter a transaction without the assistance of a legal counsel (note there is no distinction in Greece between solicitors and barristers).
In addition, the buyer should be careful to confirm the following:
- Name of the current owner of the property
- If there is any mortgage or other charge over the property
- The physical property conforms to the description
- That the land is correctly zoned for building
- The buyer should also make sure there are no sitting tenants in the property
Before buying a new property it is advisable to confirm the following:
The existence of a project license in which the relevant technical department confirms that the building project has been carried-out in accordance with the original approval originally issued by the town hall.
Inscription in the property registry of the urbanization along with the necessary certificate that any abusive construction (construction outside the building license) has been legalized (νομιμοποίηση αυθαιρέτης κατασκευής)
For plots: make sure whether there are included in the urban plan. If not whether they are included in forestall zones, and what is the percentage of built- up coverage, what are the permitted usages according to the urban authority.
Property Transfer in Greece
The process in general
Real estate property transfer demands that specific procedures are performed with the assistance of various professionals (lawyer,notary, accountant, engineer, etc.) so that all documents required are collected and a thorough legal and technical survey of the property to be transferred is carried out before its safe transfer to the buyer.
The legal and technical property research is a priority in order to identify possible legal and technical issues and resolve them before the property transfer. Hence, the lawyer’s and engineer’s assistance is considered essential. A legal research refers to the deed search of the property, the burdens, claims and liabilities of any kind and to the resolution of any legal issue, while an engineer’s research refers to checking the topographic plan of the property, the conformity of the buildings to the issued building license and their compliance with the town planning regulations.
Following the surveys, the seller undertakes the obligation to provide the necessary documents, as mentioned above, for the transfer to the notary preparing the act of sale. The payment of the transfer tax by the buyer comes next. The procedure is completed when the signature of the act of sale by the contracting parties takes place. The transfer of the ownership of the property to its new owner is concluded by the registration of the purchase contract at the relevant land registry/cadastral office. The stages of the transfer are briefly listed below.
C.2 The Stages
- Primary survey of the supporting documents. It’s the stage dealing with the legal and technical survey at which the seller has to assist the buyer by providing all documents required for the quicker completion of the searches needed before the competent authorities (land registry, urban planning department etc.). In case legal or technical issues arise during this stage which have to be dealt with before the property transfer and the seller needs to cover relevant costs or expenses, it’s possible that he may raise the issue of a deposit to be paid upfront when a preliminary agreement is signed.
- Preliminary agreement (optional). Assuming that most of the preliminary checks determine that the property is as stated and can be purchased safely, the purchaser may need some time to put together the funds necessary to complete the purchase and/or the vendor might need some time before he can sell the property for various reasons. The Greek property purchasing process provides for this by use of a ‘preliminary contract’ – “Προσύφωνο.” Effectively this is a contract-to-contract and normally stipulates that before a stated future date, the property will have passed from the seller to the buyer.
The preliminary agreement consists in a notary’s act binding both parties to proceed to the sale, in other words the seller to transfer the ownership of the property to the buyer, and the buyer to pay the agreed price. It includes all terms which are agreed as conditional for the sale to be concluded and the final act of sale to be signed. It links the act of sale either to a specific period of time after which the act should be signed, or to the fulfilment of specific obligations or conditions by the contracting parties. Should either side fail to complete there are penalties. Among the rights provided to the parties, basically the buyer reserves either the right to claim a refund of the deposit in duplicate in case the seller fails to fulfil his commitments or, if the seller decides not to proceed with the property conveyance, the right to oblige him to do so via court. On the other hand, the seller gets to keep the forfeited deposit if the buyer decides not to proceed with the final contract and withdraws from the sale. The cost of the preliminary agreement (generally) burdens the buyer, as it’s a part of the total notary’s fee for the act of sale. Other terms can be included in the agreement which is signed before a notary.
This contract – to contract shall not be confused with the “deposit agreement” which serves a different purpose and is not signed before a notary, but it is in practice a private agreement between the parties (and sometimes the real estate agents). Nonetheless, it is advisable not to hand in any deposit, before you speak with a legal advisor to avoid any future issues.
- Seller’s- Buyer’s obligations. The seller is asked to provide the notary the documents indicated needed for the act of sale, as described above. Furthermore, the vendor of the property has the following legal obligations:
- To conserve the property until it is handed over to the purchaser
- Transfer the property
- Make good any defects or deficiencies in the property.
- To pay certain costs and taxes
The buyer will just have to obtain a Greek tax number and provide all his identity information to the notary and pay the transfer tax. Before being able to do, well almost anything in Greece (and certainly to purchase a property) you will need to apply for a fiscal code (ΑΦΜ), similar to the Social Security Number (SSN) in the USA or the National Insurance Number in the UK. In Greece, this is arranged at the ΕΦΟΡΙΑ (Tax Authority).
Τhe process is very easy. The interested party appears before the department of the tax authority and by showing their passport or ID (if they are EU citizens) they can request and obtain right away the ΑΦΜ number. If they are not residing in Greece they will have to declare a tax representative and his address in Greece. Normally an accountant can be assigned as tax representative.
- Representation. In case the buyer can’t be present when the contract or the preliminary agreement are signed, he needs to provide special authorisation to a specific proxy by signing a power of attorney. In practice, this means that it is possible for someone to buy real estate in Greece, without ever visiting the country, since all actions can be performed by a lawyer by virtue of a power of attorney. However, if the final contract is signed by the buyer himself and he is a third country national (outside the EU), it is necessary to be provided with a valid visa of any type or to have a strong residence permit issued by the competent Greek authorities or the competent authorities of another European country.
- 5. Related costs. Whether you are buying or selling a property in Greece there are a number of costs associated with the process. A number of these you will expect if you have been through the process in another country, but some you will ln this article the main charges will be covered and the party that is usually responsible is the buyer (unless otherwise indicated). However, it should be borne in mind always that the concept of freedom to contract is a cornerstone of Greek law and the parties, save some exceptions, may assume or forfait whatever responsibilities they wish with regard to payment of the costs and taxes incurred when transferring property in Greece.
Unless there is agreement to the contrary, the purchaser is obliged to pay the costs relating to the drawing up of the deeds of transfer as well as those costs necessary to effect the transfer of the property – this would include notary costs and land registry/cadastre registration costs. Any income tax related to the price earnt from the purchase of the property will be payable by the vendor.
- Contract signing. The final deed or ‘συμβόλαιο αγοραπωλησίας» as it is known in Greek is the title by which the property passes and the buyer’s new title is registered in the local property register (land registry or cadastre). The signing takes place in the office of the public notary who is a type of official registrar who must witness the contract signing in order for it to be legally binding.
As soon as the notary confirms that all documents required for the property transfer have been delivered and confirms they are valid and correct, he prepares the property transfer declaration to be submitted by the buyer to the tax office prior to the contract signing. This declaration, including seller’s and buyer’s details, the description of the property and the declared price of the sale, is submitted by the buyer to the tax office where the property is located and the relevant transfer tax is paid by the buyer (3% on the sale price+ 3% on the result) within 3 days after the tax invoice is issued by the tax office (after that the amount due is burdened with the legal increments). During the contract signing before the notary, the contracting parties are present either on their own either represented by their proxies legally designated, possibly their lawyers (if one or both parties do not wish to be present), an interpreter in case the contracting parties are not fluent Greek language speakers (also your lawyer can serve as a translator, if he speaks the language of the party) and an estate agent if there is one intervening in the transaction.
The deed is read aloud by the notary and the parties then present their identification after which the deeds are signed by the vendor, the purchaser or their representatives, the notary and the translator (where requested). At this point the monies for the purchase are handed over, usually in the form of a bank-guaranteed cheque. A bank transfer can also be agreed in case the buyer does not hold a Greek bank account in which case he cannot provide the vendor with a bank cheque.
- Property transfer completion. After the contract signing the buyer will undertake the responsibility to register a certified copy of the contract to the local land registry/cadastral office and get the registration certificate, becoming right after that officially the legal owner of the property.
- Withdrawal from the purchase contract. The reasons for which a contract may be rescinded are normally included in the contract itself in order to protect the parties to the contract. The following would however be the main reasons for rescinding a contract for the purchase of property:
- Failure to fulfil obligations under the contract.
- Loss of the property.
- Failure to pay (especially in case the price is agreed to paid in instalments)
- Hidden charges (over the property) or defects
- Golden Visa. It is noted that in case the buyer is a third country national (outside the EU) and the purchase price amounts to more than 250,000 Euros, he has the opportunity to apply and receive a residence permit after signing the contract and transferring it. 5 years (Golden Visa), both for him and his family members (spouse or partner with a cohabitation agreement, children under 21 and parents).