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Purchasing Property in Kefalonia
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As
Greece is a member of the European Community, all E.U
citizens are permitted to own property on Kefalonia.
For non-E.U. citizens the situation is slightly different.
You will need to either form a Greek or E.U. registered
company to hold the title of the property, or apply
for permission.
As in most European countries, to assist you with the
purchase of your property you will need to engage the
services of a lawyer, who will check the title and ensure
there are no outstanding charges against the property,
and f you are purchasing building land you will need
a professional surveyor to confirm what may be built.
We can assist you with the appointment of lawyer, surveyor,
architect, and any other professionals whose services
may be required.
When you have negotiated a purchase price for the property,
the usual procedure is as follows:
A pre-contract is prepared and signed by both parties.
This commits both buyer and seller to a price and a
date (usually within 60 days) for completion of the
sale. During the period between signing the pre-contract
and completion, the purchaser’s lawyer will check that
clear title exists in the property, and that there are
no outstanding charges (for example mortgages, taxes,
etc.). In the case of a building plot, he will confirm
that building is permitted. Where additional consents
are required (for example, from the Forestry Commission)
these will also be obtained during this period.
At the time of signing the Pre-contract the buyer pays
an agreed deposit which is usually about 10% of the
purchase price. This deposit (less handling charges)
is refundable in the event that the purchaser’s lawyer
is unable satisfy himself with respect to the issues
mentioned above. However, should the buyer wish to cancel
the sale for any other reason, the deposit is forfeit.
As the purchaser, you will need to obtain a Greek tax
number (AFM - pronounced “AhFeeMee”), and we can assist
you with this. You will also appoint a lawyer and, if
necessary a surveyor. As mentioned, we can assist you
with these appointments. The lawyer will appoint a public
notary who will prepare the necessary Final Contract.
The day before signing the Final Contract, a tax declaration
is signed and the amount of tax shown becomes payable.
This is Transfer tax payable to the Government. The
amount of this tax is calculated on the value of the
property as assessed by the Tax Office, which is usually
lower than the actual purchase price. Either the buyer's
lawyer or the public notary effects this payment. It
is therefore necessary to have funds easily available
to make this payment at least a week before the date
that the final contract is signed.
Signature of the Final Contract takes place in the office
of the public notary. The presence of the buyer is necessary
unless he has appointed someone with power of attorney
to act on their behalf. Once the sale has been completed,
the notary registers it with the Land Registry, who
retains a copy of the Final Contract. The notary, who
will supply certified copies to the buyer, also retains
a copy.
Procedure at the Greek Consulate
It is also possible to arrange for Power of Attorney
through the Greek Consulate in the purchaser’s home
country. The existence of the Greek Consulate is of
great practical importance for foreign purchasers, as
the consulate can carry out legal actions which, in
Greece, fall within the scope of a notary’s competence.
That means that proxies concerning real estate transactions
may be granted, when abroad, before a Greek consular
official.
Registry of Mortgages
The notarised contract for the transfer of property
can be effective only if combined with a registration
of the transfer with the Registry of Mortgages or the
Land Registry. The registry is a vital part of the purchase
of property in Greece.
For budgeting purposes, you should bear in mind that
you will need to find the following addition sums over
and above the agreed purchase price of the property
(these are approximate figures to give you a guideline)
* Transfer tax. 7% of the first 15.000 € and 9% of the
remainder, based on the Tax Office valuation as mentioned
above.
* Public notary. 1.20% + 400€ of the tax assessed value
depending on the value of the transaction (including
subsequent registration fees).
* Buyer's lawyer. 0, 5% - 1% of sale price (depending
on the value of the transaction).
* Estate Agency Fee. 2% of sale price plus VAT at 19%
(of the 2% fee!)
