Acquiring Property

The Procedure for Acquiring Property in Crete.
Legal and other Issues.

Greece is in the process of establishing a National Land Registry whereby official property titles shall be issued by the state and all transfers of land will be carried out through this National Land Registry. Some areas already have a Land Registry (such as Rhodes and the Cyclades islands) while most others, including Crete, are based on a different system, that of the Registry of Mortgages, on a Municipal basis, whereby contract deeds of sale are registered.

Our company will assist and guide you through the whole process of buying and acquiring a sound title to your property in Crete. Once you have decided to buy from us, you will also have to chose an independent and reputable lawyer to act on your behalf. All of our properties, anyway, have secure and clean titles.

The Municipal Registry of Mortgages is a State Authority where titles to property are kept and where all encumbrances on properties are registered. Property is filed under the names of the owners as opposed to the Land Registry system whereby property is filed under the National Grid irrespective of who the owner is. Lawyers are entitled to check property belonging to any individual or company to establish whether it has been properly transferred, whether it is encumbered, whether there are any claims etc. This is always carried out in the conveyance process with the aim of securing and protecting the future purchaser’s rights.

The difference between the two cases lies in the basis of the security of the titles: once an owner holds an uncontested title from a Land Registry it means that his/her title is secured by the State, while in the Registry of Mortgages the title is secured through the contract held by the owner, and hence, the owner must secure his interests through his lawyer. Therefore, in the first case there is an independent Authority which regulates the various ownerships while in the second the process is left to individuals on a contractual basis. Diligent legal work will mean that ownership is as secure with the Registry of Mortgages system as with the Land Registry system.

For property to be officially bought/sold a contract must be signed before a Public Notary. The Notary is a state official who will draw up the deed and in front of whom the contract deed is read and signed by both vendor and purchaser. He/she is there to draft the contract deed, and to verify and register in the public records the sale/purchase which is signed in his/her presence and understood by the parties concerned.

The Notary is not there to advise or to protect either the vendor’s or the purchaser’s interests. He/she is there to record the transaction based on a contract prepared by him/herself. When this record is made then the contract becomes a valid title to the property purchased. The process is completed by registering the contract at the Registry of Mortgages which results in the transfer being effected. The parties concerned meet at the Public Notary’s office where the contract is read out and they place their signatures on the contract and the Public Notary’s Registry Book. Payments by the Purchaser to the Vendor are made on the basis of their contract at the Public Notary’s office. The Public Notary issues official receipts upon request.

Following the signing of the contract the purchaser’s lawyer takes it to the Registry of Mortgages and effects the transfer of the property in the purchaser’s name by issuing the appropriate certificates.

It is customary, when buying built property, which is at its early stages of construction, to sign a Private Agreement laying out the terms of the sale and for the official contract to be signed later on. This Private Agreement is binding only as a common contract and does not provide any party with specific performance rights. Hence, in the event that the contract is breached by either party, the injured party is only entitled to damages. A reputable developer will always treat such Private Agreements as if they were the proper contract deeds.

Payments of Transfer Tax must take place prior to the signing of the contract deed. Should the signing of the contract deed be cancelled for whatever reason while Transfer Tax has already been paid, the Tax is refunded after making the appropriate application to the Tax Authorities.

In some cases purchasers opt to declare as the contract amount, the Government-issued values, for tax purposes, the so called “Objective Values”. These are calculated on the basis of Governmental Data by the Public Notary and the Inland Revenue Service. The “Objective Value” of each property is calculated according to a specified formula and a price per sq.m for the location and particular characteristics of a property. The advice of your lawyer is highly recommended on this issue. Regular adjustments being made each year will soon lead to the «Objective Value» of property in Greece reaching the level of the actual market values.

PROCEDURE FOR ACQUIRING PROPERTY IN GREECE

ITEMS – DETAILS

APPOINT LAWYER
The purchaser must approach a lawyer of good repute and ask him/her to search the titles at the Registry of Mortgages and represent him/her to the Public Notary where the contract deed will be signed. The purchaser's lawyer must carry out his/her search at the Registry of Mortgages and ensure that the vendor holds an absolute title (deed) to the property, that the property is unencumbered, that all acts associated with the construction of the property are based on a lawful planning permission and that all property taxes burdening the vendor have been paid.

GET COPY OF TITLE
The purchaser must secure copies of the title (contract deed) held by the vendor. This is usually carried out through his/her lawyer.

APPOINT PUBLIC NOTARY
The purchaser must appoint a Public Notary in the presence of whom the contract deed is to be signed, thereby becoming an official transaction whereby the purchaser acquires the title to the property purchased.

FUNDING
It is possible to either raise finance for buying property in Greece as some Greek banks can offer different modules of finance or get your money to Greece by a simple transfer from your account to an account in Greece. Our company can help with this through our Bank or other banks of your choice.

APPLY FOR TAX REGISTRY No.
The purchaser must apply for and secure a Tax Registry Number (AFM or ΑΦΜ) from the Inland Revenue Service.

TRANSFER TAX
The purchaser must make sure that the transfer tax is paid prior to signing the contract with the aid of his/her lawyer. The Notary will calculate the tax due.The tax is paid by the purchaser.

PAY ASSOCIATED COSTS

The purchaser presently has to pay the following costs as required by Greek Law:

Lawyer 1% of contract amount up to Euro 45.000,00 approx. plus 0.5% for amounts exceeding Euro 45.000,00.
Public Notary 1.5% of contract amount.*
Transfer Fees 11% of contract amount.
Registration Fee 0.5% of contract amount.

(*Note : Legal costs for checking the title are not included. approx.500Euro. Contract amount is the objective not the actual value)

VAT
Note that all newly built properties in Greece, for which the application for the building permit, was lodged after November 26th 2005, will have a 19% V.A.T charge added in order to follow the EU directive. The harmonisation of the Greek property law with the rest of Europe, removes all previous property taxes including the deeds transfer charges mentioned above and stamp duties. VAT is rapidly becoming applicable to many properties coming on to the market and is added or included in the price of the property paid to the developer who is liable for its payment to the authorities.

SIGN CONTRACT AT PUBLIC NOTARY'S OFFICE
For property to be officially bought/sold a contract must be signed before a Public Notary. The Notary is a state official in the presence of whom the contract deed is read and signed by both vendor and purchaser. He/she is there to draft the contract deed, make sure that it is understood by both vendor and purchaser and verify and register in the public records the transaction which takes place in his/her presence.

EFFECT TRANSFER AT REGISTRY OF MORTGAGES
The contract deed must be transferred in the purchaser's name at the Registry of Mortgages and the relevant official certificates secured. This is usually carried out by the purchaser's lawyer.

SUBMIT PROOF OF TRANSFER AT LAND REGISTRY
If the property has already been registered under the National Land Registry the purchaser must submit a copy of the contract deed together with the transfer certificate from the Registry of Mortgages so that the said property be properly registered in his/her name.

We shall guide you safely through every step.