Greek Property Purchase - Frequently Asked Questions (FAQ's)

• Do I need to obtain an EPC (Energy Performance Certificate) when selling my house in Crete?
  This is a very good question, the answer to which we are monitoring closely. EPC is a European wide piece of legislation (N.3661/2008) requiring all member states to have mechanisms in place to be able to assess the energy performance of new constructions and any building undergoing large scale renovation. In Greece this legislation is being enforced by KENAK (Ministerial Decision D6/B/5825 “Regulation on the Energy Assessment of Buildings” published in April 2010 for EPBD transposition in accordance to the national law N.3661/2008) and enacted by Hellenic EPBD. As far as we can ascertain it is not compulsory at this time for older type properties requiring no or small scale renovations to have certificates, but this looks like it may change in the near future.
  
  
• Why bearing the current economic climate in Greece and also most of Europe, why are some Greek properties are more expensive now than a few years ago?
  In several cases, very old low priced property, even property that has been on the books for some time, has gone up in price. On the other hand, many houses in the middle price bracket, 100k to 200k euro have come down in price or are open to offers. These are in fact the may present the best value as most of these belong to expat refurbished holiday or retirement homes and often include all furniture fixtures and fitting. These are often referred to at 'turn-key purchases' where there is little or no work to do to realize your new life in the sun. For example cc5260 is a charming property that was originally priced at 110,000, reduced to 97,000, and now selling at 95,000 including all new fixtures, fittings, furniture and even cutlery and crockery!
  
  Increase in Greek inheritance tax and in particular death duty are the reason why many of the low priced ruins (properties) are going up in price. When the owner of a property dies without a will, very common among the Greeks, his property is divided, half going to the wife and the other half divided between the children. These are often village or country properties that have been abandoned by the family for decades and in many cases for over 50 years. When the family sell this property, perhaps when the mother has died and her half of the property is also divided between the children, then they have to agree on a total sale price and also pay any owing death duties for both the father and mother. Taxes in Greece have gone up, and also there is a late payment penalty, so each of the children (often in their 60's by this time), therefore want a little more for their share of the selling price.
  
  To summarize: A couple of properties that where priced around 40k, for example, the owners are now asking for 50k and this has been changed on the website. Although we strive to get a commitment on the price at the time of going on the website, there is a slight chance of owners haggling for a little more money. We do however support the client to the utmost of our capabilities and do everything we can to persuade the seller to adhere to the original price.
  
  
• Is there a good independent web site that I can use to research the legal aspects of living in Crete (Greece)?
  There are a few good internet sites available, the best is probably europa which is the portal site of the European Union. It provides up-to-date coverage of European Union affairs and essential information on European integration. Users can also consult all legislation currently in force or under discussion, access the websites of each of the EU institutions and find out about the policies administered by the European Union under the powers devolved to it by the Treaties. 'Europa' links to another web site called citizens which gives extensive information on various social and legal aspects within the European Union.
  
  
• Are non Greek nationals able to purchase property in Greece?
  It is not a problem for 'foreigners' to purchase property in Greece as long as you are a European National, although there may be a restriction based on purchase of property or land based near a sensitive area, say an airfield or military base. If you are a none European National then you can still purchase property although the whole process would become protracted. The rules governing this issue are not that clear but your solicitor would almost certainly have to apply for a license on your behalf to the Ministry of National Defense, submitting the title deeds to the property. Your credentials will be checked and the purchase either approved or not. This process could take 6 to 8 month, and there will also be an issue of immigration to be addressed. The question of the deposit could also be a problem for transactions taking a long time, which you may loose if approval was not given.
  
  
• Is there a proper land registration system in Greece?
  Yes, the Greeks are now getting to grips with land registry and there are very detailed documents involved to establish correct ownership and freehold title of all properties. See Crete Property Registry
  
  
• Is buying property in Greece protracted and difficult?
  Not now the system of registration has been introduced. Having decided on your property and appointed a lawyer, the deal can be finalized usually in 4 weeks. You will have to decide if you wish to give your lawyer or representative complete power of attorney or you may decide to return to Greece to finalize the transaction yourself. A non-refundable 10% deposit is required to start the process on the payment of which the property is immediately taken off the market pending finalization of the purchase. Ensure however that a full search is completed and the property is 'clean', because the new owner is liable for any debts of any previous owners.
  
  
• We wish to view one of the properties listed on your site. What is the next step?
  Email property@crete-connections.com and we will go over the details with you and arrange any appointments.
  
  
• Are there any additional costs involved in purchasing a property in Crete?
  Total expenses including Taxes are between 12% and 15% of purchase price. It is difficult to be precise because the amount of tax will be assessed at purchase stage. Normally the tax assessment is a lot less than the purchase price although the 'objective tax' has new been currently reviewed. Please see our "General Information" section below.
  
  
• Why do estate agents charge a commission fee to the purchaser when they purchasing property in Crete?
  Estate agents in most EU countries charge a commission fee to the purchaser, agents in Greece aren't an exception to this. What you get for this fee differs from country to country and agency to agency, some only levy it as a basic introduction fee to show you the property and provide no other services. In Greece the 'agency fee' varies from 2.5% to 4% of the purchase price, ours being at the lower end of the scale at 2.5%. Unlike some other agents in Crete we look after your interest during the purchasing process, introducing you to an independent lawyer, sorting out the registration paperwork, the connection of local utility services, make contact with the local authorities and general officialdom in Crete. Because we have purchased property in Crete ourselves from a 'foreigners perspective' we found that one may require help long after the final contact is signed and in this regard we are unique.
  
  
• What is cost of living on Crete?
  The cost of living in Greece is substantially less than that of the UK according to recently announced information by the Greek Consumer Centre (ELKEKE). The cost of living for a family of four to the end of January 2006 was €2,515 euros (£1,734) per month, an amount that includes average mortgage payments. The figures are average ones taken for the country of Greece as a whole, Crete being an essentially a rural community the cost of living will be substantially lower that that of one of the major cities such as Athens. The cheaper living cost make it a very attractive place to retire to, or for those just seeking a gentler pace of life.
  
  
• Free Inspection Trips: Matt (my husband) and I went to a Property Abroad exhibition yesterday [in 2007] thinking that it would be several companies selling homes abroad, however, there was one company [name withheld] in particular who took our eye who have only recently started dealing with properties in Crete. They were not too pushy and offered a 4 night stay in Crete for £20 (!) to include full board, flights and an inspection tour of properties we may be interested in. However, Matt thinks this may be a hard in selling visit and they will push us into buying a property whilst we are there. Can you advise at all?
  We do not know this company but having done some research they are a large property company operating from several countries, Crete being their latest venture. Nobody can finance trips to view abroad without being fairly sure that the viewing trip will result in a sale. It is therefore likely that you will be subject to hard sell very similar to the time share operatives. Your accommodation could well be miles from anywhere so you are trapped as it were. Your only entertainment being the constant selling techniques aimed at you, which can be exhausting to the point where a commitment is made. We cannot say this is how this particular company works but if an offer seems to good to be true, it usually is.
  
  
• Why don't internet sites publish many details of the properties for sale in Crete?
  This is a very good question and is due to the very competitive nature of the property market in Crete and between the various property agencies, each being very protective of their clientele. It is our intention however to be 'open and honest' with the description of the properties that we list on our web site as we feel that not to do so would waste everyone's time. It is said that "imitation is the finest form of flattery" and we are now finding that some agencies in Crete are now copying our editorial style and presentation, some even these FAQ's. Our collated property news stories are also being copied, without any attempt as least disguising the fact. Let's hope that they all now also live up to our standard of customer care and consideration!
  
  
• Is it safe to buy property in Crete?
  Yes, providing you go about it the correct way. We have direct experience of purchasing property in Crete from a 'foreigners' perspective and are well aware of the pitfalls in doing so. As well as the time and worry aspect, one can spend a lot of money unnecessary if one goes about it the incorrect way. You may also want to consider using an agent that is affiliated to a member of a trade association, thereby getting and extra level of assurance. As a member of National Association of Estate Agents we, and other agent like us, adhered to a strict code of conduct (ethics).
  
  
• In his britsincrete posting on the 24 August 2008, 'Buyers Beware' Olivio highlights an issue regarding the village boundaries in the Rethymno prefecture (region)
  This problem has been well documented for sometime, the issue arisen essentially due to the fact that local government having overstepped it's authority in extending village boundaries and allowing development on this additional land. Any property built within the 'old village limits' remains unaffected as does property outside of this area. Builders and developers were genuinely unaware of this issue until only recently and all future building in these areas has now stopped until the ruling comes through from the central Greek Government. Unfortunately this gives uncertainty for those who have already purchased property in this region and it is especially difficult to sell such a property until this matter has been resolved. For those people who love this particular area of Crete and are looking to purchase, any solicitor as part of the diligence process will be able to check the boundary and see if it is in dispute. In purchasing property anywhere in the world checks would have to be done and Crete is no exception, these include ownership, boundary, topograph, tax, inheritance, etc. Despite Olivio's suggestion otherwise, there is very little opportunity for an owner to 'covered up' this problem as it is a simple process of looking at the village boundary map. As always, whether one is looking to purchase an old, new or 'off plan' property it is also best to appoint an independent solicitor and one who is familiar with the area.
  
  
• Is property in Crete a good investment?
  Properties of all types are very much in demand due to the lower prices compared to much of Europe. The variety in the types of property available and the Cretan climate is attracting many people from Europe to take up residency in Crete. However, like in the UK it is always wise to treat property as a home rather than an investment.
  
  
• We are looking to purchase a property and would like to find a specialist mortgage broker. We also like to get the best possible deal on the currency exchange, can you offer any suggestions?
  Electronic cash transfers from your own bank or building society can end up quite expensive. There are however companies who specialize in the transfer of funds using the commercial exchange rates instead of the more expensive standard tourist rates. Suggest you search the internet for 'currency exchange'.
  
  
• Is it better to take out a mortgage with a UK or a European Bank?
  One option to find the cash to purchase a property abroad is to unlock the capital in any existing UK property that you may own. Your local bank or building society can help, your new or second mortgage being against your UK property and not your second home abroad. The other option would be to take out a mortgage with a European bank, the advantage of this being that the interest rate charged on such a mortgage will typically be 2% lower than that ask by a UK institution. The downside is that you will be reliant on the euro / pound exchange rate fluctuations which will be outside of your own personal control. This can result in a bit of a lottery that you may win or loose, it is therefore better to take professional advise on such matters.
  
  
  
• I am a builder by trade and would like to purchase a piece of land and build my own property. What is the maximum build size and would I have to engage an architect?
  The law in Crete will require you to use an architect if you are going to be involved in the construction of the roofs and walls as it now has to conform to strict building standards. The maximum build size would be 400m² and then only if the land is within the 'village boundary'. Outside the boundary 200m² would be the limit for a private residence. Crete Connections would be happy to find some land for you and put you in touch with the appropriate professional bodies.
  
  
  
• We are about to purchase a development property and are being ask to sign a contract in English. Is this ok?
  You do not say where this development is but it is advisable to ALWAYS get any contract checked by an independent solicitor and not one that is appointed by the development company. It is doubtful that signing a contact which is written in English as a legally binding, because as far as we know all documentation has to be translated into Greek and it is that translated document that you will have to sign. This is why you should instruct an independent solicitor, as you will need an assurance that what you're signing is in fact what you are expecting to sign. We have heard of one case where a person living in a property for 3 years wanted to sell it, only to find that it was not theirs to sell.
  
  
• We are about to purchase a property through a developer in Crete but are unsure and worried about the possibility that things may go wrong. Are there any suggestions that you can make?
  By the sound of your email you do not appear that confident in either the developer and / or the process involved; our advice would be that unless you have full confidence then its best not to proceed with the contract. It is very difficult to keep up with building work so far from home especially where staged payments are involved. If you are looking for an independent way of keeping track of the 'work in progress' then we offer a monitoring service and can inform you immediately if the building development is not on schedule or going to plan. There is a minimal charge for this service, but it may give you the peace of mind you require.
  
  
• My wife and I purchased an off-plan 2 bedroom property for our retirement through a large development company in Crete [name withheld] about two years ago and is yet to be completed. Despite many emails, letters and visits to their offices none of their staff appear to be the least bit interested in getting the house finished, indeed we are totally fed up with the many accuses given. A while ago we decided to put the matter in the hands of an independent solicitor, but progress is very slow. Is there anything else we can do as we are desperate to get our life savings returned?
  We have heard that this large development company is having serious problems looking after their clients, and have many dissatisfied customers in such a position as yourself. It is a real shame that one has to undergo the stress of trying to get ones money refunded especially as your life saving are involved. Unfortunately yours is not the only email we have received on this subject and it is now best left to an independent lawyer to pursue your case and get your money returned. We are assuming that because you used the development companies own lawyer when signing the building contract, and it is this that this is making your own case for a full refund harder to accomplish. There was an editorial published in the Mail on Sunday on the 22nd April 2007 which may be of interest and may contain additional information that will help pursue your own claim (click on the image on the right to view a copy of this article).
  We advise people purchasing property abroad (regardless of the country) to ALWAYS use an independent lawyer when signing contracts. If the development company is a genuine one then they will not mind you doing this and should be somewhat supportive of your decision. You can also have penalty clauses written in to the contract should the building work be delayed or not completed to a specific standard.
  
  
• We have just purchased a development property only to find that we are on a shared water and electricity supply. Both utilities are shared amongst each of the house holders which we think is unfair as we are only in residence 4 months of the year. As the other properties are occupied all of the year around we feel that therefore we shoulder more of the expense than is necessary. Is there anything we can do about it?
  This is something that a small number of developers do to save themselves money and increase their profit, and is quite often overlooked by people when purchasing a property. Unfortunately while not impossible, it would normally be very difficulty to split the utilities and to have individual electricity and water meters installed. We very much doubt that there would be a way in getting the development company to pay for this work as it will almost certainly be described in the 'small print' of your contract. Alas the only another way may be to come to an amicable agreement with your neighbors to only pay a percentage of the annual costs.
  Anther reason could be that the development hasn't had the final sign-off from the authorities, this could be due to anything from unpaid tax, land registry issue, inconformity in the building plans, etc. You will have to speak with the developer to get to the bottom of the issue, alternately you will need to contact your Notary.
  
  
• I would like to live in Crete but what are the medical implications?
  With regard to prescriptions, despite being part of the European Union, Greece has not yet caught up with certain things. The local pharmacies should be able to match any prescription or find a suitable product if you show them a packet of your medicine. We often find that prescription medicines are cheaper over in Crete than the actual prescription charge in England. Should you have a 'special' requirement then it may well be that you will have to visit a doctor to get a prescription in order to purchase drugs or medicines. I am afraid this can be expensive but is subject to change. Most pharmacists speak English and can advise you. At this moment in time a letter from your doctor would only explain your condition and the required drugs but would not exempt you from having to pay. If you are going to live permanently in Crete then you should take up residency which would then enable you to have certain advantages such as hospital treatment under the Greek National Health System.
  Please note this is just general advise and you should seek the most up to date information regarding this matter if it is of a great concern to you.
  
  
• I would like to start my own small business in Crete and so would like to purchase a property with living accommodation and a retail outlet, perhaps you can help me?
  The problem with having living area over a business premises is that most shops are leasehold and you can only lease them. It is doubtful if you could find exactly what you are looking for, i.e. purchase a livable property with a business outlet, although we now have such a option listed on our businesses for sale section. Another option would be to purchase a house near town and perhaps rent a lock up premises (or shop).
  
  
• Would it be possible to use my own (UK) registered car in Crete?
  Yes is would be possible, but please be aware that like the most of Europe, Crete drivers drive on the right hand side of the road making driving a car that has right hand steering a little tricky. Under the EU directive 83/182 of 1983 it is legal for a non-resident to keep and use a foreign registered car in Greece over six months before having to pay that country's car import taxes. Full information regarding the import of cars is available from the Ministry of Transport and Communications, Directorate General for Transport Athens Tel: 01-325-4515. More information on this and other legal matters relating to non-Greek national requesting residency in Greece (Crete) can be found on the ec.europa.eu web site.
  
  
• If I purchased a plot of land on Crete would it be possible to park a caravan on it for the summer season?
  The law is not that clear on this matter, but from our enquiries it seems unlikely that this will be allowed. There are few designated caravan parks in Greece and the only instances where we have seen caravans in use, is on land where a house is being built so planning permits are covered.
  
  
• I am looking to purchase a property in Crete as an investment with a view to letting it out to holiday makers, the income from which will cover the mortgage repayments. When I retire I plan to live permanently in Crete. Please can you give me guidance as to whether this is a good idea?
  Unfortunately one cannot guarantee income from holiday rental property as this would depend to a large extent on world affairs. Also the rental income one could command from a property would be dependent upon its type and location, generally the closer to the sea and the newer the property the greater the rental income. Property with a swimming pool is also an asset and good sea views are especially sort after. Browse our site to get some idea of the weekly rates but just to give you a better idea if you look at our private villas section. These villas are usually booked for 7 or 8 months of the year and normally well in advance of the season. We at Crete-Connections can help you along this route if you wish to proceed and unlike may companies will genuinely set your expectations accordingly.
  
  
• OTE License (Greek Ministry of Tourism)
  A OTE licence is required whenever you rent your property for under 3 three months in any one period to a single person or party, and would therefore cover most holiday rentals. You will also be required to pay Greek income tax on any earnings. Like in the UK, all holiday rental accommodation has to conform to certain architectural, environmental and health and safety standards which normally require several visits by the Greek tourist authorities. An architect or civil engineer will get you started with this process and we can certainly point you towards the appropriate persons. In case of any accidents you can be sued and possibly imprisoned if you have no license for your holiday accommodation. Greek officialdom is neither easy or quick and if one wishes to pursue letting out holiday accommodation as a business in Crete then one must be prepared to follow the Greek mentality of 'slowly slowly', as the authorization process can take a while. Once obtained the OTE licence lasts 5 years. This is for information only and the guidelines are changing all of the time, it is therefore always worth taking professional advice.
  
  
• Where are the legal documents on my property held?
  Regardless whether you live in Crete or not, all legal documents and plans are held with the notary in charge of the purchase of your property. Anyone can obtain a copy of the plans of 'new build' property from the notary with or without your consent. As the owner of the property you will receive copies of all relevant documentation.
  
  
• I'm a UK citizen and thinking of taking up residency in Crete, can you advise me on any tax implications?
  Sorry but we do not run a tax advisory services. Taxation requires a highly specialized area of knowledge and you should seek advise from a qualified tax advisor who specializes in helping overseas clients. We have however put together some general information which is only relevant to UK citizens seeking residency outside of the UK (see below).
  
  
• I am considering living in Crete and would like to take our pet with us. Is this possible?
  If you currently reside in the UK you can obtain a "Pets Passport" for your pet. Please contact the UK Department for Environment Food and Rural Affairs (http://www.defra.gov.uk/wildlife-pets/pets/travel/index.htm) for further information or call 0870 421 1710 (08:30 to 17:00 Monday to Friday) and ask for a Pets Travel Scheme Information pack. If you are non-uk residence a different schemes will apply, in which case please contact your own local government offices.
  
  
• What is the attraction of purchasing property in Greece?
  We have a few pages dedicated to these questions - [Greece] or [Crete]
  
  
• We have just purchased a old property that is in need of renovation, can you help us with builders and trades persons to bring it up to a livable standard?
  We can help you with the organization and auxiliary work required to bring a property up to a livable standard, then you can do the rest. This service service is available even if you did not purchase the property through us. For 15% of the cost of the building work we will organize the various building inspectors, surveyors and workmen. Normally because of our local knowledge and close association with the various building trades we should not only be able to save you the cost of our management fee but also the aggravation and worry. Someone on hand as the work progress will give you peace of mind that everything is being done to your own specification, in addition to which we will send you regular updates and photographs via email.
  
  
• We own property in Crete and would like to know what Greek laws applies which may effect passing on the inheritance to our loved ones in the UK?
  Always a delicate subject this and it is best to take proper legal advise on such matters, however article 28 of the Greek Civil Code states that "inheritance relations are governed by the law of the citizenship which the deceased had when he died". According to Christos Iliopoulos, an Athens attorney at the Supreme Court, this means that if a French national dies and leaves property in Greece, it is French law which will determine who inherits and what share. Greek law will only determine how much inheritance tax will be paid to the Greek state by the heirs. But who are the heirs will be decided by French law. Another example: a UK citizen residing in Greece may write his/her will (handwritten, public or secret) in Greece. However, how the deceased's assets are distributed will be based on British inheritance law rather than Greek legislation. In England, you are free to dispose of your estate as you wish. According to the European Commission - the 25-member bloc's executive arm - the growing mobility of people in an area without internal borders and the increasing frequency of unions between nationals of different member states, which often entails the acquisition of property in the territory of several EU member states, is "a major source of complication in succession of estates". The commission is proposing the creation of a central EU-wide register of wills.
  

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General Information - (expected expenditure and the legal system)

For some years it has been possible for citizens of the European community to purchase property in Crete. Many people are taking advantage of the prices which are lower than in their own country and purchasing, as either a holiday or retirement home.

The Legal system
As in your own country, buying a home is probably the largest investment you will ever make and requires legal control to overcome cut-throat practices one often reads about. Having chosen a property that you wish to purchase the usual procedure is to pay a non returnable deposit of 10% [sometimes less] which ensures that no other prospective purchaser is allowed to offer to buy the same property from under your nose. An agreement would be signed which confirms all the details regarding price and description of the property. You would appoint an English speaking lawyer to hold all monies until the sale was completed. Should the vendor renege on the deal then your 10% deposit would be returned plus a 10% indemnity from the vendor. Assuming the title deeds are clean [or you would not be going ahead] to finalise the transaction should only take 3-4 weeks. The actual transaction will be overseen by a Notary with the vendors and purchasers lawyers present. Land registration is carried out following exchange of contracts and the key is then yours. The Notary's function is to oversee the whole transaction and to ensure that the title deeds are fully in order. It is not unusual in Greece for 10 people in one family to own parts of the title, hence the need to adhere to the system for your own protection. The deeds should include ground plan (topograph) of house together with any land that goes with the property.

Having already visited Greece to chose your property, there is no need for both husband and wife to return for the transaction. Providing one or the other partner has full power of attorney a bank account can be opened in one partners name and monies transferred from home ready for the final transaction. This way there is a saving on air fares, accommodation etc. [Note; retain the 'pink slip' which will be given to you by your bank after transfer of funds. This will ensure exemption from local taxes]. Alternatively you can arrange power of attorney through the Greek consulate in your home country and if purchasing through a development company then stage payments will be required as the new house reaches various stages of completion. This is quite straightforward providing you use the services of a lawyer from the beginning.

The notary and lawyer will agree on a figure for tax purposes that is usually lower than the actual purchase price, quite an advantage to the purchaser. The 'objective value' assessment is sent to the tax office for approval. This is likely to change in the future due to EEC regulations. Tax is currently 9% on the first 26,500 euros. then between 11% and 13% on the balance, depending on the assessment agreed by the tax office.

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General Information - (tax advise for UK citizens) tax years 2003/4/5/6/7/8/9/10

Before you leave the UK

• Complete Inland Revenue form P85 (see www.hmrc.gov.uk/cnr/p85_p85s.htm) to apply for non-resident status. To retain this status you can not remain in the UK for more then 90 days a given tax yearSited within 30 metres of the sea it is proving to be a very popular development
• Complete Inland Revenue form R105 (see www.hmrc.gov.uk/pdfs/r105pr.pdf) so that interest on UK bank and savings accounts can be paid gross. This is known as a "not ordinarily resident declaration"
• [Continue to] pay voluntary National Insurance contributions if you wish to maintain your UK government pension
• Seek tax advise specific to your new country of residence. Tax such as in Spain are run in a calendar year and may be soon regionalized
• Consider utilizing British tax breaks - such as an individual savings account - which non residents are not allowed to invest in
• Use an agent to manage any rental income from UK property
• It is worth setting up an internet bank account the funds through which can be managed from abroad

Before you return to the UK

• Close all bank and building society accounts and open new ones immediately before you return to void income tax and capital gains tax in the UK
• Where bonuses or other payments can be received before returning to the UK, it may be beneficial to negotiate to bring payment forward
• Consider selling or putting in a trust assets which have appreciated in value to void UK capital gains tax (CGT)
• Assets bought after leaving the UK should be sold in the tax year before your return to the UK to avoid tax in the UK
• Where you do not wish to sell assets and have been non-resident in the UK for more than five years, consider setting up an offshore trust
• Seek professional advise specific to your individual and family circumstances before you return
• Complete form P86 (see www.hmrc.gov.uk/cnr/p86.pdf) to register your return to the UK with the Inland Revenue