Buying a house in Greece can cause unique problems for the uninformed property buyer as Property Law in Greece has varied idiosyncrasies.
It is quite normal to be both excited and worried about the possibility of buying a house in Greece, as acquiring a piece of sunny Mediterranean land is a wonderful project, but in an unknown jurisdiction it can be quite stressful.
The truth is that it could indeed turn into a risky business, if not all steps are followed deliberately.
It is important that you follow the advice of a lawyer who is experienced and can guide you through the process.
There are many complicated issues that can arise when buying a house in Greece – one of which relates to the state/objective price of the property.
The Greek state sets objective criteria for assessment of the value of a house in Greece, and the competent tax authority estimates the objective price of a house to be purchased based on those criteria.
The objective price could be significantly higher or lower than the commercial price.
Since the biggest expenses faced by a potential buyer such as purchase taxes, notary fees and land registry fees depend on the price of the property, one might expect to be able to calculate those expenses based on the offer price made on the property.
Well, this is not always the case, as those fees are eventually calculated according to the higher of the two values – commercial or objective – whichever turns to be higher.
Avoid Nasty Surprises
One of our clients had a big surprise when making a house purchase in Greece.
He was to buy land of a relatively low price, not more than 50.000,00 euros, and thought he had calculated the tax and all expenses according to this price and to what the real estate agent had told him.
To his surprise the tax authority assessed the value of the land at 400,000 euros which would increase the cost of the purchase transaction by around 20,000 euros.
We did manage to find out this information at a stage where the client could still withdraw from the initial agreement with the seller, as when he was thinking of investing in Greece he had a specific scale of costs and fees in his mind which did not match the final ones as set by the Greek state.
Determining the objective price early on, especially for plots of land outside the urban planning zone and close to the beach, is of significant importance – even though only the tax authority is competent to set precisely this objective value.
Nonetheless, it is crucial if you are aiming at buying a house in Greece to be aware that there exists this objective valuation factor in the Greek purchase process and the range of the potential objective value of the house you are interested in purchasing.
In this way the expenses can be calculated and taken into account when making an offer for a property in Greece