Crete Select Property
Buyer's Guide to Purchasing Property on Crete
All EU citizens are entitled to buy property on Crete, and the procedure is well-regulated and relatively straightforward.
Separate lawyers act for vendor and buyer, and the sale is overseen and must be approved by a local public notary, a government official who ensures that the sale is legal and performed in accordance with all necessary regulations.
Your lawyer acts solely on your behalf, and is there primarily to search and confirm that the title deeds are clean of any outstanding debts or third party rights and the vendor is legally entitled to sell the property to you; to oversee the transfer of monies; and to change the ownership of the property into your name.
Pre-Sale
If you are planning to purchase property here, make sure you have not only your passport but also a copy of your birth certificate with you, if possible. Your birth certificate is not always required but can be asked for, so it is useful to have.
Open a local bank account – there are several banks in Sitia town and there will always be at least one member of staff who speaks English – you can open an account on the spot.
Obtain a Greek tax (AFM) number – this can usually be obtained on the spot from the local tax office in Sitia town. Again, you will usually find at least one member of staff who speaks English, or your lawyer can also obtain your tax number for you.
To transfer funds from the UK, we recommend using a specialist currency transfer service rather than your local UK bank, in order to take advantage of the better exchange rates offered on large transfers. When transferring monies for a purchase, make sure to keep a copy of the transfer slip which proves money was brought from outside Greece to pay for the property.
If you require a mortgage, many local Greek banks will consider providing you with one. Alternatively, there are UK brokers who provide mortgages for purchasing property in Greece. See Useful Links for more details.
If you wish to reserve a property from the market while making financial arrangements for the purchase, the property can be held with a deposit paid on a preliminary contract. While this prevents the seller from withdrawing without compensating you, note also that should you subsequently withdraw you will lose your deposit in full.
It is possible to give a power of attorney to your lawyer which enables them to complete the sale on your behalf. This is an option frequently used by foreign buyers who cannot remain on Crete until, or return for, contract signatures.
Post-Sale
Transferring utilities into your name can be done at the local town offices with a copy of the property contract and your passport. You can also usually arrange to have utility bills paid direct from a local bank account.
Managing your annual tax return - although very few properties are subject to any annual tax (see 'Taxes and Fees'), all property owners must go through the formality of completing a tax return every year. Your bank transfer slips are necessary for your first tax return, as they prove that you did not make your property purchase using income earned in Greece (which would then be viewed as taxable). A local accountant can manage your annual return for you.
Purchase Taxes & Fees Payable
Note: All taxes and fees for property purchase in Crete are calculated on the amount stated on the contract of sale. This rarely used to be the actual purchase price but was more often based on the ‘assessed’ or 'objective' value given to the property by the tax office for tax valuation purposes during conveyance, and set considerably lower. This was standard practice for real estate transactions in Greece and worked in the buyer's favour as it considerably reduced the amount of purchase taxes & fees payable. The practice is still widespread but since the introduction of capital gains tax, if you are contemplating re-selling the property in the near future then it is worth considering whether you wish the full purchase price to be stated on the contract.
Purchase or Property Transfer Tax: This is a one-off tax payable on purchase, based on a sliding scale of around 7-11% depending on whether the property is classed as urban or rural.
Municipal Tax: 3% on the total purchase tax paid.
Public Notary fees: Usually around 2% of the amount stated on the contract of sale.
Lawyer’s fees: Based on a sliding scale, around 1-2% of the amount stated on the contract of sale.
Other Taxes
There is no council tax equivalent. A very nominal amount of Public Tax is levied on each property owner via the electricity bill (which arrives every two months).
Only property with an ‘tax assessed’ value (see above) in excess of 175,000 euros for a single owner or 350,000 euros for joint-owners, is subject to a small amount of Annual Property Tax (between 0.3-0.8%), and then only on the exceeded amount.
Capital Gains Tax applies to property purchased after Jan 2006. It is only imposed on the difference between the acquisition cost of the property and its sale price, at the following rates: 0-5 years, 20% ; 5-15 years, 10% ; 15-25 years, 5% ; 25+ years, 0%.