Crete is a wonderful island full of lush greenery even though temperatures can reach the high forties during the summer months. It has many beautiful beaches without any of them getting really packed out. There are so many exciting places to see that it would take many years to see them all. The summer seems to extend from mid April to mid October and the winters, whilst a bit damp, never get really cold except in the high mountains which are beautiful on Crete and stay snow covered from November to June. The spring is unsurpassed by any island as the landscape becomes covered in the most beautiful wild flowers that have to be cultivated in Northern Europe.
Current update 15 Jan 2019
Purchasing a Property On Crete.
So buying a property for either permanent living or as a holiday home is a must, especially as prices are very low at this time. How do we go about this: ...
• Choose a property. If you need some help, Kambia Crete can advise you about the area, access, local interests etc, provision of water and electricity. We can also advise on your behalf if the views etc are as advertised .
• View the property. You will need to arrange a flight and accomodation whilst on Crete.
• Make an offer to the vendor.
• Secure your property. Upon agreement of price it will be necessary to pay a 10% deposit to the vendor. Sale contracts move quite quickly in Greece, so once you know your property the deposit will need to be paid as quickly as possible or you could lose your dream home.
• If buying a resale property it would be advisable to appoint an Engineer to check the legality of the property you wish to purchase. Many properties on Crete have had additions to them which have not been notified to the Authorities. If these additions are not legalised and the fines paid, you may find it extremely difficult to sell your property in the future. If your property is a new build, an engineer will still be required to check that the building complies with the registered drawings and the licence deposited by the builder to the Government. Any non compliance may be subject to fines.
• Appoint a lawyer. Greece has lawyers not solicitors. It would be advisable to appoint a lawyer who also speaks in your native tongue. This is probably the most important part of the process, so take great care in your appointing. The lawyer will require you to appoint him/her as power of attorney. This will require you to fill in a Power of Attorney form provided by the lawyer and then get it notarised as a legal document by a Public Notary in your country of residence. This power of attorney will allow your lawyer to act on your behalf in paying fees required for the purchase and the setting up of your Greek bank account and also registering you as a Greek Tax payer. Tax is required to be paid to the Greek government for the purchase of the property. The lawyer can also be appointed to release monies to the builder as stage payments when you are satisfied the works have been completed. Another important job for the lawyer, if the property is new build, is to check that IKA, the Greek taxation paid to the Authorities for the workers on the property build, has been paid. If you purchase the house and IKA has not been paid, then you will pay it
• Contract exchange. Both parties, vendor and buyer will be represented by their lawyers and the process will be overseen by a Public Notary who represents the government to ensure that the exchange is fully legal and correct. At this stage ie after a pre - contract is signed, if the buyer pulls out, then they lose their deposit. If the vendor pulls out then he/she must return the deposit to the buyer plus the same amount again as a penalty. During this exchange an “ Official Assessed Price “ is fixed. This will be quite a bit lower than the purchase price, sometimes 25% lower. This assists the buyer by keeping the fees as low as possible. It will also assist the buyer later by keeping his tax bill lower.
• Payment of fees. This can’t be generalised as each type of building changes the VAT requirement. There is no transfer tax now, just VAT. Resales attract VAT at approximately 10% but new builds will be higher. The Greek Notary fee will be about 2% and the legal fee will be about 2%. They shouldn’t be higher than this. So allow about 14% for fees and you wont be far off.
• Completion of contract. The Greek Notary will draw up the legal document which usually takes about 6 weeks. You can be present if you wish but best to allow your lawyer to act for you. All parties sign the contract and then the property is yours. It is essential to appoint an Accountant on Crete. Preferably one local to your property. If you arrange a power of attorney with him/her, life on Crete will be very much easier.
Selling a Property On Crete.
Selling a property on Crete is much the same as in other countries and many of the salient points will apply. Crete however is a bit awash with really good properties at low prices so you need to pitch your property at the right price and ensure everything is legalised:
• Advertise. you will need an estate agent to advertise your property. The agent will also advise you on the best possible price you can get for your property. On Crete, estate agents charge the seller and buyer. The fee is usually about 2.5% of the price but shop around for the lowest price.
• Check the legality of your property. If you haven’t had your property checked by a qualified engineer, then now is the time to do it ! The buyer may come with an engineer who will check the legality of your property under the new Greek Law 4178/2013. If your property does not comply then the engineer will instruct your buyer that they cannot purchase the property. You need to ensure your engineer has provided the correct documentation to your lawyer.
- Important. Most Greek properties have been purchased as properties on shared plots. A little known law is that, if and when an owner wishes to sell their property, the property MUST be separated from the other property/s by both a horizontal and a vertical separation. The horizontal is usually done by the builder but the vertical separation must be done by the seller AND the owner/s of the adjoining property/s. This can often lead to problems as the neighbours would not want to pay for this, so the seller would probably fork out. Expensive if you have two neighbours or even three or four.
The separation involves a lawyer, a notary and an engineer. The engineer will provide an up to date topography of the properties to be separated. You MUST check this carefully.
• You will also need the Engineer to collect all the building documentation for the property and this has to be given to the purchasers Engineer for checking. Your lawyer should do this.
• If your property complies with your original Building Permit and any subsequent Building Permits and you have an interested buyer then you need to appoint a lawyer. Preferably a Greek lawyer who speaks your language. The fee will be about 1% of the price but this may differ between lawyers.
• You will require an energy rating certificate (PEA ) for your property which will show the energy consumed per annum. An architect/engineer will provide this for a fee of €2 per square metre plus VAT. On top of this you will pay an additional fee to the engineer for his signature on the final contract documents. This can be as high as €300.
• Your Accountant will need to provide a certificate showing you have paid the necessary Property Tax.
• Last but not least the Greek Government are due levy a 15% Capital Gains Tax. A tax on the difference between your purchase price and the actual selling price. You can calculate the amount of tax you will pay on completion of selling here. At this present point in time ( 2019 ) this tax is not being collected but it may happen in the future.
It is essential that you check with all parties that all documentation is in place as Greek Law is subject to change quite often.
Buying Land on Crete
Many people love the idea of designing and building their own home on the Mediterranean coastline. To do this they first need to find a plot of land. The land will have the perfect views, easy access, not looked over, easy access to electricity and water and no future construction to spoil the views. Should be easy, shouldn't
Well, the first bit needs to be carried out with great care. There are still people all over the World who will offer land that doesn't belong to them or have restrictions to build or even taxes owed on the land. A pity, but this goes on here in Crete.
When you find that perfect plot you MUST do the following:
- Check that the seller really owns the land. There is now a Land Registry on Crete. If the plot is not written into the Registry, locals can easily assure you who owns the land.
- Check the size of the plot and which Restrictions it will fall under. See below.
- Check if there are any Archaeological Restrictions imposed on the plot.
- Check if there are any Forestry Restrictions imposed on the plot. The best idea is to apply for a Certificate of Excellence ( Vevaiosi Artistitas ) for the plot. Your Engineer can get this for you. This will clear the plot of all municipal restrictions.
- Check that water and electricity can be brought to the plot. If a long distance, this can get very expensive.
The following are the current rules for building on plots c September 2018.
The word " build " denotes the phrase permission to build.
Inside village or town boundary:
0 to 199 m2 - build 0 to 199 m2
200 to 699 m2 - build to 240 m2
700+ m2 - build to 400 m2
Build can be on the boundary or 2.5 mtrs from it.
Inside village or town Building Zone ( 500 to 750 mtrs ) :
Minimum plot size 2000 m2
Maximum build size 200 m2
Build can be up to 5 mtrs from boundary.
Outside village or town limits:
Minimum plot size 4000m2
Maximum build size 200 m2
Build frontage must be at least 45 mtrs from a main road.
Build must be 15 mtrs from the boundary.
Additional useful information:
- The cost for building you property WILL NOT include the cost of fees, taxes and general landscaping which is noted as entrance gates, boundary walls, swimming pools, pathways.
- Check how, and the timing of, the builder will require payments.
- You will probably need a 10% deposit and fees are generally about 15% of the purchase price.
- Building prices range from €1300 per m2 average to €1500 per m2 high spec.
- Get a good solicitor, accountant and engineer. This will save you a lot of trouble. DO NOT let the builder do any of their tasks. It won't get done.
- You need a Greek bank account which the solicitor can do for you under a Power of Attorney.
- You also need a Greek tax number ( AFM ) See you accountant.
- If you are to reside on Crete you will need a Residents Permit which you get from the Police Station in Vrysses.
Good luck and happy hunting.
If any member of Kambiacrete.org were to advise the use of any of the professional services described above, Kambiacrete.org, nor any of its members, cannot be held responsible for any lapse, mishap or misjudgement by said professional.