Letting your property in Greece

When you let your property for short term holiday rentals, you are obligated to have an EOT licence (Greek National Tourist Board). However,  not for family and friends to use your property for FREE.
Obtaining a license from the Greek National Tourist Board (EOT) are:

1.Application form.
2.Declaration by applicant.
3.Rental agreement.
4.Certificate form the Fire Service.
5.Statement of suitability of the property.
6.Certificate stating that both water and cesspit arrangements attain the required criteria.
7.Criminal record of the applicant.
8.Health certificate of the applicant.
9.Receipts of payments of local taxes required.
10.Latest tax return of applicant.
11.Verified photocopy of planning permission of the building.
12.Verification that the building is anti earthquake proof etc, signed by qualified architect.
13.Plans of house plumbing etc signed by qualified architect.

In the last few years many people have let their holiday homes without having the necessary EOT licences.  However, recently the Greek authorities have started to check advertisements, etc. Owners that are caught without a licence receive hefty fines.

Obtaining an EOT licence is a complicated process which requires many documents.  It also requires the cooperation of an architect / civil engineer or you might prefer to involve your lawyer to act on your behalf.

Things to do when Accepting your inheritance in Greece

1.Research property, verify shares of takers, verify property parameters (see above)
2.If and when property is identified your attorney may recommend hiring a local
surveyor to map out property that has a high value.
3.Calculate the property’s value (in some cases it has an objective value which is set by
the Tax Office, in other cases the value is set by the Tax Office + additional data and
is an estimated value). It is on this value that the inheritance taxes, Notarial fees and the Land Registry fees will be based.
4.Draft Power of Attorney (P.O.A.) giving the attorney power to act on behalf of the client for all the next steps.
5.After receiving the original P.O.A. fully notarized and sealed from the client, (and a copy of the clients’ passport or driver’s license) a Greek Tax Id needs to be issued for the clients (these are requirements of the Tax Office).
6.Gather necessary certificates (such as certificates verifying existing Wills, death certificates, filing of foreign Wills, if they have not been filed in Greece etc.)
7.Complete Inheritance Tax Declaration and filing it at the competent Tax Office on behalf of the client. In some cases there are no property taxes. This can happen if the Tax Office has given the land a small value (agricultural), or because of a death occurring before a certain date. If there is an inheritance tax it can be paid in installments. The inheritance tax declaration must be filed within a year of the death of the grantor. If this deadline passes, a small penalty may be set by the Tax Office.
8.Draft the Inheritance Deed
9.Submit all certificates and Tax Declarations to the Symvolografos or Notary (not the same as U.S. Notary) and sign the Inheritance Deed in their presence.
10.filing official copy of Notarial Deed with the Land Registry.
11.Some areas of Greece require additional steps.

Inheriting and owning Property in Greece

So you were left some property in Greece.

Converting what has been written and published in a Will, into a Deed in your name, can be a very involved process in Greece. Many factors come into play. How was the Will written? Is the property clearly identified?

Many old Greek Wills are vague in their bequests, for example: “I bequeath all my property to my siblings.” When some others do not clearly describe the property: “I bequeath my son the land between Yannis’ farm and Demetra’s rock wall.” Where is the property located, its square meters or standing boundaries?

To legally accept property (transfer the Deed into your name), or even filing a declaratory tax form (E9/E1), you must have a clear description of the land you are attempting to claim, even if it is only the square meters within a given area. Of course not all Wills are ambiguous. Many clearly describe the land, any structures on the land and state who is to inherit.

Regardless, if a Will is clear or vague, the single most important first step is to research the chain of title. Competent research is the cornerstone of tracking land in Greece. If the research is not done correctly problems may surface later when developing or selling the land.

The Framework
In Greece there is no centralized/computerized National Land Registry system. While in some areas Land Registries have been created, they are few and far between. In most areas only Mortgage Offices exist. As attorneys we often refer to the Land Registry for clarity, but in fact we are talking about the Mortgage Offices here, because in other countries the meaning of the Office is different. The primary difference is that the Mortgage Office records titles by name and the Land Registry uses many more parameters.

Only Lawyers are qualified and permitted to research in the Land Registries and Mortgage Offices in Greece. In any land transaction the title to the land must be researched. Sometimes this involves more than one Mortgage Office. For example, in Athens, there used to be only one Mortgage Office. Over the years more than 30 new Mortgage Offices have been created. These Offices cover different time periods as well as areas; therefore, the researcher may have to search in several Offices to track down a property. In some island locations there is no Mortgage Office at all and the Office covering that island’s land may be located on a larger neighboring island.

In almost every case a lawyer must travel to the Mortgage Office or Land Registry if one exists, which covers the area where the land is located. If the land has recently been sold or accepted (covered below), the documentation may be clear enough for some other transactions. However, if the documentation is an old Will, or an even older acceptance deed, then it is imperative that the research is current to protect your interests. Changes may have occurred to the land or ownership rights over time. For example town boundaries may have changed which effects zoning or parts of the supposed inheritance may have been sold off without the claimants’ knowledge.

So what needs to be done?
1. The present owners (claimants) have to be identified by your attorney after studying:
a) Any existing Wills (inheritance occurs either through a Will or intestate (w/out a Will));
b) A detailed family tree in order to determine who can claim a share in light of Greece’s
inheritance laws and identifying individual deaths which may impact the claims, and;
c) In cases of intestate succession the heirs’ nationality will impact their share.

2. The properties must be identified by your lawyer. This can sometimes be the harder of the
two endeavors depending on the documents provided, the information logged at the
Mortgage Office, and if there are individuals locally who can actually identify the property.

For example, when trying to identify property, if there is no Will describing the property or if the existing Will is unclear and no documentation exists at any of the Mortgage Offices or Land Registries then you may have a serious problem. If there are no living relatives/friends residing near the property, to help with identification of the land, then there are limited ways to identify the land. In some cases, property has been trespassed on and if there is no written proof at the Land Registry, i.e. an adverse possession lawsuit, the only way to determine if trespass has occurred is by actually visiting the property.

Another way of looking at these steps required under Greek Civil Law, both the necessary documentation and the legal steps to clear title to your land, is that the Greek Government is trying to protect your property claims and those of your children. If anyone could walk into a Mortgage Office or Land Registry and claim a parcel of land, your ancestor’s land probably would have disappeared long ago. The reason to only allow licensed Attorneys to research at these offices is to create another level of protection for these irreplaceable documents.

There are real dangers to letting land “sit” without claiming it through these legal steps. It is your responsibility to establish clear title or you can leave the door open for trespassers. (see Hellenic News of America, “Think you own Property in Greece”). In addition, with the Greek Government’s attempts to reorganize the Countries Land Registries into a truly functioning property database, failure to assure current and clear title could mean the loss of your land. If you value your land in Greece, it is imperative that you act to protect your interests.

The Documentation
In order to avoid further delays and also help your attorneys better understand your case, you should provide them with the following:

1. Copies of any and all documentation describing the land (bills of sale, acceptance of inheritance documentation, acceptance of gifting, Wills) you have on hand and;
2. Draft out the family tree listing full names of family members including maiden and married names, if possible two generations before the grantor (drafter of the Will) down to you and your siblings. The attorney should search back through these family names to make sure you are aware of all your property claims, as well as, the share of the property you may claim.

The reason to have so many generations, apart from following the property in cases where there are no recent titles is that the Mortgage Offices record titles by name only. In some villages all the male children may carry the same name. The researcher must be able to differentiate which familial line is the correct one back through several generations.

Send your attorney copies of the above documentation and the family tree and they will be able to determine the next steps to take. Almost always the first step is Research.

The Research
If an old Will is the primary documentation it may take your attorney a while to sort out the wishes of the grantor and who the takers are, particularly if there are multiple marriages and numerous offspring involved. It needs to be determined if previous generations have accepted their inheritance so that the current generation may accept their inheritance. It is a layered process so that the chain of title remains intact.

Of course, problems can arise even with a recent Will. If, for example, the grantor (testator) leaves all of his property and assets in a Trust of some kind, the situation in Greece needs delicate handling. Trusts are not recognized and do not exist in Greece and they create enormous problems. It is wiser for individuals owning property in Greece to leave their Greek holdings outside of a Trust.

Keep in mind that the research at the Mortgage Office/Land Registry is the most important step in legally clearing property. The attorney should also research under all family names (i.e. grandmother’s maiden name), siblings, aunts and uncles. Most of the Mortgage Offices have numerous handwritten volumes which need to be cross referenced and then re cross referenced within their own organizational system. If other family members have accepted their inheritance these documents should be on file and will help in the research particularly if the property is jointly owned. The research should include verifying that there are no liens or burdens against the land, that the land has not been sold or gifted, and that there are no pending claims of ownership through trespass.

As stated earlier, in some cases, depending on how old the Will is, and depending on where the property is located, the Mortgage Office may have little information. For many years land was passed orally and written documentation did not exist. If there is no paperwork and no one locally can identify the land and the local Mortgage Office does not have any documentation it can be very difficult to trace property.

Of equal importance is verification that the properties actually exist. We prefer a visual identification to ascertain that no one has trespassed on the land. However, if the property is inaccessible (no roads) or there is no one locally to point out the property, this visual identification may be impossible.

The Acceptance
In Greece, one must accept their inheritance or gift of property. It is a formal, legal process involving a number of steps.

Your lawyer’s list of things to do when Accepting your inheritance:

1.Research property, verify shares of takers, verify property parameters (see above)
2.If and when property is identified your attorney may recommend hiring a local
surveyor to map out property that has a high value.
3.Calculate the property’s value (in some cases it has an objective value which is set by
the Tax Office, in other cases the value is set by the Tax Office + additional data and
is an estimated value). It is on this value that the inheritance taxes, Notarial fees and the Land Registry fees will be based.
4.Draft Power of Attorney (P.O.A.) giving the attorney power to act on behalf of the client for all the next steps.
5.After receiving the original P.O.A. fully notarized and sealed from the client, (and a copy of the clients’ passport or driver’s license) a Greek Tax Id needs to be issued for the clients (these are requirements of the Tax Office).
6.Gather necessary certificates (such as certificates verifying existing Wills, death certificates, filing of foreign Wills, if they have not been filed in Greece etc.)
7.Complete Inheritance Tax Declaration and filing it at the competent Tax Office on behalf of the client. In some cases there are no property taxes. This can happen if the Tax Office has given the land a small value (agricultural), or because of a death occurring before a certain date. If there is an inheritance tax it can be paid in installments. The inheritance tax declaration must be filed within a year of the death of the grantor. If this deadline passes, a small penalty may be set by the Tax Office.
8.Draft the Inheritance Deed
9.Submit all certificates and Tax Declarations to the Symvolografos or Notary (not the same as U.S. Notary) and sign the Inheritance Deed in their presence.
10.filing official copy of Notarial Deed with the Land Registry.
11.Some areas of Greece require additional steps.

After this last step, the property is finally transferred in your name.

All of the above legal processes, while not cost prohibitive, are not inexpensive. Calculate by your own country’s’ standards, what it would run to send a lawyer to a remote location, island or mountainous village, where they may get stranded due to inclement weather or perhaps hours away by car to conduct research in less that desirable conditions. Depending on the location it may involve an overnight trip to access all the offices that in Greece only have morning hours. Researching through old books, perhaps fire singed or volumes miscataloged, not to mention the time to research within these documents and filing the necessary paperwork. This involves an outlay of legal working hours alone not to mention travel expenses. Depending on your case you may need to add in inheritance taxes and maybe Court costs if there is a challenge to the land. Many of the above costs are set by the Greek Government, certainly taxes and Land Registry Fees. By sending your attorney paperwork up front in most cases they can estimate the initial step to research your property.

Land is an investment. If generations before you did not take the time or make the investment to clarify their title it is now in your hands. You must decide if it is worth the investment to you and your family, remember you cannot sell or develop property without taking these steps in Greece. The next generation, with the reorganization of the Land Registries may not get this choice.

Annual taxes for property owners in Greece

There are no annual taxes to pay in Greece, if the total value of the properties owned by the same person, does not exceed the value of 68.000.000 drs.(200.000 Euro).The valuation of properties, is carried out by the government, which provides published values, announced for every type of property.

As already mentioned above, these values are usually far below the real cost.

Additional cost when purchasing property

Additional costs for the purchase of property, come in the shape of :
1) 11% “property transfer tax” on the contract price, payable when buying only. The declared contract price cannot be less than the published government value which is usually far below the real cost.

2) 1-2 % lawyer’s fees on the contract value, subject of agreement between the lawyer and his client.

3) expenses of 1,5% on the contract value , for the completion of the contract, like notary fees, registry etc..
All expenses for the conclusion of the final contract, including the relative tax of property transfer will be borne by the buyer. However, each contracting party will pay the fees of his legal representative who will be present at the signing of the contract, as is required by the Greek Law.

Buying property in Greece

Formalities

All EU citizens have equal rights concerning the purchase or sale of property in Greece. Non EU citizens are also free to buy property in Greece, however with some restrictions as described bellow. The documents required for signing a property-purchase contract are:
a) Both the buyer and the seller must provide:
- A valid passport (or a legal identity card for EU citizens only)
- A Greek fiscal number which is obtainable by non Greek citizens, within 5 working days by the Greek Tax Authorities.

b) The seller should provide a “clean” B’ Tax certificate issued by the competent Tax Authority, according to Law 1882/1990 proving that he has no outstanding debts towards the Hellenic Fiscus.

c) An additional special permission is required for the purchase of properties close to the Greek borders. Such permission will be issued by the local Department Authorities and is not granted to non EU citizens.

According to the Greek law, the purchase contract, known also as a “Purchase Deed”, is signed by the buyer and the seller in the presence of :
- A Notary Public
- A lawyer appointed by the buyer
- A lawyer appointed by the seller

The buyer’s lawyer is liable to investigate that the property being bought is free and clear of any charge, lien, mortgage, and especially of estate taxes (viz. land property and inheritance) or municipal taxes, damages to neighboring owners and so forth. This investigation, held by the buyers lawyer, is the guarantee that the Title Deed of Ownership and the relevant certificates issued by the land registry, show that no third party claim or challenge of any kind exists.

Special attention must be paid to assure that the property is sold and will be delivered to the buyer, with the benefit of full vacant possession.

Greek Law – Greek real estate and property law part 1

Property prices differ greatly depending on where in Greece an investor chooses to buy – obviously islands like Crete and Corfu are more expensive than real estate located inland on the mainland. It’s fair to say that the more popular the location, the more expensive the property. An investor with a large budget might like to consider the fact that property priced over a certain threshold will attract an additional wealth tax annually for the owner. This threshold and the rate of wealth tax levied changes each fiscal year but is usually between 1 and 2% of the property’s declared value. In Greece it’s usual for the vendor to pay the estate agent’s fees therefore an investor may as well make use of their local knowledge and involve them in the search for suitable property investments. The other assistance an investor should engage is that of a local lawyer with knowledge of land and property law. As title documents and all contracts and paperwork involved in the property buying process will be in Greek, it’s essential to have a local lawyer who can deal with the red tape and translate key pieces of information into English for the real estate investor. Once a suitable investment property or piece of land has been identified it’s usual for the investor to sign a purchase agreement that is conditional to the satisfactory completion of searches and surveys and to pay a deposit of between 10 and 30% of the final property price. As soon as the purchase contract has been signed in front of a notary the investor’s solicitor can carry out title deed searches and ensure that everything is in order with the property being purchased. Once all searches and surveys have been conducted satisfactorily it’s possible to proceed to contract closure and this takes place when the vendor and buyer sign the purchase deed – again in front of a public notary. The additional fees, taxes and charges an investor needs to be aware of when buying investment property in Greece include: – Notary fees of between 1 and 3% of the property’s price. Solicitor’s fees which are usually 1% of the property’s price unless the real estate being bought exceeds a certain upper threshold limit at which point an additional fee will become payable. Greek property purchase tax which ranges from 9 – 11% with an additional 2% chargeable on city based property. Land registration fees which are in the region of 0.3% – 0.45% – and an additional small sum is payable for stamp duty. Annual property taxes of around 0.25% of the property’s value and a yearly community tax is often levied which amounts to 3% of the real estate’s transfer tax. And finally, when a real estate investor decides to resell his property assets and take the money out of Greece he may become liable for capital gains tax which is levied at a rate of between 10 and 25% and which is calculated on a sliding scale based on the length of time the investor has owned the property and the property’s value.

TRADING-INDUSTRIAL COMPANIES IN GREECE

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AMENDMENT, REPLACEMENT AND SUPPLEMENTATION OF THE PROVISIONS OF LAW 89/1967 ON ESTABLISHMENT OF FOREIGN TRADING-INDUSTRIAL COMPANIES IN GREECE
Law 3427/2005 – Selected Excerpts
NOTE: The following text is in no way a substitute for the law
1. Foreign companies may establish themselves in Greece in accordance with the provisions hereof for the sole purpose of providing the following services to a) their central offices, or b) enterprises not established in Greece but affiliated with those companies within the meaning of Article 42e of Codified Law 2190/1920. These services are consultancy services; central accounting support; quality control for production, products, procedures and services; design, drawing and contract preparation services; advertising and marketing services; data production, information acquisition and dispatch services; and R&D services. Companies thus established are obliged: a) within 12 months from the date on which the decision cited in the following paragraph is issued and thereinafter to employ a staff of at least 4 individuals in Greece, and b) to have operating expenses in Greece of at least € 100,000 per year. Both the company and its legal representative in Greece shall be jointly and severally liable for any infringements of the legislation concerning foreigner entry visa and residence permits, in addition to any criminal liability which may exist.
2. In order to benefit from the provisions hereof, a special permit is required which shall be issued by decision of the Minister of Finance & Economy published in the Government Gazette within 50 days from
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submission of an application to that effect to the Foreign Capital Directorate of the Ministry of Finance & Economy.
3. A similar decision shall be issued to revoke such permit where a breach of its terms or of this law is ascertained. Before such revocation, the public administration is obliged to invite the company in writing to set forth its view in writing on the infringements attributed to it within a deadline of 15 days from receipt of such notice.
4. The gross income of companies referred to in para. 1 generated from service provision, which shall necessarily be collected by wire transfer, shall be calculated by adding on a profit margin to all manner of expenses and depreciation, less income tax (the cost-plus method). The profit margin applied by each company shall be computed by application of the criteria set out in the regulatory decision referred to in para 9 hereof and shall be confirmed by means of the decision referred to in para 2 having first been inspected by the Committee established by the Ministry and convened by decision of the same Minister. This Committee shall consist of a Counsellor or Deputy Commissioner of the State Legal Council serving with the Ministry of Finance & Economy acting as Chairman, and the heads of the Income Tax Directorate and the Foreign Capital Directorate of the same Ministry as well as one certified auditor, acting as members. The aforementioned profit margin shall be re-examined every five years or earlier where market conditions alter significantly.
5. In order to determine the profit margin, which may not be less than 5%, specific regard shall be had to the type of services provided, the area of business activity and the OECD Guidelines on intragroup charges.
6. In order to calculate the taxable income of the company, all expenses on which the profit margin is calculated shall be deducted from the gross income where supported by tax records which meet the conditions laid down in the Hellenic Accounting Books and Records Code.
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7. If for any reason the income of a company, presented in its books, is greater than the income computed using the method cited in para. 4, regard shall be had to book income.
8. All public services and authorities as well as private individuals are obliged to provide the Ministry of Finance & Economy’s Foreign Capital Directorate with all information requested and all possible assistance to ensure the problem-free implementation of this law.
9. A decision of the Minister of Finance & Economy shall be issued: a) laying down the particulars which applications should contain and the relevant supporting documents for inclusion of companies within the provisions hereof, b) specifically outlining the criteria cited in para. 4 hereof, c) designating the bodies and inspection procedure for companies as well as the grounds for revoking licences, and d) setting out the procedure and necessary supporting documents for the return of guarantee letters provided for by this law before replacement as well as all other modalities necessary for implementation of this law.
10. A similar decision may be issued laying down other coordinating or auxiliary services, apart from those cited in para. 1 hereof, which companies covered by this law may provide.
11. Greek companies may also be covered by the provisions of this law upon request, where they exclusively provide the services cited in para. 1 hereof at their branches abroad or at companies affiliated with them which are not established in Greece.
12. As of 1 January 2006 all regulatory or individual administrative decisions which have been issued in implementation of Law 89/1967 shall be repealed.

Real estate coperation

Sale & Leaseback /
Lease & Leaseback Projects
Hellenic
Public Real Estate
Corporation
Sales & Leaseback 01
HPREC, the Hellenic Republic’s Asset Manager is planning a program of Sale and Lease
Leaseback transactions as part of the implementation of an ambitious 2.2-billion Euro
program for the Accommodation for State Agencies throughout Greece.
Highlights of Sale and Lease Leaseback Transactions in Greece:
ñ Regulating Law Proposed by HPREC, under Governmental Review
ñ Implementation with the support of HPREC and under the supervision of the Ministry of Economy and Finance
ñ Invitation to International Property Investors to participate
HPREC & The Accommodation Program for State Agencies:
ñ Comprised of approximately 240 projects throughout Greece.
ñ Valued at 2.2 billion Euro
ñ HPREC has already engaged Financial and Legal Advisors
ñ Technical advisors will be engaged as required
Building of the General Secretariat for Trade
Sales & Leaseback 02
Sale & Leaseback or Lease & Leaseback Project Portfolio – Current Status
With the support of the Financial Advisor, HPREC is investigating Sale & Leaseback or Lease & Leaseback
Transactions aiming at the development of market depth and the enhancement of the attractiveness of such
schemes in Greece. As soon as the proposed legal framework for transactions of this type is finalized and approved,
a program will be initiated that is expected to include:
ñ Building of the General Secretariat for Trade
ñ Ministry of Transportation
ñ General Secretariats for Communication and Information
ñ HQs of the Ministries of Tourism & Culture
ñ Tax Offices
ñ Police Stations
ñ Custom Houses
ñ Ministry of Merchant Marine
ñ Ministry of Foreign Affairs
ñ Embassies
HQ of the Ministries of Tourism & Culture
Sales & Leaseback 03
Parties that might be interested in participating include:
ñ Property Investors
ñ Property Developers
ñ Financial Institutions
Highlights of the Draft Law:
ñ Sets legal framework for Sale & Leaseback or Lease & Leaseback transactions
ñ Allows the State to commit to long-term lease agreements
ñ Allows combination of agreements with building improvements or construction
Parties that might be interested in participating include:
ñ Property Investors
ñ Property Developers
ñ Financial Institutions
Highlights of the Draft Law:
ñ Sets legal framework for Sale & Leaseback or Lease & Leaseback transactions
ñ Allows the State to commit to long-term lease agreements
ñ Allows combination of agreements with building improvements or construction
General Secretariats for Communication and Information
Sales & Leaseback 04
Ministry of Merchant Marine
HPREC
HPREC was incorporated in 1979 and is a 100% state – owned enterprise supervised by the Ministry of National
Economy. The purpose of HPREC is to manage the real estate portfolio of the Greek State with the main objective
of maximising its value and to meet the accommodation needs and requirements of the Greek Public Sector. For
the implementation of the Accommodation Programme the HPREC will act as awarding authority.
To assist with the Accommodation Program, and following an international competition, HPEC appointed the
consortium of Bayerische Hypo – und Vereinsbank AG, Emporiki Bank of Greece S.A., Lambert Smith Hampton
(Hellas) S.A. as financial advisor for the implementation of the State Agencies Accommodation Program.
Sales & Leaseback 05
HPREC
Mr. Stelios Hatzidakis
158A Alexandras Ave.,
Athens, 114 71 Greece
Tel: +30 210 6459663
+30 210 6405168
Fax:+30 210 6405108
Email: ked-ath@ked.gr
Financial Advisor
Mr. Yannis Perrotis
Lambert Smith Hampton (Hellas) SA
4, Sekeri Street
106 74 Athens, Greece
Tel: +30 210 3603667
Fax:+30 210 3604571
Email: info@lsh.gr
More information regarding
Sale & Leaseback / Lease & Leaseback Projects in Greece and HPREC can be found at
http://www.ked.gr
http://www.sdit.mnec.gr/en
Contact – Links
For more information regarding HPREC’s
Sale & Leaseback / Lease & Leaseback Projects please contact:
Sales & Leaseback 06