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Legal Expenses

1st August 2014 by admin

Expenses for the Buyer :

Full Structural Survey:

CreteBay recommends that all its buyers employ the services of a Greek civil engineer to carry out a full structural survey of the property that they are buying to ensure that the building they are purchasing has no structural instabilities which may give rise to problems in the future. It is advisable to include mention, in the initial contract written up by your lawyer, that the advancement of the sale is dependent on a clean structural survey being completed with no penalties for your withdrawal if problems should be discovered. The cost of such a full structural survey by a Greek civil engineer will be from Euro 300 and above, dependent on the size of the property and the complexities of its structure.

Transfer Tax:

Property purchases in Greece are subject to taxation. It is obligatory for the purchase tax to be paid prior to signing of the contract. The amount of tax is calculated on the value of the property that is mentioned in the contract.

When it comes to buildings:

– If the Building Licence was issued before 01/01/06, then the tax is charged at 3.09% of the property value mentioned in the contract .

– If the Building Licence was issued on or after 01/01/06 and the seller is a developer / contractor, taxation of 23% of the purchase price will apply.

Municipality tax:

An amount equivalent to 3 % of the Transfer Tax is also to be paid to the local municipality.

Notary fee:

The notary fee is calculated in most cases at 1.6 %, including tax and VAT, of the property value mentioned in the contract.

This fee is decreased as the the amount of the purchase price is increased.

Land Registry fee:

Land registry fees include registrar’s rights, certificates, and stamp duty. They are calculated at 0.475-0,575 % of the property value mentioned in the contract, plus 23 % Value Added Tax (V.A.T.).

Legal fees:

The legal fee is a matter of agreement but usually it is 1% of the property price or a minimum of 1.500 Euro plus taxes.

The legal fee is also affected by the extent of the service provided by the lawyer and it is all upon agreement by mutual consent between the buyer and the lawyer.

Real Estate Agent’s Commission:

The buyer pays an estate agent’s fee to the estate agent, which fee has been mutually agreed between them.

 

Expenses for the Seller :

Inheritance Tax:

There may be Inheritance Tax to be paid on the property. Such taxes in Greece have 3 scales and are calculated on the objective or assessed value of the property, when necessary.

Capital Gains Tax:

The Capital Gains Tax only applies in cases where the price at which a property is sold is greater than the price at which it was acquired by the current owner.

It is calculated by the public notary and is equal to 15% of the difference between the price at which the seller acquired the property and the price at which he sells it.

The Capital Gains Tax however will be reduced by implementing a “reduction factor”, which is scaled inversely according to the time that the owner has been in possession of the property, i.e. the time that has elapsed between the year of acquisition and the year that the property is being sold.

There are reductions where the Capital Gains Tax resulting from the above calculations is less than or equal to 25,000 Euro and the current property owner owned the property for 5 or more years and during that time did not sell any other property in Greece. In such a case and over the duration of the time of ownership of the property, there will be Capital Gains Tax applied on a gradually reducing sliding scale, dependent on the number of years that the property has been in the owner’s possession. It is recommended that you consult your Greek or international tax advisor on the Capital Gains Tax implications of any sale.

Certificate to be issued by an civil engineer:

According to the 4178/2013 law, a Certificate by a civil engineer is required, stating that the property is in accordance with the relevant planning permission or other legal floor plans. In the case that arbitrary constructions have been executed or arbitrary uses have been installed, then it should be proven that they have been settled through proper applications to the Planning Department and any fees or fines, which may have been imposed on the property, have been paid.

Energy Performance Certificate:

In case that the purchase property is a building over 50 square metres, then an Energy Performance Certificate is required in order to proceed to the Purchase Contract. This Certificate is provided by a relevantly certified engineer.

Real Estate Agent’s Commission:

The seller pays an estate agent’s fee to the estate agent, which fee has been mutually agreed between them.