Total Costs for Buyers

27/12/2022

The purchase of a property in Greece includes, in addition to its real value, additional costs related to payments of professionals involved in the process, taxes, fees and contributions.

Below are the costs that mainly involve the buyer:

• Property Transfer Taxes
• Notary fee
• Lawyer fee in case of representation
• Real Estate Broker Fee
• Remuneration of an engineer for technical inspection
• Transfer costs at the Land Registry Office or the corresponding National Cadastre

Property transfer taxes

In Greece, the purchases of properties are subtended in taxation. From 2013 onwards, the purchase and sale of real estate is subject to the following taxes:

• Purchase Tax (FMA) (3%)
• Value Added Tax (VAT) (24%)
• Capital gains tax (FYA) concerns the seller but is postponed until 31.12.2022.

Property purchase tax (FMA)

The specific purchase tax is calculated at 3% of the contract price or the objective value, depending on which value is higher. To the amount involved, is added another 3%, which is in favor of the respective municipal unit (OTA).

The buyer is entitled to an exemption from VAT for the purchase of a first residential home, under certain conditions, which can be seen below:

• For the purchase of a residence, a single/unmarried person is entitled to an exemption up to the amount of 200,000 euros.
• For the purchase of a residence, a single/unmarried person who has at least 67% disability, is entitled to an exemption up to the amount of 250,000 euros.
• For the purchase of a residence, a married person is entitled to an exemption up to the amount of 250,000 euros.
• For the purchase of a residence, a married person who has at least 67% disability, is entitled to an exemption up to the amount of 270,000 euros.
• The exemption is increased by 25,000 euros for each of the first two children and by 30,000 euros for each of the following.
• For the purchase of a plot of land, a single/unmarried person is entitled to an exemption up to the amount of 50,000 euros.
• For the purchase of a plot of land, a married person is entitled to an exemption up to the amount of 100,000 euros.
• The exemption is increased by 10,000 euros for each of the first two children and by 15,000 euros for each of the following.

In case of termination of any company (OE, EE, IKE, LTD), distribution of real estate between the circumstances or transfer of the company's real estate to the corporate share of its members, the real estate buying tax is reduced to 0.75%.

In case of conflation of Cooperatives and SA, forced expropriation for public benefit, merger of plots or exchange of real estate of equal value, the FMA is reduced to 1/2.

Value-added tax (VAT)

VAT, which is 24%, is levied on newly built properties sold mainly by construction companies or by individuals who have repeated construction activity.

Capital gains tax

If you hold a property for more than a year, any profits from the sale are taxed at the long-term capital gains rate. This tax concerns the seller but is postponed until 31.12.2022. Se more for sellers here.

Notary fees

The notary fee is usually on the buyer’s position, it is freely negotiable, and you depend on the overall agreement. In general, however, it is as follows:

• For a property value up to the amount of €120,000, the notary's fee starts from 0.80%.
• For a property value that ranges between €120,000 to €380.000, the notary's fee is set at 0.7%.
• For a property value that ranges between €380,000 - €2.000.000, the notary's fee is set at 0.65%.
• For higher value contracts, the percentage is gradually reduced in the upper rungs, reaching up to 0.10%. 
• For contracts exceeding the value of 20,000,000 euros, a fee less than 0.10% may be agreed upon, by written agreement between the notary and the buyer.

An additional cost of 4-5 euros per additional sheet of the contract should be calculated in the amounts involved. Finally, the fees of notaries are subject to VAT regime, which for the year 2020 is 24%.

Lawyer fee in case of representation

The attorney’s representation since 1.1.2014 is optional for all the included parties, while is free to negotiate and usually ranges as follows:

• For a property value of up to €44.000, the lawyer's fee starts from 1%.
• For property value from €44.000 - €1.407.000, the fee is set at 0.5%.
• For a property value over €1.407.000, the fee is set at 0.4%.

The legal inspection of the property is charged additionally and is usually 100 - €150, but it can reach even more depending on how complicated the property is, mortgage’s distance or the Cadastral’s office, etc.

Based on our experience, we believe that the effective involvement of a lawyer in real estate transfers, especially for the buyer's position, can prevent substantial costs, while the conduct of these transactions by sole contractors without legal guidance can be destructive.

Real estate broker fee

The broker's fee is for the indication of the property and not any negotiation, it is free and negotiable and is not subject to legal thresholds. In practice, the general rule is that for buying and selling properties, the parties pay the broker 2% each.

Many real estate agencies, especially in recent years, follow the practice that considers that the fee should be paid by the seller - owner. In this case, the seller usually pays more than 2%.

Remuneration of an engineer for technical inspection

The technical inspection by an engineer is not mandatory, and his fee is negotiable and relational to the property and the public services he must visit. Because from 2011 the seller of the property is obliged to present to the notary, an engineering certificate for the urban situation in which a property is established, which now includes the certificate of the forest department, apparently this protects the buyer.

However, if the buyer wants to be sure of the intended use or to be informed about the quality of construction, etc., it is recommended in any case to conduct a proper technical inspection by a civil engineer, who identifies and prevents major costs.

"Especially for commercial properties and plots intended for corresponding use, in our opinion, the technical inspection is necessary."

• Additionally, with the visit to the property and the on-site inspection, the engineer conducts a series of inspections in respective services such as:
  Control for land uses, permitted and prohibited, such as any characterization of the property as forest or reforestable area, habitat, coastal, archaeological interest, military zone, etc.
• Control for the town planning or the municipality for the file’s completeness, and if there are any pending issues of the property for any possible contributions in land and money.
• Expropriation for public benefit purpose, execution of road or another project.

In case of a plot, inspection for the building conditions such as perfection, buildability, possible suspension of building permits, restrictions on the height of the building in case of a nearby airport, restrictions in case of a flood, seashore, etc.

Transfer costs to the land registry

The transfer cost of the purchase contract is calculated on the price of the contract or the objective value, depending on which value is higher, and is as follows:

In case the contract is transferred to a mortgage office in the area where the property belongs requires the payment of 0.475% without limit, present VAT 24%.

In case the contract is transferred to a Cadastral Office that maintains the property, it is not subject to VAT and requires the payment of 0.5% also without limit.

We believe at this point that we have presented a detailed picture of what a buyer must pay for the transfer of a property. But, due to the frequent legislation’s changes, the prospective buyer before any action should update the data with all those involved so as not to be surprised, and to visit relevant websites for cross-checking the data.