The purchase of real estate is a process that requires careful handling on the part of the buyer in order to avoid unpleasant consequences.
The assistance of a lawyer specialized in real estate law, who will anticipate and identify all potential risks involved in the purchase of a property on behalf of their client, is essential.
Key points a prospective property buyer should pay attention to are the following:
- Selection of the Property and Payment of a Deposit
At the stage of selecting a property for purchase, usually with the mediation of a real estate agent, the buyer is often asked to pay a certain amount (usually a small one) as a deposit in order for the property to be withdrawn from the market and “reserved” for them. Already at this initial stage, the buyer should seek the assistance of a lawyer of their choice and refrain from paying any amount before receiving guidance from their legal counsel. In all cases, it is recommended that no deposit be paid before the buyer’s lawyer carries out a legal due diligence review of the property at the competent Land Registry and/or Cadastral Office.
In any event, a deposit should always be paid only after the signing of a relevant private agreement between the parties (seller and buyer), in which the property to be purchased is fully and thoroughly described, the purchase price is specified, the method of payment is defined, the deadline for signing the final deed of transfer is set, and any special agreements between the parties are detailed (e.g. the need for construction works, the fate of the deposit in case one of the parties withdraws either without cause or for a serious reason, etc.). Buyers are strongly advised to avoid signing standardized private agreements provided by real estate agencies and instead request that such an agreement—given its importance—be drafted by their own lawyer.
At this point, it should be emphasized that the signing of a private agreement to secure the deposit does not fully protect the buyer against the possibility that the seller may sell the property to a third party. In practice, this means that if the seller, despite having signed the private agreement, ultimately chooses to sell the property to a third party instead of the buyer, this cannot be legally prevented; the buyer merely acquires the right to have the deposit returned. In practice, it is usually agreed that in such a case the deposit will be returned double, thus acquiring the character of earnest money (“arravon”/down payment).
In order for the buyer to ensure that the seller is legally bound to sell the property to them and to be able to proceed with the purchase even without the seller’s cooperation (provided that the full purchase price is paid), the agreement for the sale of the property must take the form of a notarized preliminary agreement.
- Legal Due Diligence of the Property
The legal due diligence stage is perhaps the most crucial part of the process, as it prevents the buyer from facing unpleasant situations and ensures that the property being purchased does not present legal issues. For this reason, the legal review of the property should be entrusted to a lawyer specialized in real estate law.
During the legal due diligence, the lawyer examines the legality and validity of the title deeds for at least the past twenty (20) years (the period relevant for extraordinary acquisitive prescription). This includes verifying whether the seller’s title deeds and those of their legal predecessors have been properly registered, whether they are subject to any conditions, whether the purchase price has been fully paid, etc.
Furthermore, the lawyer checks for the existence of any encumbrances on the property (such as mortgages or prenotations of mortgage), as well as any servitudes (rights of way, habitation, usufruct, etc.) burdening the property. The lawyer also examines any existing construction (contractor) agreement, the deed establishing horizontal ownership, as well as the existence of any building regulations, amendments thereto, and agreed uses of the individual units contained therein.
This legal review takes place at the competent Land Registry and, where applicable, at the competent Cadastral Office if the property is located in an area where the Hellenic Cadastre operates.
III. Procedure Until the Signing of the Final Sale Deed
Once the legal due diligence of the property has been successfully completed and the issue of the deposit has been settled, the buyer must indicate to the seller the notary public of their choice, who will undertake the drafting of the sale deed and the handling of all necessary formalities, always with the assistance of the seller’s authorized lawyer.
In this context, the notary public will request that the parties—primarily the seller—submit a series of documents necessary for the execution of the sale deed (such as a certificate from an engineer confirming the absence of illegal constructions, a municipal property tax certificate (TAP), tax clearance certificate, cadastral diagram extract, etc.). Once the notary ensures that all required documents are available and verifies their accuracy and completeness, they must prepare the property transfer tax declaration, which is submitted to the tax authorities along with a calculation sheet of the property’s objective (tax) value.
The property transfer tax amounts to 3% of the purchase price or the higher objective value of the property, if applicable, and must be paid in full by the buyer prior to the signing of the final deed. Proof of payment must be submitted and attached to the sale deed.
After completion of the above bureaucratic procedures, the final sale deed is signed before the notary public. The deed must then be registered with the competent Land Registry or recorded with the competent Cadastral Office, where applicable. The cost of registration is borne entirely by the buyer. The registration of the deed constitutes the final step in completing the transaction and the definitive transfer of ownership of the property to the buyer.
- Particularities of the Property Purchase Process When the Buyer Is a Foreign National
Given the strong purchasing interest observed in recent years from foreign nationals (both EU citizens and third-country nationals) in acquiring real estate in Greece, mainly for investment purposes, it is appropriate to highlight certain points of particular importance for these categories of buyers.
First, it should be noted that the foreign buyer must arrange, through their authorized lawyer, for the issuance of a Greek tax identification number (AFM) and the appointment of a tax representative in Greece (usually their lawyer or an accountant). This procedure can be carried out either with the buyer’s personal presence at the competent tax office or through authorization granted to a third party.
If the foreign buyer does not wish or is unable to be present for the signing of the final sale deed, they may execute a power of attorney in favor of their lawyer (either before a Greek notary public or before the competent Greek consular authority in their country of residence). Under such power of attorney, the buyer’s lawyer may independently carry out all actions required for the execution of the final deed (signing tax declarations, executing the sale deed, etc.). In practice, this means that a person may purchase property in Greece without ever visiting the country, as all actions may be completed by an authorized lawyer under a power of attorney.
If, however, the final deed is signed by the buyer personally and the buyer is a third-country national (non-EU citizen), they must hold a valid entry visa of any type or a valid residence permit issued by the competent Greek authorities or by the authorities of another European country.
Finally, it is noted that if the buyer is a third-country national (non-EU citizen) and the purchase price exceeds EUR 250,000, they may apply for and obtain, following the signing and registration of the sale deed, a five-year residence permit (Golden Visa) for themselves and their family members (spouse or partner under a cohabitation agreement, children under 21 years of age, and parents).
