THE LEGAL FRAME OF BUYING PROPERTY ON GREECE

A. Notary Public Transfer deed
1. The first thing we ought to bear in mind before purchasing any property in Greece is that the purchase is concluded only by signing a notarial deed, which is a public document drawn up, signed and ascertained by a Notary Public. The Notary Public functions as a public servant, he comes within the jurisdiction of the Ministry of Justice and refers to the Public Prosecutor Authorities.

As a public document the notarial deed reassures the accuracy and validity of the agreement between the contracting parties.

2. The Greek law forbids the purchase of any property by signing a private document and, in case such thing occurs, the purchase is null and void.

Usually, the choice and appointment of the notary public is the purchaser right, since he bears the notary fees. The law does not foresee the latter and since it is not obligatory it is a matter of agreement between the contracting parties.

However the general rule that has prevailed concerning the notarial deed is that the purchaser owes to pay for the notary fees.

The work of the notary public is of great importance given that the deed safeguards and guarantees the vested rights of both contracting parties and is the legal title of ownership.

3. As far as the notary fees are concerned, these vary depending on the price of the purchase that will be set to the contract.

In any case, a percentage of 1,2%, more or less, is charged to the amount written on the contract. In addition, extra money will be paid to the notary on behalf of third parties (Greek Fund rights e.t.c) and for the notarys rights arising from the total number of pages of the contract and from the number of certified copies that will be issued.

Apart from the above charges, a percentage of approximately 0,5%, estimated to the price of the purchase written to the contract will be demanded by the Registry of Mortgages for the conveyance of the title.

B. Land Registry National Cadastre

1. The Land Registry system has only recently been launched in Greece. Law 2308/95 (last amended by Law 3212/2003) introduced the National Land Registry (National Cadastre), which gradually replaces the existing Registries of Mortgages. For the time being, Land Registries cover a minor part of the country and it worth saying that as far as the islands of Rhodes and Kos are concerned there is an operative Land Registry system, which dates back to the period of the Italian occupation.

2. The notarial deed by which is attested the purchase of any property is enregistered to the competent Registry of Mortgages and by that time the purchaser obtains full right of ownership.

C. Appointment of a lawyer

1. The most important person during the whole process of property purchase is the lawyer, especially the purchaser lawyer, whose contribution to the drawing of the deed is decisive since he is the one who protects and secures his clients interests.

We should point out a peculiarity of the Greek Law, which imposes as obligatory the lawyer presence during the conclusion of a property transfer if the value of the transaction exceeds the amount of 29,347 € for assets located in the area of Athens / Piraeus, or the amount of 11,739 € for all other parts of Greece. The obligatory presence of a lawyer means that not only he will be present during the conclusion of the contract, but that he will sign the document himself as well.

2. The Greek Law does not impose a maximum limitation concerning the lawyer’s fees for any property transaction and these shall be agreed by mutual consent (between the lawyer and the purchaser).

On the contrary, the law defines the following minimum amounts of remuneration for any property transaction, below which it is forbidden to agree on any fee:

a) For contract value (purchase price) up to 44,020€ the minimum fee is 1%.

b) For contract value (purchase price) from 44,020 up to 1,467,351€ the minimum fee is 0.5%.

c) For contract value (purchase price) from 1,467,351 up to 2,934,702 € the minimum fee is 0.4%.

d) For contract value (purchase price) from 2,934,702 up to 5,869,405 € the minimum fee is 0.3%.

e) For contract value (purchase price) from 5,869,405 up to 14,673,514 € the minimum fee is 0.2%.

f) For contract value (purchase price) from 14,673,514 up to 29,347,028 € the minimum fee is 0.1%.

g) For contract value (purchase price) from 29,347,028 up to 58,694,057 € the minimum fee is 0.05%

h) For any amount exceeding the 58,694,057 € the minimum fee is 0.01%

The aforementioned minimum fees must be paid prior to the signature of the contract at the relevant Bar Association. Part of the fee is retained by the Bar Association (Athenian Bar Association retains 35% of the fee) and the rest of the amount is attributed to the lawyer.

D. Taxation

1. Every property purchase in Greece is subject to taxation. The tax is calculated on the price of the purchase written to the contract and is obligatory paid by the purchaser prior to the signature of the notarial deed.

According to the Greek taxation law the tax is calculated taking into consideration the following factors: a percentage of 9% is calculated to the part of the price up to 15.000 € and a percentage of 11% is calculated to the part of the price exceeding the amount of 15.000 € In some areas of the country (usually out of the cities) the aforementioned factors are reduced to 7% and 9% respectively. To the amount of the tax (not to the amount of the purchasing price) an additional public tax equal to 3% is added.

2. The acquisition of property was until now exempted from Value Added Tax (VAT). Regarding the acquisition of new buildings, the planning permission of which has been issued after the 1^st of January 2006, the acquisition will be subject to VAT (the percentage comes up to 19%). In that case, the property purchase tax will be replaced by VAT.

3. In order to buy property in Greece and deal with the Greek Fiscal Authorities it is necessary to have a tax registration number, which functions as a tax identity for each person and never changes. The Inland Revenue of Foreign residents is the competent authority to issue the tax registration number and this procedure may be held by a third person (including the lawyer of the purchaser), as long as he holds a simple authorization and a copy of the passport of the interested person.

4. Except from the tax registration number and the payment of the purchase tax or the VAT the purchaser does not have any other condition to fulfill prior to the signature of the deed nor has to follow any other procedure.

On the contrary, the vendor, in order to be able to sell his property, has to acquire a variety of certifications (such as certification from the competent Tax Office that he incurs no fiscal debts, certification that he does not owe any amount concerning public or municipal taxes or fees concerning the property to be sold etc). The vendor is obliged to issue all the documents prior to the conclusion of the contract and submit them to the public notary, who is responsible for checking them and also obliged to deny the signature of the contract in case one of these certificates is missing or is incorrect.

5. Each contracting party can give authority of representation to another person, to the lawyer as well, by signing a Power of Attorney either before a Greek Notary Public or, when abroad, before a consular official. Proxies issued for property transactions must be specific and concern the concrete property purchase.