Published August 12, 2022 13:18 PM
Real estate property transfer requires specific procedures to be carried out with the assistance of various professionals (lawyer, notary, accountant, engineer, etc.) in order to gather all necessary legal documents and technical survey of the property.
Priority is given to legal and technical property investigation in order to find any potential legal or technical concerns and fix them before the property transfer. Therefore, it is thought that the support of the engineer and lawyer is crucial.
A legal research refers to the deed search of the property, the burdens, claims, and liabilities of any kind, as well as the resolution of any legal issue, whereas an engineer’s research refers to checking the property’s topographic plan, the conformity of the buildings to the issued building license, and their compliance with the town planning regulations.
Property Transfer Procedure And Its Obligation
The seller agrees to fulfill the responsibility of giving the notary drafting the act of sale the required paperwork, as previously mentioned. Next comes the buyer’s payment of the transfer tax. As soon as the contractual parties sign the act of sale, the process is finished. When the purchase agreement is recorded at the appropriate land registry or cadastral office, the ownership of the property is officially transferred to the new owner. The following is a brief list of the property transfer procedure.
- Primary Checking of Supporting Documents The seller must help the buyer during the legal and technical survey stage by supplying all necessary documents to expedite the completion of the searches required before the relevant authorities (land registry, urban planning department etc.).
It’s possible that the seller will bring up the subject of a deposit to be paid upfront when a preliminary agreement is signed if legal or technical concerns develop during this phase that need to be resolved before the property transfer and the seller needs to pay for applicable costs or expenses.
- Preliminary Agreement (Optional) If the majority of the initial inspections show that the property is as described and can be bought safely, the buyer may need some time to gather the finances required to complete the acquisition, and/or the seller may need some time before he can sell the property for a variety of reasons. This is made possible by the use of a “preliminary contract” in the Greek real estate buying process. In actuality, this is a contract-to-contract and typically provides that the property will have passed from the seller to the buyer before a specified future date.
The preliminary agreement is a notarial act that binds both parties to proceed with the transaction, i.e., for the seller to transfer ownership of the property to the buyer and the buyer to pay the agreed-upon amount. It entails all conditions that have been set forth as prerequisites for the completion of the sale and the execution of the final act of sale.
It connects the act of sale to the performance of particular requirements or conditions by the contracting parties, or to a specific time frame after which the act should be executed. Penalties apply if either team fails to finish. Among the rights granted to the parties, the buyer essentially reserves the right to either ask for a duplicate refund of the deposit if the seller doesn’t keep his end of the bargain or, if the seller opts not to move forward with the property transfer, the right to compel him to do so through the courts.
On the other hand, if the buyer withdraws from the transaction and elects not to proceed with the final contract, the seller is entitled to keep the forfeited deposit. The preliminary agreement’s cost is often borne by the buyer because it is included in the total notary fee for the sale act. The contract, which is signed in front of a notary, may also contain additional clauses.
This agreement between the parties is not to be confused with the “deposit agreement,” which has a different function and is signed privately rather than in front of a notary (and sometimes the real estate agents). However, in order to prevent any problems in the future, it is best to avoid making any deposits until you have spoken with a legal counsel.
- Obligations of the Seller and the Buyer The seller is required to give the notary the papers listed above as necessary for the act of sale. The seller of the property also has the following legal responsibilities:
- to maintain the property until it is transferred to the buyer
- Dispatch the property
- Repair any flaws or shortcomings in the property.
- to cover specific expenses and taxes
- Representation If the buyer is unable to attend the signing of the preliminary agreement or the contract, he must execute a power of attorney designating a specific proxy to act on his behalf. Since these actions can be carried out by a lawyer thanks to a power of attorney, in practice this implies that it is possible for someone to buy real estate in Greece without ever having to travel there. However, if the buyer signs the final contract himself and he is a citizen of a third country (outside the EU), he must be in possession of a valid visa of any kind or have a reliable residency permission issued by the relevant Greek authorities or the relevant authorities of another European country.
- Related Expenses There are a number of charges involved in the process whether you are buying or selling a property in Greece. Many of them you will anticipate if you have gone through the procedure in another nation, but some you will learn about in this article. The principal costs will be covered, and the buyer is typically liable (unless otherwise indicated).
However, it is important to keep in mind that the freedom to contract is a fundamental principle of Greek law, and that, with a few notable exceptions, parties are free to assume or forfeit any obligations they see fit with regard to paying the fees and taxes associated with the transfer of property in Greece.
Unless otherwise agreed, the buyer is obligated to cover the costs associated with drafting the deeds of transfer as well as those required to actually transfer the property, such as notary fees and land registry/Cadastre registration fees. The vendor is responsible for paying any income taxes associated with the amount earned from the acquisition of the property.
- Signing of Contract The title by which the property passes is known as the “final deed” in Greek, and the purchaser’s new title is recorded in the regional real estate register (land registry or Cadastre). The contract must be signed in front of a public notary for it to be enforceable.
- Finalization of Property Transfer The buyer will be responsible for submitting a certified copy of the contract to the local land registry or cadastral office once the contract has been signed in order to obtain the registration certificate and formally become the property owner.
- Cancellation of Purchase Agreement In order to protect the parties to the contract, the grounds for contract cancellation are typically listed in the contract itself. However, the principal grounds for canceling a contract for the purchase of real estate would be as follows:
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- noncompliance with contractual obligations
- the loss of the asset
- Unpaid debt (especially in case the price is agreed to paid in installments)
- Defects or unforeseen costs (related to the property)
Property Transfer Tax In Greece
This is a one-time cost. These expenses should be paid by the buyer.
- Lawyer Fee 1% plus VAT
- Notarial: 0.8% plus VAT
- Registration Fee 0.475% + VAT
- Property Tax 3.09% in
- Real estate services: 3% for homes under a million euros
- 2% for homes exceeding a million euros.
Greek law stipulates that real estate sales contracts must be in writing, be notarized, and follow a specific format. Without the ability to seek compensation for damages, agreements made in contravention of these conditions are void.
In Greece, a public notary’s roles and responsibilities are relatively constrained, but one of them is to verify that the parties understand their rights and obligations. Practically, this can only be achieved by having the parties read the contract’s terms before signing them in a language they both understand. The notary is typically approved by the parties at the seller’s suggestion.
To finalize the transaction, can be completed by the parties themselves, through their representatives, or both by signing a contract in Greece or at the Greek consulate.
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Disclaimer: This is simply meant to serve as a quick reference. Therefore, it is crucial to seek out the necessary professional guidance.
