Buying a property in Greece may be the best decision you ever make. Stunning beaches and scenery, affordable housing, delicious cuisine, friendly locals… we could go on and on about why Greece is an excellent choice for a holiday home or forever home. But how do you buy property in Greece? We outline the property buying process in six simple steps.
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1. Obtain your AFM number
The ‘Arithmos Forologikou Mitroou’, or AFM, number is a fiscal number that is required for many everyday transactions, including buying property. To get your AFM number, simply head to your local Greek tax office (Eforia) with real versions and photocopies of your passport, birth certificate and marriage certificate (if applicable).
2. Build your professional team
Once you’ve got your AFM number, it is time to build a team of professionals to help guide you through the property buying process. You’ll need an estate agent, lawyer, currency specialist, and a mortgage/financial adviser.
An independent property lawyer should be first on your priority list. They will be able to do due diligence on any properties you are interested in and will ensure you do not fall foul of pitfalls such as having to pay for any leftover charges from the previous owner.
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3. Mortgage or cash?
Not sure if you have the funds to purchase a holiday home in Greece? The good news is that there are several options, so you may find it is more attainable than you thought.
If you have a property in the UK and are over the age of 55, you may be able to take out a ‘lifetime mortgage’. A lifetime mortgage is a type of equity release that allows you to keep your UK property while obtaining a tax-free sum of cash. In other words, you are borrowing a percentage of the value of your home while remaining the full owner. You can release equity in one lump sum or in smaller amounts.
Another option is to sell your UK buy-to-let portfolio. Since the introduction of higher stamp duty for second-home owners, stricter laws for landlords, it may make financial sense to sell up and use the cash to buy a holiday home abroad.
Lastly, you have the option of taking out a Greek mortgage. In general, Greek banks are quite reluctant to hand out mortgages, even to Greek citizens, with over 75% of all real estate purchases in the country made using cash.
Nonetheless, it is still very much possible to get a Greek mortgage – you just need to meet the criteria. These include being at least 25 years old, paying off the mortgage by age 58 and having a Greek bank account. The minimum loan is relatively low, starting at €10,000, while the maximum will depend on your income (it rarely exceeds 80%). Mortgage rates vary from 3.5% to 7.5% and terms range from six to 30 years. Alternatively, you could look to a private lender, but be aware interest rates will be far higher.
4. Find and buy your perfect Greek home
Once you’ve decided how you will pay for a property, the fun begins! Head out on a viewing trip, either independently or with an estate agent, and find your perfect Greek home.
You’ll then need to make an offer on the property you are interested in. If this is accepted by the seller, your lawyer will help to draw up an initial purchase agreement. Both you and the seller will sign it and you will likely pay a 10% deposit to reserve the property.
Your lawyer will then check that there are no existing charges or taxes on the property – this is known as a title search. Once you are given the ‘okay’ from your lawyer, you will settle the remaining balance and government duties. At this point, you will need the services of a notary public (note that this is a separate service to a lawyer) to draw up the contract deed. Both the buyer and seller must sign this in the presence of the notary public.
5. Protect your money against fluctuating exchange rates
The whole process between making an offer on a property and making the final payment can take a month or two. During this time, the pound to euro exchange rate can vary significantly, potentially making the property cost more in pounds than you had first anticipated. For example, in the last 12 months, a €200,000 property has varied in price by around £14,000 due to fluctuating exchange rates.
Luckily, this can be easily resolved by using the services of a currency exchange provider, such as Smart Currency Exchange. They can discuss the best options for you, such as locking in an attractive exchange rate for up to 12 months, meaning you won’t have to worry about the pound potentially weakening against the euro and your property costing more than you expect.
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6. Research your visa options
Depending on how many days of the year you plan on spending in your new Greek home, you may or may not need a visa.
Since Brexit, non-EU citizens will require a visa to spend more than 90 days within a rolling 180-day period in Greece. If you plan on spending less time than this, such as the odd holiday here and there, then you will not need a visa.
Greece offers several visa options for retirees, workers and students. The most common is known as Independent financial means (National D visa) which requires you to be able to financially support yourself without relying on the state. This is a popular option with retirees who can fund their lifestyle with an overseas pension. Another option is the Golden Visa, which grants residency in exchange for a property purchase of at least €250,000. Find out more about Greek visas here.