buying a property

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pdepp
Posts: 2
Joined: Sat Feb 03, 2018 7:25 pm

buying a property

Postby pdepp » Wed Feb 07, 2018 12:16 am

Hello
I am in the process of buying a property and have a few questions. I have looked at the past postings on this subject but these are from 2 years ago and maybe now the law is clarified? I am UK based.
I have found a place, agreed a price, found a lawyer, signed a power of attorney (for the tax number (AFM) and to open bank account).
However, the seller is also non=Greek, German, and is asking that the proceeds are paid direct to her bank account in Germany. My lawyer says this is ok, but I am wary given previous postings saying that you need a 'pink slip' for the E9 form otherwise might have to pay tax on the purchase price (as the greek authorities do not see the money flow through the Greek bank account and therefore there is no pink slip).
I can of course provide proof of funds, just worried that after the purchase I might be charged for more tax??
Any guidance appreciated

Kilkis
Posts: 9086
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: buying a property

Postby Kilkis » Wed Feb 07, 2018 8:20 am

Ask a good accountant. Don't rely on a lawyer when it comes to tax issues.

Warwick

GlennB
Posts: 39
Joined: Thu May 04, 2017 9:38 pm

Re: buying a property

Postby GlennB » Wed Feb 07, 2018 10:48 am

You should also inquire about the legality of the house. There are many properties around that are illegal owing to inadequate (or zero) planning permissions for extensions, conversions etc. Ours is such a case where the big, open basement was turned into bedrooms without a proper permission for the change of use, even though all the work took place within the original footprint of the building. Legalising such a property retrospectively can be expensive and time-consuming.

So, yes, get a lawyer. Some information on the new(ish) law can be found here:

https://www.ksirouni.com/property-illegal-greece

Kilkis
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Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: buying a property

Postby Kilkis » Wed Feb 07, 2018 11:16 am

GlennB wrote:...There are many properties around that are illegal owing to inadequate (or zero) planning permissions for extensions, conversions etc...


I think "many" is a gross understatement. The engineer who inspected my property estimated 99 % of all properties in Greece were illegal in some way. A work colleague wanted to buy an apartment in Thessaloniki, Greece's second city, but it had to be completely legal, i.e. satisfy all building regulations not just be legalised using the procedure described in GlennB's link. He could not find a single one. Having lived in Greece for ten years before buying my current property I was fully aware of the problems of illegal building and pushed my developer at every step to ensure it was completely legal. It still ended up being illegal.

Warwick

PS Make sure that if you intend to make any changes you do so before going through a legalisation process. You can only do it once.

filippos
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Location: Kalyves
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Re: buying a property

Postby filippos » Wed Feb 07, 2018 12:16 pm

Can the house be sold without the legalisation document(s)?

Kilkis
Posts: 9086
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: buying a property

Postby Kilkis » Wed Feb 07, 2018 12:33 pm

From the link posted by GlennB:

    According to the Greek Law, you cannot sell, transfer, rent or mortgage property that is illegal in structure or use. If you own land and/or buildings and want to proceed in any legal transaction, you must submit a “Declaration of Legal Property Status” signed by a certified architect confirming that the property is legal and in compliance with the legal building license issued. ...

    ...False declarations by all parties involved, e.g.; architects, notaries and owners, will be faced with legal charges.

Warwick

pdepp
Posts: 2
Joined: Sat Feb 03, 2018 7:25 pm

Re: buying a property

Postby pdepp » Wed Feb 07, 2018 1:03 pm

Thank you for the replies.
Yes, legalization is being checked by the lawyer, and there is one issue with an annex which is now being legalised.

My questions really relate to anyone who has confirmation that there are no consequences if you buy the property from a foreigner and the monies are paid overseas. It is a German selling, I am from UK.

Previous threads on this forum indicate some uncertainty about the issue, for example will I then have to pay income tax on the purchase price (worst case scenario) as there was no pink slip issued.

My lawyer is clear that this is not the case and that the law was changed in 2015 and is now common for foreigners buying from foreigners.

Any thoughts appreciated, also to understand the tax return which has to be filed every year as an owner of property (with an E9?) although I guess this is mostly blank in a simple case.

Thanks!

Kilkis
Posts: 9086
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: buying a property

Postby Kilkis » Wed Feb 07, 2018 2:24 pm

Your lawyer is probably correct but it doesn't do any harm to double check with an accountant. You will probably need one anyway to file tax returns unless your Greek is fluent and able to cope with some arcane terminology.

All income tax returns are now submitted online with an online version of what used to be called an E1 form. An online equivalent of the E9 form is used to notify any changes in property ownership. An E1 should be submitted every year even if it is a null return. I think an E9 is only used if there is a change of some sort in the property.

Warwick

bobscott
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Joined: Wed Aug 05, 2009 5:36 pm
Location: Kokkino Horio

Re: buying a property

Postby bobscott » Wed Feb 07, 2018 3:50 pm

Our experience doesn't quite match your situation but if it's of any help, we (English) who have lived here for 20 years, recently sold our house to an American and his German partner, living and working in Germany.

The purchase price went from the buyer's bank in Germany to my account with Currency Fair who converted most of it from euros to sterling and sent the money on immediately to my UK bank. At my request, a small-ish residue was kept in euros and sent by CF immediately to my Greek bank account. All for the grand total charge of €6 (plus another €3 charged by my Greek bank for the privilege of boosting their cash-flow for 48 hours!).

For the record, I do have a Greek tax number and file an annual tax return through my accountant, but am one of those often referred to on this forum who, being retired and having no income generated in Greece, continue to pay tax in the UK. There was no hitch at all. No tax to pay on the transaction either in the UK or in Greece. I am enjoying the new car I bought with the boost to my Greek bank account!

But as the pundits have already said, tell your lawyer and your accountant what you want to do and make sure they agree. The accountant will want a copy of the sale agreement (provided through the lawyer) in order to change your 'circumstances for the tax authorities. Hope that helps a bit. Bob.
Yesterday today was tomorrow. Don't dilly dally!

Kilkis
Posts: 9086
Joined: Sat Apr 21, 2007 3:58 pm
Location: Near Chania

Re: buying a property

Postby Kilkis » Wed Feb 07, 2018 4:17 pm

In your situation the problem wouldn't be for you, the seller, Bob, so it doesn't really reassure Pdepp.

In earlier times the problem would have been for the couple who bought. They declare on their E9 that they have bought a property. They declare the amount paid as shown on the contract plus any taxes and lawyer's fees. The Greek tax man then says, "You have paid €X for a property in Greece but you haven't brought any Euro into Greece. Therefore you must have earned €X in Greece but not declared it and we want income tax on €X." That is certainly how it used to work and they would only accept pink slips for an account in the buyers name, preferably two independent accounts if the property is split 50:50, as proof. Pdepp's lawyer is telling him that this is no longer a problem. He is looking for experience from somebody who has bought in this way not sold.

Warwick

GlennB
Posts: 39
Joined: Thu May 04, 2017 9:38 pm

Re: buying a property

Postby GlennB » Wed Feb 07, 2018 11:48 pm

pdepp wrote:Thank you for the replies.
Yes, legalization is being checked by the lawyer, and there is one issue with an annex which is now being legalised.


My apologies if this comment seems like nagging or interfering, but I wouldn't pay a single cent for a house here until I had the full certificate of legality physically in my hands and verified by a lawyer. We have spent 5 years legalising our place only to find, when we thought it was done, that the town planning committee decided that our apothiki/fourno combination out in the yard needed a 'traditional' roof. Some months and €4k later we still don't know if we're legal or if they're going to bleed us a little more.


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