Transferring proceeds of villa sale

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Danny
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Re: Transferring proceeds of villa sale

Postby Danny » Sat Aug 08, 2015 5:42 am

I know of one transaction where it was alleged that monies for a house sale had been paid outside Greece via an escrow account but the contract was signed in Greece. I was told that the buyer was told by their lawyer that there were no tax implications because written in the contract it stated that the property had been exchanged. I don't know what legal /tax implications there are the way it was carried out but certainly it seemed the buyer wasn't concerned, apparently the new owners had spoken to two other lawyers, one in Athens and another in Chania and were told that there were no legal problems with what they were doing. I don't know if or how much money changed hands but knowing the house and it's position I would have put it in the half a million euro bracket. My first thoughts when hearing how they'd done this was that the original owners had simply transferred ownership of the property leaving out all details of anything financial in the contract.

filippos
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Re: Transferring proceeds of villa sale

Postby filippos » Sat Aug 08, 2015 3:24 pm

Kilkis wrote:..... It may be possible to apply to the body that is in charge of monitoring capital transfers to get permission to transfer the amount transferred into Greece out of Greece again since it is not depleting in any way money already on deposit in Greece.
Even if permission were granted one wonders how long it would take to obtain.

bobscott
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Re: Transferring proceeds of villa sale

Postby bobscott » Sat Aug 08, 2015 3:32 pm

filippos wrote:
Kilkis wrote:..... It may be possible to apply to the body that is in charge of monitoring capital transfers to get permission to transfer the amount transferred into Greece out of Greece again since it is not depleting in any way money already on deposit in Greece.
Even if permission were granted one wonders how long it would take to obtain.


Long enough to have a haircut whilst one waits, perhaps??????
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Brian
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Re: Transferring proceeds of villa sale

Postby Brian » Sun Aug 09, 2015 12:22 am

Thank you all for your helpful replies.
It looks like squeaky-bum time for my friend. His only hope appears to be a low objective price on the property.otherwise if the full amount money is lodged in his Greek bank account it may languish there for God knows how long.
One final query, the Cypriot hair-cut was on deposits over 100000euro. In that case (if this figure was applied to Greece) he would be ok? However as I said he will have to sit and wait until the Capitol Controls are eased to the extent of allowing amounts equal or greater than 100000 be transferred abroad.

Kilkis
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Re: Transferring proceeds of villa sale

Postby Kilkis » Sun Aug 09, 2015 8:21 am

Brian wrote:...His only hope appears to be a low objective price on the property.otherwise if the full amount money is lodged in his Greek bank account it may languish there for God knows how long.
One final query, the Cypriot hair-cut was on deposits over 100000euro. In that case (if this figure was applied to Greece) he would be ok? However as I said he will have to sit and wait until the Capitol Controls are eased to the extent of allowing amounts equal or greater than 100000 be transferred abroad.


If he has last year's property tax bill* it contains the objective value of the property so he would at least know what it is. There is a row of five boxes towards the top left of the bill with the overall heading, ΣΤΟΙΧΕΙΑ ΕΚΚΑΘΑΡΙΣΗΣ ΕΝ.Φ.ΙΑ. The third box from the left with the heading, ΣΥΝΟΛΙΚΗ ΑΞΙΑ ΑΚΙΝΗΤΗΣ ΠΕΡΙΟΥΘΣΙΑΣ contains the objective value of the property.

The question of a haircut is a very open one. In theory there is a European wide law that protects the first €100,000 of all deposits. Also, in theory, I think that applies to each account with a different legal entity, i.e. a different bank. It is also true, however, that at the G20 meeting in Australia they slipped through an amendment to the rules governing bank deposits so that in the event of insolvency depositors are last in line. Previously I think they were second only to the tax authority. Now they are behind shareholders and bond holders. I'm not sure why they did this but they never do anything unless there is a reason. If it was me I would investigate with a knowledgeable accountant, and I stress the word knowledgeable because many aren't, 1) if it is possible to move the money out of Greece quickly if you can prove it has come into Greece for the purpose of property purchase, i.e. a copy of the buyers pink slip and the contract or 2) If I am correct that the deposit guarantee applies to each account. If the former is possible then get it out as quick as possible. If not and the latter is correct, open accounts with a number of different banks and split the deposit between them. At one time I had all my savings in the offshore branch of Northern Rock. To turn on Sky news one morning to find that the bank is effectively insolvent, it is undergoing a major bank run and you have no access at all to your account because they have shut down internet banking is quite a shock. It teaches you to split up any money you have between several banks.

Warwick

* I mean the full bill that shows the calculation. Mine was printed on an A4 sheet in landscape mode in very small type. There is another document that shows the payment schedule and the payment code which doesn't show the objective value. Some accountants only send out this second document.

YoMo2
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Re: Transferring proceeds of villa sale

Postby YoMo2 » Sun Aug 09, 2015 9:18 am

Kilkis wrote:......If he has last year's property tax bill* it contains the objective value of the property so he would at least know what it is. There is a row of five boxes towards the top left of the bill with the overall heading, ΣΤΟΙΧΕΙΑ ΕΚΚΑΘΑΡΙΣΗΣ ΕΝ.Φ.ΙΑ. The third box from the left with the heading, ΣΥΝΟΛΙΚΗ ΑΞΙΑ ΑΚΙΝΗΤΗΣ ΠΕΡΙΟΥΘΣΙΑΣ contains the objective value of the property.


Correct, but note that if you have more than one property, that box shows the total of the objective values of all properties. The far right-hand column in the table will give the objective value of each separate property. Exit pedantic mode.....

Andrew

Kilkis
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Re: Transferring proceeds of villa sale

Postby Kilkis » Sun Aug 09, 2015 9:29 am

Sorry, I hadn't thought about the possibility of multiple properties.

That is the far right column of the row that stretches across the middle of the bill and contains details used to calculate the property tax, not the far right column of the row I mentioned in my earlier post. It is headed ΑΞΙΑ ΑΚΙΝΗΤΟΥ.

Warwick

filippos
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Re: Transferring proceeds of villa sale

Postby filippos » Sun Aug 09, 2015 10:37 am

Kilkis wrote:they slipped through an amendment to the rules governing bank deposits so that in the event of insolvency depositors are last in line. Previously I think they were second only to the tax authority. Now they are behind shareholders and bond holders. I'm not sure why they did this but they never do anything unless there is a reason.
Perhaps because ...........

If depositors were second in line behind the tax office I suppose shareholders and bondholders I'd guess that the latter might be worried there might be little or nothing left for them. They're organised groups, good at lobbying and we depositors are a disorganised rabble of peasants.

Tim
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Re: Transferring proceeds of villa sale

Postby Tim » Sun Aug 09, 2015 4:21 pm

If he has last year's property tax bill* it contains the objective value of the property so he would at least know what it is.


Interesting. Is this the objective value that pertained the last time the property changed hands - i.e when the current owner purchased it - or is it the current objective value. If so, how often is the ov updated? I'd be interested to know.

Tim

Kilkis
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Re: Transferring proceeds of villa sale

Postby Kilkis » Sun Aug 09, 2015 5:42 pm

It should be the current objective value. I don't think there is a fixed period for updating it. When they think the objective values and market values are getting too far out of step they tend to adjust it. They did go through a period of updating it quite often when prices were going up quite quickly. They now think that, because of the fall in prices, the objective value can be above the market value and so there was talk of adjusting them downwards. I don't think that is going to happen, at least not this year. While the changes they make affect the whole country, when they do things tends to be dominated by what is happening in Athens or wider Attica so they don't necessarily reflect trends in Crete or northern Greece.

Warwick

Mixos
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Re: Transferring proceeds of villa sale

Postby Mixos » Sun Aug 09, 2015 6:06 pm

So how is the objective value arrived at in the first place? Do officials from the Dimos visit and assess a property when it changes hands? If, for example, an old semi-derelict village property is bought then renovated, clearly its original objective value will not be accurate, so I'm wondering how the process is conducted. Also, Warwick, you say only the full bill shows the O.V. Can we assume that our accountants will have a copy of that, even if they only furnish us with the abridged version?

Kilkis
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Re: Transferring proceeds of villa sale

Postby Kilkis » Sun Aug 09, 2015 9:48 pm

I can't profess to be an expert on objective values but as far as I know they are based on the area of the property and its location. A run down 100 sqm house and a brand new 100 sqm house in the same village would have the same objective value. Two 100 sqm properties in different villages may have different objective values. Nobody comes and assesses it. Notaries are issued with a value per sqm for each location within the Nomos where the notary is licensed to practise. Presumably the tax authority has them all. You submit an E9 form to the tax authority for every property you own. That E9 form informs them of the area of the property, the location of the property and the tax number(s) of the owner(s).

Your accountant will go on-line and download whatever documentation he decides to download. If he downloads both the calculation and the payment schedule then he will have both documents and should be able to email them to you. If he only downloads the payment schedule then that is all he can supply you with. I am not sure if it is possible for them to go back and download documents from last year. As soon as I received the payment schedule in 2014 I contacted my accountant and asked him to supply the calculation page which he did.

Warwick

Barbary Coaster
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Re: Transferring proceeds of villa sale

Postby Barbary Coaster » Mon Aug 10, 2015 10:28 am

I am in the process of selling a property - deposit received and waiting for the banks to allow international transfers.

One of the two lawyers involved has stated that transfers from non-Greek bank to non-Greek bank can only happen if the buyer is earning a salary in Greece. This has been questioned and I will post the outcome.

In addition, my lawyer has advised that objective values no longer apply - the price declared is the actual sale price.
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Tim
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Re: Transferring proceeds of villa sale

Postby Tim » Mon Aug 10, 2015 5:53 pm

In addition, my lawyer has advised that objective values no longer apply - the price declared is the actual sale price.


If that is correct, will it not have a significant effect upon the Capital Gains Tax the seller is liable for? I understood the CGT was calculated on the difference between the ov when the property was purchased and the ov at the time of sale.

Ouch! (if that's the case) :cry:

Tim

Kilkis
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Re: Transferring proceeds of villa sale

Postby Kilkis » Mon Aug 10, 2015 6:11 pm

Also what do you do if there wasn't a purchase price for the while property? I bought a plot of land and had a house built so there is a transfer of ownership contract for the land BUT NO transfer of ownership contract for the house. There is only a private contract which the developer and I signed showing what he was charging me to build the house. How do you show capital gain, or loss as it would be at the moment, in that situation?

Warwick


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