Buying an apartment in Nea Hora

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dixoncb
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Buying an apartment in Nea Hora

Postby dixoncb » Fri Sep 01, 2017 9:46 pm

After years of havering, we've found an apartment in Nea Hora (licence 2005) that we're preparing to make an offer on. We went through the whole cycle of looking for houses, coming up against the tax residency situation, looking for apartments, Brexit nihilism, and finally we've come back to an apartment we saw last year, and which is still for sale.

We're (a couple) a few years away from retirement, so our plan is to spend less than 180 days per year here before then, letting/AirBnB'ing the apartment for as many of the others as we can. At retirement, we'll probably spend more time here.

I know buying in Greece is complicated, so I'm throwing myself on the goodwill of the Forum just to check I haven't missed anything big. I have a lawyer with a Power of Attorney, enough euros, and a civil engineer (who gave the apartment a good report). I'm aware of the rough costs of ΕΝΦΙΑ, ΔΕΥΑΧ, ΔΕΗ and communal building charges. Internet is absolutely crucial - I need to be able to have decent Skype-type speeds. I speak reasonably good Greek, and know Chania and the West of Crete well. I'm truly open to all advice, because I can't afford to make a big mistake.

Kilkis
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Re: Buying an apartment in Nea Hora

Postby Kilkis » Sat Sep 02, 2017 7:05 am

I would suggest setting up a meeting with a good accountant and discussing all the issues surrounding registering the property for letting and tax issues related to having an income in Greece. Since you intend to be in Chania I would recommend George Atsalakis. Forewarned is forearmed.

Warwick

filippos
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Re: Buying an apartment in Nea Hora

Postby filippos » Sat Sep 02, 2017 7:24 am

I agree with Warwick's suggestion and the choice of accountant.

dixoncb
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Re: Buying an apartment in Nea Hora

Postby dixoncb » Tue Sep 05, 2017 8:49 am

Thank you! I was given George's details by my notary, so it's good to have a second recommendation.

:)

moggieman
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Re: Buying an apartment in Nea Hora

Postby moggieman » Tue Sep 05, 2017 3:35 pm

letting/AirBnB'ing the apartment

Just make sure you have the license to let AirBnB'ing is now being checked for illegal lets. You won't like the fines. !!

paul g
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Re: Buying an apartment in Nea Hora

Postby paul g » Tue Sep 05, 2017 6:30 pm

Do you mean that you need an EOT licence to Airbnb, that's going to catch out a few people, I thought it was just the taxman checking things out.

Kilkis
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Re: Buying an apartment in Nea Hora

Postby Kilkis » Tue Sep 05, 2017 7:23 pm

The government introduced a slightly easier type of EOT registration for letting at a level below full tourist category. It does have restrictions so it is important that anybody intending to let through that method checks that what they intend to do fits within those constraints. I'm not involved with letting in any way but my understanding is that anybody letting short term without going through some sort of EOT procedure can be fined as well as getting the attention of the tax man. EOT are scanning letting sites like AirBnB and comparing the properties with their register in order to catch people who don't bother to register.

Warwick

filippos
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Re: Buying an apartment in Nea Hora

Postby filippos » Tue Sep 05, 2017 8:40 pm

Kilkis wrote:EOT are scanning letting sites like AirBnB and comparing the properties with their register in order to catch people who don't bother to register.

Haven't things got a bit more direct than that?
"The Treasury have begun looking for taxpayers renting real estate through electronic platforms like Airbnb. Auditors have already requested data from international platforms for properties registered on them."

See Carolina's post here.

The translation of the article is pretty good. Google translate seems to have improved.

Kilkis
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Re: Buying an apartment in Nea Hora

Postby Kilkis » Wed Sep 06, 2017 7:59 am

I would tend not to view it as two different methods, one of which is more direct than the other. Rather I think they are two steps in the same process. First you identify properties that are potentially being let illegally, i.e. are advertised to let but are not registered with EOT, which is the step I described. You then gather more information by contacting the letting site, e.g. how many times and for how long each time it has been let, the amount of rent paid and who that rent was paid to, which is the step described in the article linked by Carol.

As I said I am not involved in letting or renting so I don't know the details of the process. Either way the message is the same, the government are more determined to find and prosecute anybody who is letting illegally.

Warwick

dixocnb
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Re: Buying an apartment in Nea Hora

Postby dixocnb » Wed Sep 27, 2017 9:46 am

Thank you again for all of this. Each time I read about a new hurdle I just take a deep breath, have a cup of tea, and press. on.

I've received and read through the regulations for the apartment, and I'm doing my sums before making an offer. I know it's a vague area, but are there any guidelines for the ratio of objective value (which I know) to sensible offer price (which I'm trying to figure out) for an apartment in Chania?

Kilkis
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Re: Buying an apartment in Nea Hora

Postby Kilkis » Wed Sep 27, 2017 10:51 am

Probably not. The government is currently facing this problem and finding it very difficult to resolve, e.g see this ekathimerini article. In most areas of Greece there are so few properties changing hands that it makes it difficult to calculate the ratio of objective value to market value. The current objective values are known for all properties but in most areas of the country the market value is only known for a few and they may not be representative. The general view at the moment is that market values are now less than objective values and so the objective values need to be adjusted down to the market value otherwise property taxes are too high. In my experience market values in Crete have always been higher than objective values and still are. Given that level of uncertainty, i.e. you don't even know if it should be higher or lower let alone by how much, it is impossible to construct a guideline.

Take my own property as an example. I bought the plot and had a house built to my own requirements. The total cost was €195,000 but some of that was due to taxes, legal fees and estate agents fees so I don't know the exact figure. Lets say €180,000. All the Greek friends I have discussed it with say this was a reasonable and fair price not a "rip off the foreigner" price and, trust me, they would have delighted in telling me if they thought it was too high. If I take the absolute worst case change in the price index, from when the house was handed over to me to present, for the whole of Greece, it would be worth a bit more than half that value today. Thus it should have a market value of more than €90,000. That is an extreme worst case low estimate so it is probably over €100,000. Based on other peoples experience, who have tried to sell their properties, I am pretty sure an agent would put it on the market for at least €150,000 but I have no idea what it would achieve. According to my latest ENFIA tax bill the objective value is a little over €66,000. How can you make any sense of prices at all with that sort of discrepancy.

I doubt if there is any point in trying to work out a sensible offer. Make an offer less than the asking price that would work for you and see what happens. If the owner is desperate to sell they will reject it but start to negotiate. If they are not desperate to sell, and the majority of Greeks aren't, then they will just say no and possibly increase the asking price on the basis that, if buyers are going to try to talk them down, they need to start higher.

There are also due to be online auctions of properties repossessed by banks for non payment of loans and it might be worth investigating that if you want a low price. There seems to be a number of delays in getting this system going and I don't know if there will be any in Chania but it might be worth contacting a lawyer specialising in property law and asking if they know of any and could they help you negotiate. See this article and this one for example.

Warwick

dixocnb
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Re: Buying an apartment in Nea Hora

Postby dixocnb » Thu Sep 28, 2017 12:16 pm

Thank you for your time and your response. That sounds like great advice. Here goes...


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