Cyprus or Crete ?

Chat and items of interest about Crete and Greece.
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Cyprus or Crete ?

Postby Cyprusman » Fri Aug 10, 2018 9:37 am

Greetings Everybody,

Well we sold up everything in the UK in 2003 and moved to Cyprus for good. Bought 4013m of land, and built our own dream Villa.

Although things have changed here a lot in 15 years and they are now building everywhere around us, and destroying Cyprus with high rise buildings popping up everywhere. Because Cyprus is the middle of a huge property boom at present, mainly due to the 'Golden Passport' scheme for wealthy Russian and Chinese investors.

Anyway we are thinking of selling up and having a look at Crete, although we have never been there before !
So have booked a holiday and property visit at the end of October in the Chania (Hania) area.

We were wondering what are the good and bad things about living in Crete ? We are use to 'Red tape' living over here, and have heard
that Crete is a bit like living in Cyprus 30 years ago ?

So we would appreciate any comments please.

Many Thanks.

Kevin & Catherine.

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Re: Cyprus or Crete ?

Postby Kilkis » Fri Aug 10, 2018 1:13 pm

There may be economic differences depending on your financial situation. If you are in receipt of a UK pension and are tax resident in Cyprus I think you can opt for a 5 % flat tax rate with a lower tax free threshold of €3,420 or for the normal progressive income tax bands and a tax free allowance of €19,500. No such system exists in Greece and you are taxed on the normal bands. Also the tax free allowance in Greece is less than half what it is in Cyprus and the rates in Greek bands tend to be higher. You also pay a solidarity tax on total income that ranges from 0 % to 10 % in bands in addition to the income tax, i.e. the same income is taxed twice. Having said that many ex-pats have managed to get themselves declared non-tax resident in Greece and pay tax back in the UK. Get a good accountant.

I suppose it is self evident that most retired people on this board prefer Crete to Cyprus otherwise we would be living in Cyprus.

I've only visited Cyprus for holiday and for work so I can't say I know it well but I did work for a long time with a Cypriot who left in 1974 so I did pick up some information. I think the legal system is much better in Cyprus than in Greece, based largely on the UK legal code rather than Napoleonic. For example I believe it has a well run land registry covering virtually all properties and it is very easy and quick to establish ownership with a very high level of confidence. Greece doesn't. There's a registry of sorts but it doesn't cover all properties and I wouldn't rely on the information it contains.

The civil engineer I talked to claimed 99 % of properties in Greece are illegal in some way and the experience of ex-pats I know personally would tend to support that claim. Many now have quasi-legal status, i.e. the owners have paid penalties and they are legal for 30 years, so that ownership can be transferred, but nobody knows what happens then. If that worries you then you are going to have a pretty restricted choice. Also the lawyers, even the one working for you, and notaries won't tell you unless you ask very direct questions. Find a good property lawyer and get instructions on what terminology to use when querying status. On the plus side it is unlikely that the Greek government is going to order 99 % of properties to be bulldozed down so some solution will undoubtedly be found. The ones under threat are the ones with no building permission at all, especially in areas where building permission would never have been granted.

Lots of properties outside village boundaries are on what are termed split plots. Physically there are two adjoining plots separated by a fence and on each plot there is a house. Legally, however, it is a single plot and each party owns 50 % of the whole plot and both houses. It is possible to split such plots but there can be legal complications. For example the house you want to buy may be legalised and capable of ownership being transferred but perhaps the other house isn't. You can't split the plot unless the other owner legalises their house and they may not care. Lots of pitfalls for the unwary. Easy to buy but hard to sell.

Very minor point, we drive on the right while in Cyprus, like the UK, they drive on the left. Not a problem for most people but I do know some people who won't drive here even though they have a license because of it.

Crete isn't as short of water yet as Cyprus is but note that the stress is on the yet. The summer isn't quite as hot as Cyprus but not a big difference.

In general the west of Crete is greener than the east. Personally I like both ends of the island, although I chose to live in the west, but I don't like the bit in the middle around Heraklion.

Enjoy your visit and good luck


PS Cyprus has just signed a new Double Taxation Agreement with the UK replacing the 1974 DTA. Under the new DTA government pensions, e.g. civil servants, military personnel etc, remain taxable in the country of origin not the country of residence. Under the 1974 DTA they were taxed in the country of residence. In the Greek-UK DTA they have always remained taxable in the country of origin. UK State Pension is a grey area in Greece. Some ex-pats get it treated as a government pension and it remains taxable in the UK while others pay tax on it in Greece. The one thing you can guarantee in Greece is that the interpretation of any regulation has at least as many variations as there are bureaucrats dealing with it.

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Re: Cyprus or Crete ?

Postby Cyprusman » Fri Aug 10, 2018 2:50 pm

Dear Warwick,

Many thanks for your very informative reply. Yes I thought this would be the case with the Greek taxation system on our UK pensions in Crete.

So basically we would be a lot worse off in Crete financially than in Cyprus for sure. Because I pay absolute peanuts in Income tax here.
Also our Property tax is only Euro 170 for 2019, and our water rate was only Euro 20 for May-July.

So I think it would be best for us to stay as tax residents in Cyprus for 183 days a year, and sell our Villa and buy a smaller place up in the mountains.
Then rent in Crete for say 4-6 months a year, and visit all the other Greek islands at the same time !

I wondered why there was so many nice properties for sale in Crete !

So in a nut shell.... it is a great place to live and rent without buying a property !

Once again thanks for your reply.

Kind Regards.

Kevin & Catherine

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Re: Cyprus or Crete ?

Postby Kilkis » Fri Aug 10, 2018 4:44 pm

A number of factors have affected the property market in Greece. The Greek economy crashed around 25 % due to the austerity measures imposed by the Troika and has not really recovered since. Unemployment peaked at about 25 % overall and around 50 % for the young. It's gone down a little from that peak but I think that it is still the highest in the EU. Greek banks have around 45 % Non Performing Loans (NPLs) on their loan book so mortgages, or any form of credit, are virtually non-existent. There has been a significant number of repossessions that all appear on the market as distressed sales. In Crete a significant number of ex-pats who were working here could no longer find work so they returned to the UK often trying to sell their properties here. Before the crash there had been rapid expansion of the property market so there was probably over-supply when the crash hit. I am sure there are many other reasons.

The basic Greek tax bands on pensions and earned income is:

    €0 to €20,000 22 %
    €20,000 to €30,000 29 %
    €30,000 to €40,000 37 %
    > €40,000 45 %

There isn't a tax free band but there is a rebate of "up to" €1,9000 for a single person provided your earn less than €20,000. It is expressed as "up to" because you only get the full rebate if your assessed tax is more than that amount. If your assessed tax is less than €1,900 it would all be refunded. If your income is over €20,000 the rebate reduces by €10 for every €1,000 over €20,000.

Bank interest is taxed at 15 %.

In addition to income tax there is also a solidarity tax that is assessed in bands:

    €0 to €12,000 0 %
    €12,000 to €20,000 2.2 %
    €20,000 to €30,000 5 %
    €30,000 to €40,000 6.5 %
    €40,000 to €65,000 7.5 %
    €65,000 to €220,000 9 %
    > €220,000 10 %

The solidarity tax is calculated as a percentage of all income. So, for example, suppose you had a pension that was liable for tax in Greece, one that wasn't, e.g. a UK government pension, and some bank interest. The income tax brackets would be applied to the pension liable for tax in Greece, the 15 % would be applied to the bank interest but the solidarity tax would be applied to the sum of both pensions and the bank interest. That should allow you to calculate what your tax liability would be if you became tax resident here. Property tax is around €450 on a 110 sqm house in a 500 sqm plot in a village. It mainly changes with size and location. In addition there is a council tax of around €150 on the same house. My water bill is around €6 per quarter but some areas are much more expensive than that.

Even if you did decide to come to Crete full time I would suggest renting for a year anyway. You might decide on an area initially and then later decide that you would prefer to be somewhere else. If you buy at the beginning, selling again could be difficult.

Please don't misunderstand me. I am not trying to put you off coming to Crete. It is truly a magical place and I have no wish to live anywhere else but it is important to come with your eyes open.


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Re: Cyprus or Crete ?

Postby john4d » Sun Aug 12, 2018 2:33 pm


I may have misunderstood the solidarity tax. I thought the tax was always applied from zero. ie if the total income is €35.000 then you pay 6.5% on the whole €35,000, (€2,275) not just on the €5000 above €30,000 (€325) which would give a total of €1001. Did it change when they changed the percentages?

There's no such thing as a bad taste joke

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Re: Cyprus or Crete ?

Postby Kilkis » Sun Aug 12, 2018 3:03 pm

Yes, John, when the solidarity tax was first introduced the total income determined what percentage rate to apply and then that percentage rate was applied to the whole income. When they increased the percentage rates they changed it to operate more like income tax, i.e. each percentage rate applies to the income in that band. The submission made in 2016 for income in 2015 was the last year to operate under the old model. The submission made in 2017 for income in 2016 operated under the new model so there has only been two submissions so far under the new model.


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Re: Cyprus or Crete ?

Postby bobscott » Sun Aug 12, 2018 9:59 pm

Dear Cyprusman

Warwick has given you some good advice which we would echo. He said 'Please don't misunderstand me. I am not trying to put you off coming to Crete. It is truly a magical place and I have no wish to live anywhere else but it is important to come with your eyes open.

It may sound commonsense, but surprisingly some people don't do it! When we came to live in Crete 21 years ago we rented for 7 years before buying land and building. We have subsequently sold and are now back in rented accommodation - largely due (but not exclusively so) to the uncertainties surrounding Brexit. Would strongly endorse the 'Rent First for a while' approach. Then you can see if it is really what you want, and where you want it!

If you do come to Crete, Welcome!

Bob and Anna.
Yesterday today was tomorrow. Don't dilly dally!

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Re: Cyprus or Crete ?

Postby Wanttobe » Tue Aug 14, 2018 4:30 pm

Hi Cyprus man. We to live in Cyprus in a village outside paphos been here 21 years now very true about what your saying we go to crete at least 2 a year I think you will like it over there we going mid October To the far side of the island sitia first then back to Chania for the last few days I wished we had gone to crete many years ago as I feel we would be there now
Have a lovely time over there

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Re: Cyprus or Crete ?

Postby Maud » Wed Aug 15, 2018 1:52 pm

Hello Cyprusman,

Good luck with whatever you decide to do. - Keep us informed.

We share our time between the U.K. and Crete, and in many ways I wish we had moved there permanently some years ago, but family commitments prevented it. We have spent a lot of time on the island ever since 1979 and watched it change, but it is still a beautiful place. I would however ‘second’ Bob and Warwick’s comments about renting now. - There is plenty of property available to purchase, but it will not always be easy to sell if you need to. The rental market is also good, so you will not be short of options.

We have friends who returned from living in Cyprus to the U.K. in June. They had lived out there for 22 years and had owned a property there for almost 30 years. Like yourselves, they have had to deal with Cypriot bureaucracy over the years. They would regulary tell me how frustrating every thing was......yet to me it all sounded easy in comparison to Greece/Crete!

We have visited our friends whilst they lived in Cyprus, and although it is a lovely island, it has never been ‘foreign’ enough for us! As Warwick mentioned that traffic drives on the same side as the U.K and many of the shops one would also find on the high street of a U.K. town. Almost everyone speaks English. - Disappointingly, the only time I had to use my poor Greek, (which I like to try out at every opportunity), was in a remote bakery on the north coast by the Turkish border. Admittedly many people, especially in the towns and cities, now speak some English on Crete, but it is more common to find ‘Greek only’ speakers in Crete than in Cyprus, especially when you get out to the beautiful mountain villages and remote areas. Older people in these places still do not have good English. I think what I am trying to say is the Crete is far more ‘Greek’ still than the Greek part of Cyprus.

Our friends sold their villa to Russians. I hope they will be happy back in the U.K. They are already noticing the differences in the U.K. since they left 22 years ago! I think leaving any country after such a long time will be a ‘shock to the system’ but at least it would be less of a shock moving from Cyprus to Crete!

Like Warwick, our visits to Cyprus have been to visit our friend for holidays, not to live. I can honestly say however that we love Crete and would not have considered living on Cyprus in comparison. I am sure you will also love Crete, but take on board all of Warwick’s excellent advice. Renting might be the way to go for now.

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