Mortgage in Greece

Greece has recently become a popular alternative for private property purchases and even immigration, especially among West-European pensioners seeking an inexpensive and quiet life there. The downturn in the Greek real estate market since the recent economic crisis has made those opportunities even more feasible and potentially lucrative.

Acquiring property in Greece can also be an easy way to obtain a residence permit there, as the government is currently using that proposition to attract foreigners to the Greek real estate market. A Golden Visa, for example, entitles you to permanent residence in the country upon the sole condition of purchasing a property for at least €250,000.

This article provides the reader with basic information on mortgage loans for foreigners and the acquisition of private property in Greece.

Contents

Purchase of Greek Real Estate by Foreigners

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The Greek government imposes minimum restrictions on the property purchase in Greece for non-EU citizens and none whatsoever for EU residents. The two main conditions for the former are the following:

1. They may not acquire property in the vicinity of military bases and national borders.

2. They might, in some cases, have to prove their relation to Greece and/or formally substantiate their intention to purchase property in the country.

Generally, Greek banks try to avoid mortgage lending, both to foreigners and nationals alike, and over three-quarters of all real estate purchases in the country are made in cash. Still, getting a mortgage isn't out of the question, provided you meet all the terms and conditions. 

Greek Real Estate Market

Prices for private property in Greece vary a lot. Flats in Athens, for example, cost between €70,000 and €400,000, while €200,000 is enough for a decent house in Crete. If you intend to purchase property for investment purposes, small islands, like Santorini, might be a better option as the potential yields are higher there. 

Mortgage Terms and Rates in Greece

A mortgage applicant must be at least 25, and the mortgage is to be paid off by the age of 58. Provided you meet those two conditions, you must open a bank account in a Greek bank and get a Greek tax number, or AFM.

The minimum loan is comparatively low in Greece, starting from €10,000. The maximum amount will depend on your income, although it rarely exceeds 80% of the price. Mortgage rates vary from 3.5% to 7.5%. Mortgage terms range from 6 to 30 years. 

Documentation Requirements

To get a mortgage in Greece, you'll need:

  • A copy of your ID or passport;

  • Your Greek Tax Number;

  • A letter of employment or any proof of income;

  • Any bill that shows your residential address;

  • Proof of a registered telephone number.

Needless to say, all the documents must be in Greek and notarised. 

Mortgage Processing Costs in Greece

Besides the application and legal fees, you'll have to pay certain property taxes, the ENFIA being the main one.

The following are the typical property tax rates: 

Property value

Tax rate

€200,000

0.10%

€300,000

0.15%

€400,000

0.25%

€500,000

0.35%

€2,000,000

1.10%

Over €2,000,000

1.15%

You can expect the mortgage and purchase registration costs to come to about 10–15% of the transaction value. And you may save a significant amount by comparing the exchange rates as the latter vary greatly in Greece. 

Property transfer tax

3.09%

Registration fee

3.5% to 7.5%

Notary fees

1.86%

Legal fees

1.86%

Agent fees (if applicable)

2.48%

 

You'll have to bear all these costs before a mortgage lender finances the purchase transaction. 

Real Estate Purchase Financing Alternatives

If you find the Greek mortgage rates too high, you may want to consider one of the following alternatives:

  • Remortgaging your current property to buy one in Greece;

  • Finding a private lender (although the interest rates will be extortionate);

  • Negotiating special terms with the seller.

But whatever alternative you choose, make sure you have at least 10% of the property value for a down payment. 

Mortgage Registration Procedure in Greece

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The actual registration is a relatively straightforward procedure, and it can be completed in one visit to Greece. The purchase processing will take from one to three months from the registration date.

1. First, you open an account in any Greek bank and apply for a tax number.

2. As soon as you choose a property, you can reserve it by depositing a small amount of money upfront. As a rule, €5,000 will suffice to have the property reserved for 2–4 weeks, depending on the individual agreement with the seller.

3. Next, you will hire a legal agent to verify the seller's property documentation and your mortgage registry. The lawyer's fees will amount to about 1.5% of the transaction value, plus the VAT.

4. Make a 10% down payment, sign a preliminary purchase contract and have it certified by a notary, who will charge a fee of 1.2% of the transaction value. You will also have to pay a registration fee of approximately 0.5–0.75% of the transaction value.

5. Submit all the documentation to the Registry of Mortgages and the Land Registry to obtain a property title. 

Mortgage Terms for Golden Visa Applicants

According to the Greek immigration laws, you must become an owner of property worth at least €250K before applying for a golden visa. However, unlike in other countries in the European Union, Greek legislation allows you to apply for the visa if you purchased the property with a mortgage loan and have not paid it back in full yet.

Therefore, as soon as you have confirmed with the Consulate or your lawyer that you meet the requirements for the visa and have good chances for obtaining it, you can apply for a mortgage in any bank, including Greek ones. The terms in a Greek bank will not differ much in that case.

You will first have to collect all the documents required for the application (see the section on documentation) and apply for a Greek visa if you need one. If you visit the bank with an interpreter or, even better, a local attorney, you will, most likely, be able to complete the procedure in one day.

However, keep in mind that your income must be at least 30K euros per year for you to have any chance. Plus, if you are a non-resident, especially if you are a national of a country outside the European Union, they could ask for a larger down payment, which may, in some cases, go as high as half of the total property value.

Foreigners' Rights to Buy Property in Greece

According to the Greek laws, anybody can buy real estate there, whether nationals or non-residents, as long as they meet all the legal and financial requirements and the property is not near the country's borders or military bases. And since the last economic crisis and a noticeable downturn of the country's property market, the Greek government has exerted considerable effort to attract foreign direct investments in this sector of its economy.

Still, they might, in some cases, ask you to explain in a written form why you would like to acquire property in Greece and whether you have any relation to the country. Besides, they do seem slightly less hospitable to non-EU residents, but it all comes to money, after all. And your nationality becomes less significant if you have a good income and intend to make a considerable investment in their economy.

Greek Property Acquisition Procedure

In general, it does not take much time or effort to buy flats in Greece, compared to other European states, as long as you prepare all required documentation and have a lawyer and an interpreter:

  1. Browse the market to find a property you would like to buy.
  2. Prepare the required documentation.
  3. Apply for a visa and arrange a visit to the country.
  4. Find a lawyer and an interpreter, or the two in one.
  5. Open a bank account, apply for a local tax number and make a down payment.
  6. Pay the property transfer tax and registration, notary, agents and legal fees.
  7. Apply to the Land Registry for a property title and prepare to enjoy your new home away from home.

Conclusion

The Greek real estate market offers excellent investment opportunities, provided you have enough money for it or can afford the mortgage rates in Greece. And now may be a good time to do it while the market is still recovering from the last crisis.

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