Buying Property in Greece

Greece is a familiar destination for Israelis looking for a holiday home, an investment or a second base in Europe, close to Israel. The short flight, the climate and the range of properties are appealing; nevertheless, buying in a foreign country follows rules that differ from those we know in Israel. This guide explains, from the Israeli side, which legal steps are worth knowing before you sign and which questions to ask or are relevant to you.

One point first: Greek law governs the transaction itself, so every step should be checked with a lawyer from our firm, in Greece, who is licensed to practise Greek law. An Israeli lawyer can accompany you on the Israeli side of the process, coordinate with your local lawyer and make sure your documents are properly prepared, but cannot replace local advice.

Key point: make sure an independent lawyer acting for us represents you, not one acting for the seller

In cross-border deals it is common for the seller, the agent or the developer to suggest "a lawyer we work with" (which is not wrong in itself). Naturally, the lawyer representing you must act for you alone, with no dependence on the deal closing as a condition of payment. Make sure, among other things:

• What exactly is included: which checks were carried out, points of emphasis in drafting the contract, attending the signing, or registration too, or alternatively that registration will be completed?
• Do they work in Hebrew, English or Greek, and in what format will they report to you?
• What additional costs will be added to the transaction?

Checking the property before any commitment

Before you pay a deposit, your local lawyer should examine the legal status of the property. The usual checks include:

1. Ownership and registration. Is the seller the registered owner, and in which register is the property recorded? Greece operates both an older land registry and a newer cadastral system that is being rolled out gradually, so it matters where the property is registered and what the registration status is.
2. Liens and attachments. Are there mortgages, attachments or third-party rights registered against the property?
3. Planning and building permits. Was the property built with a permit? Are there building violations or enforcement proceedings? With older properties and village houses this question comes up often.
4. Debts. Local taxes, utility bills and management charges that may remain attached to the property.
5. Co-owners. If several siblings inherited the property, for example, you must make sure that all owners sign the sale.
6. Special restrictions. In border areas and certain other zones, permit requirements may apply to buyers from outside the European Union. Whether this applies to a specific property must be confirmed by the local lawyer.
7. Architect's opinion. As part of the preliminary checks, consider obtaining an opinion from a local architect on the building rights.

The aim is not to alarm you but to make sure you know what you are buying before you commit.

The usual stages of a transaction

The exact structure varies by property and parties, but the process generally looks like this:

• Personal preparation. A foreign buyer usually needs a local tax identification number and sometimes a bank account. Our local lawyer will explain what is actually required.
• Preliminary agreement. A preliminary agreement or undertaking is sometimes signed and a deposit paid. This is where conditions precedent, deadlines and what happens if the checks reveal a problem matter most.
• Signing before a notary. In Greece the sale deed is normally signed before a local notary, who also takes part in checking the documents and in registration.
• Registration and taxes. Alongside the signing, the transaction is registered in the relevant register. Taxes, levies and fees are set according to the size of the transaction and by current law and practice, so ask your local lawyer for a written, up-to-date breakdown before signing, and certainly do not rely on general tables found online.

Notarial power of attorney and apostille

You cannot always travel to Greece for the signing. In that case you can appoint a representative to sign for you, and the usual route is a notarial power of attorney. From the Israeli side it generally works like this:

1. Your local lawyer drafts, or approves, the text of the power of attorney and the authority it grants.
2. You sign it in Israel before a notary, who verifies your identity and signature.
3. The document receives an apostille, a certificate that allows a public Israeli document to be used in a country that is party to the Hague Convention. In Israel the apostille is issued by the competent authority.
4. A certified Greek translation of the document is sometimes required, and sometimes an English version is sufficient.

Define precisely what the representative may do, for which property and up to what price, and set an expiry date. A power of attorney that is too general is an unnecessary risk. More about this process appears on the international law page.

The Israeli side: reporting and tax

Buying property abroad is not only a local matter. As an Israeli resident you may have obligations in Israel, such as reporting on assets and on income from abroad, depending on Israeli law and your circumstances. Rental income, or a gain on a future sale, may be taxable in both Greece and Israel, with mechanisms to avoid double taxation under a treaty between the countries. Do not assume it will "work itself out": speak to an accountant or tax adviser who knows both systems before the purchase, not after.

Financing and transferring funds

If you are transferring money to Greece, keep records of the source of funds and of every transfer. Israeli and foreign banks alike ask for explanations of the source of funds in larger transactions. Where financing is provided for the transaction, you can check in advance whether the local bank lends to non-residents and on what terms.

Inheritance and planning ahead

A property in Greece is also an asset for inheritance purposes. Whoever inherits it will need both Greek and Israeli law to be examined, and sometimes two wills. It is best to plan this at the time of purchase rather than when it is too late. The Israeli background appears in How to Write a Will in Israel, and for property abroad you should also consult a local lawyer about the consequences.

Common mistakes

The common mistakes are detailed below:

• Signing a preliminary agreement and paying a deposit before the property has been checked.
• Relying on a lawyer or agent who acts for the seller.
• Signing a power of attorney that is too broad.
• Ignoring the Israeli side: reporting, tax and estate planning.
• Relying on general information online instead of current local advice.

In summary

Buying property in Greece can be a sound transaction when it is accompanied by the right checks, an independent local lawyer and properly prepared documents in Israel. If you are considering such a purchase, you are welcome to contact us for an initial conversation about the Israeli side of the deal, including notarial power of attorney, apostille and coordination with a local lawyer. The information in this article is general, is not legal advice, and does not replace a review of Greek law by a lawyer in Greece.