A Philosophical Perspective

Home of the great philosophers, not to mention magnificent architecture and sun-drenched beaches, it’s easy to see why Greece has captured the imagination of investors

When searching for a dream holiday home or looking to invest in overseas property, for many, Greece is an obvious choice. An incredibly diverse country blessed with a long and fascinating history and some of the most beautiful beaches in the world, Greece boasts one of the longest coastlines in Europe as well as 227 islands and islets.

Consistently rated as one of the best countries in Europe from a lifestyle and an investment perspective, in 2021, Ernst & Young consultancy, ranked Greece as one of the top 10 most attractive European investment destinations. It’s especially popular with British expats and retirees, who can draw their UK pension there. One of the reasons why foreigners choose property as an investment on the mainland or one of the islands, is the opportunity to secure a residence permit under the Golden Visa Programme. This has been operating in Greece since 2014, with a minimum real estate investment to obtain a residence permit, of €250,000. Plus, it’s easily reached from most UK international airports in an average flight time of 4 hours, with many airlines offering numerous flights a week.

When considering a property purchase, it’s important to comprehensively research the market. Prices vary significantly depending on location, with properties in Mykonos, Santorini and Athens commanding a premium. Mykonos island remains throughout the years at the top-3Greek destinations for foreign buyers seeking to purchase a property in Greece. comments Fani Dritsa, of Savills Greece.

"The demand focuses mainly on luxury villas with more than 4-5 bedrooms, with great income since the rental season is about 4-5 months. The areas attracting the majority of clients are those closer to Mykonos town (Chora) but also on the southern part of the island, which is protected by the strong summer winds, for which the island is famous. Selling prices for a typical 3-5 bedrooms villa range from €8,000 to €13,000/sqm. Mykonos also offers multiple 5* hotels, with many new  international brand openings scheduled over the next years, where one can find all kinds of amenities suitable for every tourist taste."

As a member of the European Union, there are no restrictions to buying a property in Greece for any fellow EU member citizens including those from the UK. Hiring a good local property lawyer experienced in helping buyers from the UK, is fundamental. The solicitor will be responsible for performing the necessary “due diligence” and ensuring the protection of your personal interests throughout the property transaction. After an offer is accepted, your solicitor will then proceed to draw up an initial purchase agreement, which you and the vendor will have to sign. At this stage, you will also be expected to pay a 10% deposit of the agreed purchase price to reserve the property.

When the title search takes place, your solicitor will check if there are any current charges made against the property, if the original construction has been completed in line with the local planning regulations, and whether or not all due taxes have been paid. Once your solicitor is satisfied that everything is in order, you will be expected to pay the balance of the property purchase price, along with all relevant government duties. During this period, your solicitor will obtain copies of the title; appoint a notary to prepare the contract deeds and satisfy themselves that the sale documentation has been correctly prepared and is in order. Once everything is signed by both the buyer and seller, the transaction will be registered in the public record.

Also bear in mind, that you will need a valid passport, your tax registry number and if necessary, a special permission to purchase, for this to be completed. As a general rule, you should look to budget between 10%to 16% for all purchase costs and fees associated with the acquisition. If you’re looking at buying Greek property purely as an investment, then there are two aspects that you should consider: capital growth and potential rental yields.

In relation to capital growth, Greek property values increased by an average of 5% to 10% per annum in the first decade of this century, however there is now an imbalance between supply and demand which, coupled with the severe economic downturn that’s still affecting Greece, means that capital value growth is currently very difficult to predict.

As regards to rental yields, these are still low, especially in the big cities including Athens, and have fallen considerably from about 2007 when they were between 5% and 7%. It’s also worthwhile noting that any capital gains realised from the sale of property is currently taxed at 20%, if it has been held for less than five years. If you’re a UK resident for tax purposes, and you own the property as a personal investment, then you’ll be liable to pay tax in the UK on your total income, which includes the profit made on the sale of your Greek property.

As a member state of the EU, Greece offers its residents and citizens a number of benefits including high levels of safety and security, excellent education opportunities, robust healthcare options, and a dependable rule of law, and with over 3,000 hours of sunshine a year, it’s the perfect place to spend your days.