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Buying property in Greece: scams and pitfalls

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Everything you need to know is included in our Greece Property Pack

Greece's real estate market is gaining attention from foreigners due to its beautiful landscapes and potential for lucrative investments.

Navigating the property market in this area can be quite challenging, especially for non-local residents. There are various obstacles and unexpected problems that you might encounter if you're not cautious.

Our community of property buyers and local collaborators have communicated several issues to us. We've listed them all in our Greece Property Pack.

This article will give you a quick overview of some of the potential pitfalls you could face.

Is it safe or risky to invest in real estate in Greece?

While the safety of purchasing property in Greece generally holds true, the aftermath of the economic crisis of the late 2000s saw a rise in distressed properties.

There have been situations in places like Athens where sellers, due to financial difficulties, sold properties but had outstanding debts.

Buyers, unaware of these debts, found themselves liable, given the Greek law that property debts can be transferred with property ownership. Thus, it's paramount to ensure that there are no hidden liens or debts associated with any property.

A prime example that often catches foreigners off guard is the concept of 'antiparochi' – a system where property developers provide a new building in exchange for land.

Landowners get apartments in the new building as payment. It sounds straightforward, but complications can arise if the developer goes bankrupt or if construction is halted.

Several foreigners have found themselves entangled in such deals, with neither their original land nor the promised apartment.

The Greek bureaucratic system is, by many accounts, intricate.

An example is the Cadastre system – Greece's attempt to create a comprehensive land registry. Initiated in 1995, it's still an ongoing project, and not all properties are recorded, leading to potential title disputes. Especially on islands like Mykonos or Santorini, there have been cases where multiple parties claim ownership of the same plot, rooted in inheritance disputes or old, handwritten deeds.

Greece's "Golden Visa" program is a good illustration of how government incentives can both aid and impede.

By offering residency to non-EU citizens who invest a certain amount in real estate, Greece has attracted significant foreign investment. However, in popular locales like Crete, this has inflated property prices.

While beneficial for sellers, it's made it challenging for ordinary Greeks and foreign buyers looking for affordable options.

Language and cultural barriers play a significant role.

For instance, the traditional Greek practice of passing properties down through generations without official documentation has led to fragmented ownership.

A property might appear owned by a single individual, but in reality, multiple distant family members might have a claim.

This has led to unexpected disputes and challenges for unwary foreign buyers.

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Potential real estate buying mistakes in Greece

"Arxaiologia" or archaeological laws and regulations

One pitfall specific to buying residential property in Greece, especially for foreigners, is the potential misinterpretation or misunderstanding of the "arxaiologia" (archaeological) laws and regulations.

Greece, with its rich ancient history, has numerous areas that are considered of archaeological interest. When purchasing property, particularly in areas close to historical sites or on islands like Crete or Santorini, you should be aware of any archaeological restrictions that might apply.

In Greece, if a land is deemed to have archaeological significance, any development or alteration can be severely restricted or even prohibited. This could include renovations, extensions, or building new structures on the property.

The challenge is that these restrictions aren't always immediately apparent or clearly marked in property listings. The frequency of this issue is higher in regions with a dense concentration of historical sites.

It’s essential for you to conduct thorough due diligence before purchasing.

This means not only checking the standard property documents but also consulting with local authorities or a lawyer specialized in Greek property law to understand any archaeological restrictions that might apply.

Failure to do so could result in costly legal challenges or even the inability to develop or alter your property as planned.

This pitfall is quite unique to Greece due to its extensive ancient heritage and the government's efforts to preserve it.

The issue of "oikopedo"

Another specific pitfall you should be aware of when buying residential property in Greece is the issue of "oikopedo" (plot) size irregularities. In Greece, especially in rural areas or on the islands, the actual size of a land plot may not always match the size recorded in the official documents, such as the "ktimatologio" (land registry).

This discrepancy can arise due to historical inaccuracies in land measurement, undocumented changes over time, or informal agreements between past owners that were never officially recorded.

When considering a property purchase, particularly in less urbanized areas, you must ensure that the land plot's size is accurately represented in all legal documents.

An inconsistency in the recorded size can lead to legal complications, affect the property's value, or even impede future sale or development.

To avoid this, you should commission an independent survey of the property by a qualified surveyor before finalizing the purchase. This step is crucial because relying solely on the seller's or real estate agent's information might not provide the full picture.

Additionally, engage with a local lawyer who understands the intricacies of Greek property law and can verify that all the documentation is accurate and up to date.

This issue is particularly prevalent in Greece due to the country's complex property history and sometimes inconsistent record-keeping practices.

It's a mistake easily overlooked by foreigners who might not be familiar with the local processes and historical context of Greek land ownership.

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The concept of "endoxi"

Another unique and often overlooked pitfall in buying residential property in Greece is related to the concept of "endoxi," which translates to the notion of "acceptance" or "approval."

This specifically refers to gaining approval from the local community or neighbors for property-related changes or developments. While this might not be a formal legal requirement like obtaining a building permit, in many parts of Greece, especially in smaller communities or on the islands, local customs and community approval play a significant role.

When you purchase property with the intent to renovate or build, you should be mindful of the local community's sentiments and traditions.

In some cases, local residents might have expectations or unwritten rules about the architectural style, color, or height of buildings. Disregarding these norms can lead to tensions with neighbors and the community, which can be distressing and challenging to navigate as a foreigner.

To avoid this pitfall, engage with the local community early in your planning process.

This might involve informal discussions with neighbors or even consulting with the local community leader.

This aspect is particularly unique to Greece, where community ties and local traditions often have a strong influence, and overlooking this can lead to unexpected challenges in your property development journey.

The issue of "ypothekes"

A specific pitfall to be aware of when buying residential property in Greece is the issue of "ypothekes" or mortgages and liens on the property.

In Greece, it's not uncommon for properties, especially those that have been in families for generations, to have undisclosed or unresolved mortgages, debts, or liens attached to them. These financial encumbrances can be inherited along with the property and might not be immediately obvious when you're considering a purchase.

The complexity arises because, in some cases, these financial obligations are not properly recorded in the "ktimatologio" (land registry) or are tied to the property through family agreements and inheritances that are not formally documented.

As a foreigner, you might not be aware of these nuances and the ways debts can be attached to properties in Greece.

To safeguard against this, it's crucial that you conduct a thorough due diligence process.

This should include a detailed examination of the property's legal and financial history, and verification of its status in the land registry. It's highly advisable to work with a local lawyer who specializes in Greek property law and can navigate these complexities.

Engaging a lawyer will help ensure that any hidden mortgages, debts, or liens are identified and resolved before you complete the property purchase.

Neglecting this step could result in you inadvertently assuming responsibility for these financial obligations, leading to significant legal and financial complications.

This pitfall is particularly relevant in Greece due to the country's complex property and inheritance laws and the historical informality in property transactions.

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"Choriki" or rural land

A unique and often overlooked pitfall in buying residential property in Greece is the complexity surrounding "choriki" (rural) land.

In Greece, there is a distinct classification of land that falls outside urban planning zones, known as "choriki" land. This classification comes with its own set of regulations and restrictions, particularly regarding building rights and land use.

If you're considering purchasing a property in a rural area or on a Greek island, it's crucial to verify the land classification and understand what you can and cannot do with the property. In many cases, "choriki" land has strict limitations on development. For instance, the amount of land you need to own to legally build can be significantly larger in rural areas compared to urban zones.

Additionally, there may be restrictions on the types of structures you can build, their size, and their intended use.

To navigate this issue, you should conduct thorough research and consult with local authorities or a lawyer specialized in Greek property law.

They can provide detailed information on the zoning regulations and building codes applicable to the property.

This step is essential to avoid buying a property with unrealistic development expectations. This pitfall is unique to Greece due to its distinct classification of rural land and the specific restrictions that apply.

As a foreign buyer, you may not be familiar with these nuances, which can significantly impact your property investment and development plans in Greece.

The "δασικοί χάρτες" or the forest maps issue

Another pitfall specific to buying residential property in Greece, particularly for foreigners, is overlooking the "forest maps" (δασικοί χάρτες) issue.

In Greece, forest maps are used to designate areas as forest land, and these areas are subject to strict environmental and development regulations. This classification is crucial because if a property is located on land classified as forest, even partially, it severely limits what can be built or altered on that property.

The challenge arises because the classification of land as forested can sometimes be outdated or inaccurate. Moreover, new forest maps are periodically released, which can change the status of a property.

As a foreign buyer, you might not be aware of this system or its implications for property development.

Before purchasing a property, especially in rural areas or near natural landscapes, you should verify the status of the land on the most recent forest map. This can be done through local municipal offices or with the help of a lawyer specialized in Greek environmental and property law.

It's essential to check this because if you purchase a property and later discover it's on forest land, you could face significant legal hurdles and restrictions on property development.

This issue is particularly prevalent in Greece due to the country's efforts to protect its natural landscapes and the evolving nature of forest land classification.

As a foreigner, it's easy to overlook this unique aspect of Greek property law, leading to unexpected complications in your property investment.

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The issue of "adeia parochis" or utility connection permits

A particularly unique pitfall in buying residential property in Greece that foreigners often overlook is the issue of "adeia parochis" (Άδεια Παροχής) or utility connection permits.

In Greece, especially in more remote or rural areas, a property may not have the necessary permits for connecting to essential utilities like electricity, water, and sewage. Even if the property is already connected, the legality of these connections might not have been formally established or updated in accordance with the latest regulations.

This can be a significant issue because securing these permits after purchasing a property can be a complex, time-consuming, and potentially costly process.

In some cases, the local infrastructure may not even support the required connections, posing a major problem for residential use.

To avoid this pitfall, you should thoroughly investigate the property's utility connections before purchasing. This involves not only confirming the existence of these connections but also ensuring that they are legally permitted and up to date with current regulations.

Hiring a local lawyer and a technical consultant to review these aspects can be very beneficial.

This issue is particularly relevant in Greece due to the country's varied terrain and the distribution of its infrastructure, which can often be less developed in rural or island areas.

As a foreign buyer, understanding and verifying the status of utility connections is crucial to ensure that your property in Greece is functional and compliant with local regulations.

The concept of "synolika ktiria"

Another unique and often overlooked pitfall when buying residential property in Greece, particularly for foreign buyers, is the complexity surrounding "synolika ktiria" or the shared ownership of buildings.

In Greece, especially in urban areas like Athens or Thessaloniki, many residential buildings are divided into separate units owned by different individuals. This division of ownership often extends beyond the individual apartments to shared areas like the roof, stairwells, and land the building is on.

When purchasing a property in such a building, you must understand not only your rights to the individual unit but also your obligations and rights regarding the shared parts of the property.

This includes understanding the "koinochrista" (common expenses) system, which involves shared maintenance and repair costs.

Failure to fully understand the extent of your share and responsibilities in a shared building can lead to disputes with other owners, unexpected expenses, and legal complications. This is particularly challenging in older buildings or those with no active management, where responsibilities and costs can be unclear.

To navigate this, ensure you obtain and review the building's regulations and any existing agreements regarding shared ownership and expenses. It's also wise to speak with current residents or owners to get a sense of how these matters are handled.

Consulting with a lawyer experienced in Greek property law is essential to clarify your rights and responsibilities in a shared building.

This aspect of shared ownership and responsibility is unique to Greece due to the prevalence of multi-owned residential buildings and the specific legal framework governing them.

As a foreign buyer, being aware of and prepared for the complexities of shared ownership is key to a successful property purchase in Greece.

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The risks regarding "enfia"

Yet another unique pitfall when buying residential property in Greece, particularly for foreign buyers, relates to "enfia," the annual property tax.

In Greece, enfia can be quite complex and is often a source of confusion for foreigners. The amount of enfia due varies widely depending on the location, size, age, and other characteristics of the property.

The key issue here is that the calculation of enfia is not always straightforward.

It can be influenced by factors that are unique to the Greek tax system and may not be immediately apparent to someone unfamiliar with it. For example, the tax value of a property (which is often different from its market value) can change based on revisions to tax laws or revaluations of property zones.

Before purchasing a property in Greece, you should thoroughly understand the enfia implications. This means not only knowing the current enfia for the property but also anticipating potential changes in the future.

It's important to factor in this ongoing cost when considering the overall affordability of the property.

To ensure you are fully informed, consult with a local accountant or tax advisor who is well-versed in Greek property taxation.

They can provide detailed information on enfia calculations and help you understand how future changes in tax laws or property values might affect your tax obligations.

Neglecting to account for enfia can result in unexpected financial burdens down the line.

This aspect of Greek property ownership is particularly challenging for foreigners due to the complexity and fluidity of the Greek tax system.

Being well-prepared and informed about enfia is crucial for a successful property investment in Greece.

"Кίνδυνος εκπροπρίωσης" or "risk of expropriation"

An additional specific pitfall when buying residential property in Greece, especially for foreign buyers, is related to the "expropration risk" or "risk of expropriation" (κίνδυνος εκπροπρίωσης).

In Greece, there are instances where the government can legally expropriate private property for public purposes, such as infrastructure projects, urban redevelopment, or archaeological discoveries.

This risk is particularly relevant in areas where future development projects are planned or possible, like new roadways, public facilities, or areas near historical sites. The challenge for a foreign buyer is that information about potential expropriation might not be readily available or easily understood, especially if it involves navigating local government plans or legal documents.

To mitigate this risk, it's crucial to conduct comprehensive due diligence before purchasing.

This involves investigating the local urban planning and development plans to identify any future projects that might affect the property. Consulting with a local lawyer experienced in Greek property law is essential.

They can help you understand the potential risk of expropriation and advise on any legal precautions you can take.

It's also advisable to check for any historical or archaeological significance of the property or the surrounding area, as this can increase the risk of expropriation. This kind of due diligence is particularly important in Greece due to its rich history and ongoing development projects.

While the risk of expropriation exists in many countries, in Greece, it's compounded by the country's extensive archaeological heritage and active infrastructure development.

As a foreigner, being aware of and prepared for this potential risk is an important aspect of ensuring a secure property investment in Greece.

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