Buying property at home is considered one of life’s most stressful events. Buying a property abroad can be even more so. Unless you do thorough research, your Crete property dream could soon turn into a costly nightmare.
We’ve listed below some points that you should check before agreeing to purchase your Crete property through an estate agent, real estate agency or property developer.
- Registered Company
Ensure the estate agent, real estate agency or property developer is registered and licensed and has an office rather than just a mobile telephone and a PO box address in the UK.
If buying a property that requires renovation ensure you are given a realistic breakdown of the full cost of renovation. Make sure this figure includes taxes and IKA Insurance.
If you are planning to rent out your property you will need to acquire an EOT licence issued by the Greek National Tourist Organisation. This is a legal requirement if you intend to let your Crete property on a short-term basis to tourists and can cost in the region of €3,000. You should check if the property meets the requirements to acquire an EOT licence. If the property is part of a complex or an apartment, all other property owners need to agree too.
Check whether your property is (or in the case of an off-plan property will be) connected to the main sewerage system or if it has a septic tank. If it has a shared septic tank, is it shared with other properties? Who will be responsible for emptying it? Who will pay for this? How often will it need emptying?
- Maintenance Fees
If the property includes a shared swimming pool and/or landscaped gardens check who will be responsible for cleaning and maintenance. Find out the probable costs and how these costs will be shared between all parties.
- Capital Gains
Bear in mind that new property sales bear a VAT rate of 19% and capital gains tax has been structured to make sure short-term investors have to pay a healthy sum to sell on a property quickly - the tax is inversely proportional to the amount of time the property has been owned (20% for less than five years reducing to zero if owned for more than 25 years.)
- Legal Fees
Buyers can expect to pay up to an additional 15% on the purchase price to cover all costs and fees. These costs and fees will include Registration, purchase tax, notary and legal fees, in total all averaging 12% - 15% of the total sale price.
Perhaps even more caution should be take if you are considering purchasing an off plan property.
Off Plan Property
Are extra items such as air conditioning, central heating, solar panels, etc, included in the quoted price?
- Completion Date
Is there a guaranteed completion date? Is there a penalty clause if it is not met?
- Outside Village Limits
Establish the actual cost of water and electricity supply when buying land outside village limits. A plot without utilities needs thought as cost of connection varies (and can be high).
- Building Permit
When purchasing land which has no building permit in place, pay a local architect or engineer to check out planning permission problems or restrictions such as archaeological and forestation, legal access etc, and to make the permission a pre-condition of the finalising of a purchase. Building permits are costly; about €10,000 for a 250 sq metre home.
If buying property off-plan check what other property developments are planned for all land around your plot. Your dream of a sea view may be shattered if other developments spring, up obscuring your view.
- Building Licence
Ensure all necessary payments including building licence, taxes and IKA Insurance are included in the quoted price.
Just some of the reasons we love Crete...
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