The transaction volume for real estate purchases and sales in the 2018-2020 periods has been recorded as 3.03 billion Euros, as per the data presented by the Central Bank of Greece.

Greece has emerged as a global center of attraction for investor visas, not only in the EU but also globally. The US EB-5 program, which had been the largest investment visa issuer since 2011, has been replaced by Greece for the first time.

Greece’s investor visa application volume (Golden Visa) has almost tripled within two years, making it the top issuer of investor visas among all countries.

Gold Medal Race in the “Golden Visa”

Between 2008 and 2015, Greece experienced an economic crisis that resulted in a 40% decline in the real estate market. However, with the introduction of the “Golden Visa” application in 2013, foreign investors became interested in Greece due to the potential for medium-term investment profitability created by the market’s decline. As a result, the real estate sector began to recover in 2015, and the market has since grown by 10%, although it has not yet reached pre-crisis values.

From 2014 onwards, there has been a shift from negative to positive growth, and as of 2020, the growth rate has reached 4.5, approaching the pre-crisis level of 5.6.

Now, with the economic crisis behind them, the real estate market is attracting both foreign and Greek investors, leading to an increase in prices. The trend seen between 2018 and 2020 indicates that real estate prices are expected to rise quickly, and it is anticipated that it will take around five more years to reach pre-crisis levels.

Real Estate Investment Profitability in Greece

Investing in real estate with a fixed exchange rate can provide a currency return even if the prices do not increase.

However, it should be noted that real estate prices in Greece are still about 30% below their pre-crisis normal values, although they are on an increasing trend.

Aside from the benefits of a lifetime residence permit (Golden Visa) in Greece and free movement within the EU, even rental income from an real estate property purchased for investment purposes can provide an evident rate of return.

This situation, which is also valid for housing purchases and makes centers attractive, has alternatives (such as being close to universities or secondary centers). Moreover; In Greece, it is legal and widely used to rent a house from virtual environments such as Airbnb and booking. The purchase price / rental income ratio of smaller houses, which are the subject of such commercial activities in centers and touristic centers, is also a reason for preference. 

 What to Buy?

Investors often wonder whether it is better to buy a residence or a workplace in terms of rental income. The answer to this question largely depends on the location of the property. If the workplace is located in the center of a big city, it is preferred due to its low purchase price/rental income ratio. However, if the workplace is not located in the center, the tenant guarantee is not likely to be permanent in the long run, and periods of vacancy may decrease the total rental income.

Investors who are considering buying property often ask whether it is better to buy a residence or a workplace in terms of rental income. The answer depends on the location of the property. Workplaces located in the centers of big cities have a higher purchase price to rental income ratio and are therefore preferred. However, alternative locations such as those close to universities or secondary centers can also be attractive. Additionally, in Greece, renting out a house on platforms like Airbnb and Booking is legal and popular. For this reason, smaller houses located in touristic centers and city centers, which are suitable for such commercial activities, also have a favorable purchase price to rental income ratio and are a preferred option.

If your intention is to purchase a house or residential property solely for investment purposes, then it may be worth considering hiring professionals who can operate the property and provide all necessary services for this type of activity.

Real Estate Loans

To obtain a real estate loan in Greece, the borrower must demonstrate a consistent source of income generated from economic activities carried out within the country over the past three years. The loan amount can reach up to 80% of the value of the property in question, with an average interest rate of 2.75%. The borrower can choose from a range of payment plans, with durations of 5, 10, 15, 20, 25, or 30 years.

Lands

Greek laws allow non-residential structures like warehouses up to 5% of the total land area. For lands that are four acres or larger, permits are granted for constructing 120 m2 residences, and construction permits are mandatory for prefabricated buildings.

When selecting a site, one must consider the possibility of archaeological finds during construction activities in the centers of many old cities in Greece. Construction can resume after the movable artifacts are removed through archaeological studies, but if any immovable works are found, the state expropriates the land by compensating its current value.

Zoning plans made for lands in different cities and regions specify in detail the construction area ratio, number of floors, height, and annexes allowed. Buildings on the attic floors that do not exceed 1.5 meters in height are not included in the floor calculation, a common practice in many countries.

Residences and Workplaces

If a building in Greece is constructed for commercial purposes (defined as more than two constructions or sales by a person or company within three years), and the construction permit was obtained after January 1, 2006, the buyer is required to pay a purchase tax of 3% on the first sale of the building. However, if the building is subject to VAT, the buyer must pay 24% VAT instead of the purchase tax. Until 2018, this made contracting activities difficult and limited the construction of new buildings. However, a temporary regulation was implemented in 2018 to exempt this situation from VAT until a new decision is made. Currently, buyers are required to pay 3.09% purchase tax on all building sales, regardless of the date of the construction permit.

In Greece, it is mandatory for legal proxy lawyers to handle real estate purchase transactions.

Home Prices Index in Greece from the Beginning of the Economic Crisis to the Present

(01.01.2008 – 01.01.2021)

Taxation of Rental Income

In Greece, rental income taxes are calculated based on a progressive scale.

For rental income up to €12.000 per year, the tax rate is 15%. For rental income between €12.001 and €35.000, the rate is 35%. Rental income over €35.001 is taxed at a rate of 45%.

For example, a person who owns three flats, each rented for €400, with a total annual rental income of €14.400 will pay €2.640 in income tax.

€12.000 X 15% = €1800

(€14.400 – €12.000 = €2.400)

€2,400 X 35%   = €840   

€1.800 + €840 = €2.640 rent will pay income tax.

It’s worth noting that income tax is calculated based on the individual rather than the property. For joint and equal-share property, the per capita income will be half of the total income: The rental income tax is calculated based on the progressive scale, and if the properties are jointly owned by the spouses, the total rental income tax to be collected will be €2.160.

Joint ownership can provide Golden Visa rights to all partners, but each partner’s share must be worth a minimum of €250.000, except for spouses who can apply with a jointly owned property of that value.