We’ve finally become the owners of a little piece of mainland Greece.
Some day soon this will be the view from our terrace
It was months ago when we first viewed the plot of land we hoped to buy. Early disappointment ensued when the seller took it off the market for reasons to do with EU grants, retirement and farmers’ entitlements, which we never really got to the bottom of.
So a few months later when it came back on sale we didn’t get our hopes up. We paid our deposit and waited for the bureaucracy to take its course: surveys, checks, legal searches etc., with the knowledge that things could go wrong at any stage, or the seller could pull out again. We greeted progress updates calmly, knowing that in Greece, plans don’t always come to fruition at the time, or in the way, expected.
In early May we were told things should be completed ‘in a couple of weeks’, which we translated to a more realistic time frame of the end of May. At the beginning of June we made a first payment towards land taxes and legal fees, and were told everything should be completed on Friday 4th. Then early on Friday morning we heard there could be a delay until the middle of next week.
Why? Firstly, the European elections being held this weekend meant the Notary might not be available for other duties; and secondly it is Pentecost (Holy Ghost Day) on Monday, thus a public holiday.
So we were pleasantly surprised to find ourselves in the Notary’s office at noon on Friday having documents read out to us by a translator, and signing paper after paper that sealed the deal.
All in all a painless process, and an interesting one.
Land sold in Greece has its value assessed by the relevant government department. Value is based on factors such as whether a site has access to services such as electricity, water and sewage; how close it is to a town or village; and how close it is to the sea, and doesn’t necessarily bear any relationship to the price being paid for the land.
Our plot lacks water and electricity, is exactly 1km from the village boundary, and several km from the sea, although with excellent views both across to the mountains of the Mani and out into the Aegean. We’re probably no more than 10 minutes from a sandy beach. Takingall these factors into account, the valuation is significantly lower than the price we’re paying.
Our agent has recently sold a piece of land which, because it’s in quite a remote area without electricity, water or decent roads, was very competitively priced. However the valuation department thought otherwise. The plot is close to the sea – not to a beach or an accessible area of coast, but to rugged cliffs. Unfortunately this type of subtlety isn’t taken into account in land valuations: close to the sea means close to the sea, and that is a factor that increases the valuation. In this case, the official valuation is twice what the land cost.
A curious system applies whereby it is up to the buyer to decide what to officially declare as the price they paid for their land. Anything between the official valuation and the actual price paid can be declared. The usual guidance is to declare a price a little above the valuation, but below the actual purchase price. It’s a swings and roundabouts situation: land taxes are calculated based on the declared price, so the lower we go, the less tax we pay. But if there turns out to be a problem with the land, we can only get our money back up to the amount we have declared.
So the choice is between paying more taxes with a guarantee of getting all your money back if things go wrong, and trusting that the lawyers have done their job properly, the seller’s legal declarations (free from mortgage, right to sell etc.) are true, and no-one will come out of the woodwork claiming they actually own the land, not the seller. Happily for us our real estate agent guarantees to refund all our money if anything goes wrong, so we’re able to take advantage of the system to legally save several thousands of euros in taxes.
But those other purchasers are in a less fortunate situation. They have to declare the full purchase price of the land and then have to pay taxes on twice this amount, despite not actually gaining any benefit from their proximity to the sea. If anything goes wrong the whole amount they have paid would be recoverable from the seller, but not those additional taxes. A good reason to buy land just a few km from the sea.
Now we have to make a final decision about exactly what to do next. Watch this space…
