1.How is a property transferred?
According to the law, the transfer of a property requires two things: firstly, the transfer agreement to be made by a notary (with both parties or their authorized lawyers present), and secondly, the transfer contract to be recorded in the mortgage registry of the place where the property is located (or in the relevant Land Registry if applicable in the area). Additionally, one must consider the fee of the notary (which is fixed by the Notary Code depending on the stated value), the expenses for the contract transfer (0.475% of the stated value in the transfer contract plus VAT 24%), as well as the lawyer’s fee if they represent during the contract drafting (as determined by the Lawyers Code) along with the Real Estate Transfer Tax (RETT).
2.What if the property belongs to multiple owners?
In this case, the unanimous consent of all co-owners is required, while the provisions of the Civil Code regarding co-ownership apply. Specifically, all co-owners must agree to the sale of the property, and if one of them refuses without justifiable reason or clearly opposes the interests of the majority, they may be compelled by the court to give their consent.
3.What happens with the components and annexes of the property?How are they transferred?
It is necessary to distinguish between them: the component, being an integral part of a property due to its close connection with it, cannot be transferred separately and thus follows the fate of the property itself. On the contrary, the annex, being less closely connected with the building itself (if there is one), may not be transferred with it, either separately or at all. Usually, the sales contract specifies which items beyond the property itself the buyer will acquire ownership of, in order to clarify whether they are components or annexes of the property.
4.I want to donate a property to my child. How can this be done legally?
In practice, there are several ways to achieve this, the most common being donation and parental provision. However, due to the high tax often involved, donation is often rejected by many as a favorable solution, and attention is focused on parental provision, which we will also focus on. Indeed, under, parents can make parental provisions to their children for two reasons: firstly, for the creation/maintenance of economic and family autonomy, and secondly, to start/continue their professional career. If the parental provision is made for another reason than these two, it will not be considered as such, but rather as a donation with all that entails. It is worth noting that since it involves a property, the contract for parental provision must be made with the formalities required for the transfer of property (i.e., with a contractual document and transfer in the relevant mortgage registry or land registry).
5.How is parental provision treated for tax purposes?
At the time of writing these lines, parental provision for transactions between individuals belonging to the first degree, i.e., between spouses, parents and children, and grandparents to grandchildren, falls under the tax-free threshold of €800,000. Therefore, given that we are talking about a property, if the value of the property being provisioned does not exceed €800,000, practically the parent (or any relative making the provision) will not be required to pay tax for the transfer. However, it is crucial, according to the letter of the law, that the transfer takes place after October 1, 2021, to fall under the provisions of the tax exemption.
6.What about the fictitious prices in property contracts?Are they valid?
This is an issue that has occupied the Greek courts for several years, as almost 8 out of 10 contracts transferring properties or rights therein state significantly lower prices than the actual ones to avoid high taxation on the relevant contracts. The Supreme Court of Greece, in order to prevent all these contracts and the relevant transfer acts from being considered void and risking the security of transactions, accepted that in this case Law 181 applies and not Law 180. In practical terms, this means that the contract for the transfer of the property is and remains valid only for the amount stated therein, and therefore the undisclosed price, if not paid by the buyer to the seller, cannot be pursued either through the provisions for unjust enrichment or through any other legally suitable means, precisely because this property movement (of the undisclosed price) is not based on any existing, valid legal reason (or at least on any legal reason that ceased to operate for any reason).
7.What are the encumbrances of the property?When do they ”follow” it?
A property may have encumbrances (such as a mortgage note or even a mortgage). In addition to these, there are personal encumbrances such as granting a right of passage from the property owner to a neighbor (=allowing them to ‘pass through’ the property). In general, an encumbrance is considered to be a third-party right concerning the property that restricts/excludes its use by the owner. What matters here to emphasize is that although a property can be transferred normally, and the new owner can acquire full ownership, if the property bears encumbrances, they will ‘follow’ it even after the transfer (=if the lender who has registered a mortgage on the property wants to foreclose it, then they can do so normally, and thus the new owner will ‘lose’ the property and moreover without being able to do anything legally). For this reason, it is useful to essential to check the legal titles in the portion of the property maintained in the relevant mortgage registry/Land Registry BEFORE the transfer. Thus, the new owner will be able to know if the property is burdened by seizures/mortgages and other encumbrances to avoid proceeding with the purchase, or to negotiate the price.