Kefalonia Real Estate

Although buying land and property can be fairly straightforward if you are an EEC citizen, you will need to employ professional representatives and it will save you a lot of time and heartache if you look into the basic legal requirements regarding size of land and area on which you can build. It is essential to employ professionals due to the complex Greek inheritance laws resulting in jointly owned properties as well as the forestry laws which mean the land you have your eye on could well be designated as a national park!

Once a price has been agreed by both the property owner and the buyer, a pre-contract is prepared and signed by both parties at which stage a deposit is paid and confirmed on the contract. This is usually 10% of the purchase price and can be returned to the buyer if there are any legal problems with the title or other issues. However the deposit is not returned if the buyer wishes to cancel the sale for any other reason.

If you are living abroad you will need to appoint a power of attorney to act on your behalf. One of the first arrangements to be made when purchasing a property is to obtain a tax number which is then your identity number. You can do this by going to your local tax office but you will need somebody with you who speaks Greek (assuming that you are not fluent). Alternatively it may be a good idea to appoint an accountant as you will have a yearly tax return to complete once you have a tax number. So, either your accountant or the person you have given power of attorney to can obtain this tax number.

A title search is done on the property before the final contract is prepared and this is carried out by your lawyer or notary. At this stage the transfer of property tax is paid to the government and this amount is calculated as a per cent of the municipal value given by the system to each village. The value of the property or land given for taxation purposes will usually be lower than the price you are paying for the land or property. When the final contract is signed you will need to attend the office of a public notary unless you have appointed a power of attorney.

If you are buying land you should be aware of the many and stringent planning and building regulations. In the north of the island the regulations are strict to protect the forestry of the area as well as to maintain architectural consistency. It is absolutely essential to get professional advice from a certified engineer who can advise you on the maximum area that can be built on and the type of building allowed. All villages have a boundary. Building regulations vary according to the position of the land and sometimes land purchased can fall partly within the village boundary and partly outside the village boundary. Inside the village limits you can build on most of the land you purchase.
Laws on building are in the process of change so that certain areas which are 'outside' the village or town may well be included 'inside' the boundaries; however, outside the village limits the area needed to build could change form 4 strema to 8 strema. (A strema is a plot of land of 1000 square metres).

Currently, building in a village means that you are allowed to build up to 400 square metres. This could be 2 houses of 200 metres squared or 4 apartments of 100 square metres. This must not take up more than 70 per cent of the plot. There is a village planning zone which comes into play when the land is less than 500 metres from the boundary of the village. You will need to buy at least 2000 square metres to get a building permit unless you are building on a main road. All building has to be approved by the forestry department.

Outside the village boundary you need to have 4000 metres squared to be able to get a building permit unless it is on the main road when you only ned half this space. After approval from the forestry department you can build a maximum of 200 square metres.

Before commencing any construction, plans must be submitted to the city planning department who will issue a building permit but this can take between four and six months.

Be prepared to pay 2% of the purchase price to the estate agent plus 18% VAT based on the sale price
Transfer tax will be between 7 to 9 per cent which is based on the municipal value (usually less than the sale price)
Lawyer charges around 1.5% based on the municipal value
Notary 2.5% based on the municipal value plus registration fees

For more details, contact one of the Kefalonia Estate Agents listed on these pages

In a report from Mintel in October 2009 'Holiday Property Abroad - Impact of the UK homes market' it was found that 'Despite a global property crash the holiday home dream remains undiminished but consumers are now far more risk-averse. A quarter are concerned about being ￿ripped off￿ or about possible legal problems and belief in the investment value of owning a home abroad has also halved over the past two years.
Following years of exponential growth the overseas property market must now pick itself up, dust off its oversupply of holiday homes and reconnect with buyers more motivated by lifestyle factors than short-term money-making schemes, but warier than ever of the pitfalls.

In their November 2009 newlsetter they stated:
'Property abroad is home and dry - Plans and finances may be on ice, but the British dream of a 'place in the sun' has not thawed.
Mintel's exclusive consumer research reveals that as many as 6.5 million Brits, or one in five adults, dream of buying a property as a second home abroad in the future, a level of interest unaltered since 2007.

What we have found out:
The ￿place in the sun￿ dream has survived the recession ￿ almost 7 million adults are interested in buying property abroad, the same number as in 2007.
People have become more afraid about doing so, however ￿ over 12 million now think that it is ￿too risky￿, worrying about being ￿ripped off￿ or possible legal problems.
Around 270,000 households in England owned homes abroad in 2007/08.
An estimated 425,000 properties overseas were owned by UK residents then ￿ meaning the market more than doubled between 2000/01 and 2007/08
Over 60% of these homes are in the UK￿s five most-popular holiday countries ￿ Spain, France, Italy, the US and Portugal.
Potential buyers are most likely to be cohabiting couples, in ￿50,000+ earning households, living in London, Yorkshire/the North East or Scotland.
Get the full story
Purchase to Holiday Property Abroad now and stay on top of changing consumer habits, beliefs and attitudes.
To find out more about Mintel￿s new report, please email oxygen@mintel.com or call the customer support team on +44 (0)20 7606 6000.