Kosmidis & Partners, solicitors
Partnering international businesses in Greece
Real Estate Property in Greece: An Overview
Real estate property in Greece is divided into two main categories: real estates outside city building plans and real estates within city building plans.
Real estates outside city building plans are mainly divided into two further categories: agricultural land and land allotted by lot. Land allotted by lot refers to real estates granted by the Greek State as agricultural lots for the agricultural resettlement of farmers who did not own land. This system of allotment was introduced in order to cater for the incoming arrival of refugees into Greece from 1922 onwards, which, in turn, gave rise to the need to make use of such plots of land with the goal of developing the agricultural economy. Land allotted by lot is frequently larger in size and one of its most significant characteristics is the, in principle, legal prohibition on dividing the land into smaller parts.
Agricultural land refers to real estates outside city building plans which are inherently used for agricultural exploitation and for the production of natural produce.
On the other hand, real estates within city building plans are commonly known as building sites. A building site consists of any ground which is within an approved street plan or within the boundaries of a settlement, even if the latter does not have an approved street plan.
In contrast to other legal systems, Greek law generally permits the erection of buildings in real estates outside city building plans. Depending on the type of building which is to be erected and its intended use, there exist corresponding town planning provisions which allow for a certain degree of erection of buildings depending on the size of the real estate in question. For instance, in principle, it is allowed to erect buildings of up to 200 square metres on agricultural land of 4.000 square metres and above.
Naturally, far more flexible town planning provisions apply in the case of building sites due to the fact that their innate purpose is the erection of buildings.
Two key concepts which must be taken into consideration when aiming to acquire real estate property in Greece are those of 'conformity' and 'fit for building' (in Greek 'artio' and 'ikodomisimo'). A real estate is deemed to be conforming when, in accordance with its area and dimensions, it is possible to erect a building or buildings based on what is permissible according to legal specifications .A real estate which is fit for building is one that boasts the appropriate features required to achieve the best aesthetical, constructive and financial exploitation. As a result, all the real estates which are fit for building in respect of size and dimension may not be fit for building but, in order for them to be deemed fit for building, they are required to be deemed conforming.
Choosing the right Real Estate
Choosing the right real estate mainly depends on the particular needs of the natural person/legal entity in question and on the desired use of the real estate. A real estate may be used as a residence, for private use, for agricultural use, for professional use or for use as a business.
The first category (i.e. real estates used as a residence) includes real estates within city building plans, which may either be single house residences or apartments. The erection of multi-story apartments with flats within the cities is commonplace in Greece and the value of the flats on higher floors is usually greater. Since the erection of buildings outside city building plans is allowed, real estates outside building plans may also be used as private residences. Nevertheless, a very important factor is choosing the most appropriate real estate, which should be conforming and fit for building. This is mainly determined by the real estate's size, dimensions, form and by other further minor factors.
Both land allotted by lot and agricultural land can be used for agricultural purposes. Real estates which are to be used for agricultural functions are usually cheaper. It is worth mentioning that if the investor is not directly interested in being situated near financial centres (usually large cities), he/she may find a sizeable real estate at a considerably low price.
Real estates used for professional or business-related purposes, can be found either outside city plans or within city building plans, depending on the activities and the type of business of each particular investor. Such activities or types of business may include:
- offices in multi-store buildings
- real estates outside city building plans, upon which commercial shops, factories, manufacturing areas, storage areas or shopping centres (malls) will be built
- real estates suitable for the installation of machinery producing energy from renewable sources (i.e. solar panels, wind power generators etc.)
- real estates suitable for haulage activities (logistic centres etc.)
Finding the right Real Estate
The use of a real estate agent is of paramount importance in the search for the most appropriate real estate for every business, investor or individual. Estate agents in Greece operate with a special permission and normally receive a salary worth 2% of the purchase price. In the case of searching a real estate for use as a private residence, it is not unusual for individuals to carry out their own personal hunt in the area which interests them, since in Greece, FOR SALE ads are a common sight.
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