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Greek Real Estate Overview
The Greek economy is thought to have declined by 9% in 2020, primarily due to the global and significant impact of the COVID-19 pandemic; in 2020, the Greek economy was struck by closed borders and a pandemic, and the main decrease in income came from limited or restricted tourism, a major sector for the country. As the country gradually opened its border to covid-free foreign travel on May 14th of 2021, the economy through the tourism sector has been somewhat revived, where the European Commission predicted a GDP growth for Greece, up to 4.5% in 2021 and 6% in the first quarters of 2022.
The Greek Real estate in Greece has been driven by and was accelerated by the COVID-19 pandemic, furthermore and, most importantly, the increasing interest from foreign investors, either by Europeans relocating to Greece or via Non- Eu nationals relocating or purely investing in the country to take advantage of the residence via investment scheme (The Greek Golden Visa), which remains a leading program in Europe.
The Key points to mark in 2022-2023
Suspension of the 24% VAT on new properties, likely to be extended until at least 2024
Purchasing your real estate as an individual in Greece leads to the mandatory payment of a transfer tax. During the purchase stage buyers are required to settle an amount of 3.09% on property value (property transfer tax), should the property have a construction permit before the 1st of January 2006, alternatively, the transfer tax is 24% VAT in case the property has a construction permit issued after the 1st of January 2006. At the moment and until December 31, 2022, the 24% VAT on new construction is suspended. The current elected government is endorsing domestic and foreign investments to revive the local growth and economy. The mentioned tax reform was introduced on new properties built after the year 2006, which is still in effect, and it will be valid until December 31, 2022, according to (article 6, L.2859/2000). There are discussions to extend it to 2024, however, up to the date of publishing this article, the suspension is valid until 2022.
Renewed Investment Interest for Commercial Real Estate
According to the Hellenic Statistical Authority (ELSTAT) data on construction activity, on an annual basis, particularly high growth rates are recorded in the number of new permits for the construction of offices (52.2%) and shops at (68.3%), while very high growth rates are recorded in almost all commercial real estate, both in terms of a number of new licenses and volume, indicating growing demand and a trend of renewal of present assets.
A Burst of Construction Activity in Greece
Construction output in Greece rose 5.7 percent from a year earlier in the fourth quarter of 2021, accelerating from an upwardly revised 4.4 percent growth in the third quarter. Building activity soared 22.7 percent (vs 26.9 percent in Q3), and civil engineering works declined less (-3.9 percent vs -8.2 percent). On a quarterly basis, construction output jumped 37.6 percent from a 4.4 percent rise one quarter earlier.
Trends of The Greek Real Estate Markert in 2022
- Athens remains the top destination for real estate investment in Greece
- South Athens is trending as the most attractive destination for new developments in Athens.
- Crete is the first option for foreign investors seeking the islands, the location still provides good price margins compared to the Ionian Islands. An increased interest is noticed from American investors to purchase property in Greece and obtain a Greek Golden Visa.
- The highest asking prices of residential properties for sale in Greece continue to be in the Cycladic islands such as Santorini and Mykonos.
- The rental property market is on a steady increase
- Digital (virtual) house hunting remains a trend and continues into 2022, started by the pandemic and still valid for 80% of investors.
- Real estate remains the most attractive Golden Visa route, compared to the Term Deposit route.
Navigating Your Greek Real Estate Research, Tips:
- Engage your law firm (legal representative) before house hunting
- Get familiar with the market before actively shortlisting
- Clarify your housing needs vs. wants
- Find a responsive and knowledgeable real estate agent
- Be patient
- Be decisive and move quickly (view, then take a day or two to decide whether to make an offer)
- Don’t Linger on your Dream Home, have two final options
- Trust the process
At Varnavas Law Firm, we have worked with hundreds of satisfied families, contact our team at [email protected], and you will be briefed about our services and scope of work. Alternatively, you may fill in our contact form.