The Greek real estate market is showing signs of emerging from a five-year recession with a significant amount of distressed assets, but also with plenty of interested investors looking for opportunities.
General economic conditions and the property market dynamics of the Region translate into a positive environment. Main drivers of the opportunity include:
The Greek real estate market is showing signs of emerging from a five-year recession with a significant amount of distressed assets, but also with plenty of interested investors looking for opportunities. The recent downward adjustment of “objective values”, used in the valuation of real estate for tax purposes (see Appendix to Chapter VI), as well as their future replacement by a new system based on market values, can be expected to foster a recovery in the real estate market. Lastly, the promotion and speeding-up of processes for public real estate development would substantially help reverse the negative investor climate, restore confidence and boost expectations in the Greek real estate market [Source: Bank of Greece website, Governor’s Annual Report 2015 (February 2016, Chapter V, Section 3)].
In the housing market, prices continued to fall in 2015 and in the first quarter of 2016, albeit at a weaker pace. On the basis of data collected from credit institutions, it is estimated that nominal apartment prices were on average 5.0% lower in the first quarter of 2016 relative to the respective quarter of 2015.
The commercial real estate market has shrunk considerably over the past years, while pressures to renegotiate and downward rent reviews persisted, especially for secondary retail, warehouse and nonprime office. Once the market returns to stability, tourist property and hotels, leased office spaces and prime office are expected to become the focus of demand for commercial property. At the same time, investor interest in large prime warehouse, which rose in 2014 but lost momentum in 2015, is expected to be renewed [Source: Bank of Greece website, Monetary Policy Report 2015- 2016 (June 2016, Chapter IV, Section 2)].
Please find more details about Greek Real Estate Market Analysis on the official website of Bank of Greece.
Beneficiaries of the right of entry and residence, for a period of five years, are:
a) third country citizens who own real estate property in Greece, either personally or through a legal entity of which they own all the company shares, provided the minimum value of the property is €250.000;
b) third country citizens who have signed a timeshare agreement (lease) – for a minimum of 10 years – for hotel accommodations or furnished tourist residences in integrated tourist resorts according to article 8, paragraph 2 of Law 4002/2011 (Government Gazette 180 Issue A), provided the minimum cost of the lease is
c) third country citizens who either reside legally, with a residence permit, in Greece, or wish to enter and reside in the country, and who have full ownership and possession of real estate property in Greece, which they have purchased before the enactment of the current law 4146/2013, provided that they had purchased the real estate property for a minimum of €250,000 or the current objective value of their real estate property is at a minimum of €250,000;
d) third country citizens who fully and legally own real estate property in Greece, the minimum value of which is €250,000, and which they acquired through a donation or parental concession. The right to a residence permit in this case can only be exercised by the receiver of the donation or parental concession.
e) third country citizens who purchase a plot of land or acreage and proceed to erecting a building, provided that the cumulative value of the land purchase and the contract with the construction company is at minimum €250,000.
f) third country citizens who have signed a ten-year timeshare agreement (lease), based on the provisions of Law 1652/1986. A time share lease, according to the provisions of article 1 of law 1652/1986 is the commitment of the lessor to grant, each year, to the lessee, for the duration of the timeshare, the use of the tourist accommodation and to provide to them the relevant services for the determined period of time according to the contract, and the lessee must pay the agreed rent.
g) family members (parents and children) of the third country citizens described above.
The government of Greece instated a procedure to obtain permanent residence permits (Golden Visa Program), which can be renewed every five years, for owners of real estate by third-country citizens, the value of which exceeds €250.000, adopting a friendlier stance towards those who wish to own real estate property in Greece. This residence permit for real estate owners is a new type of residence permit, for third country citizens who have received a Visa for the same purpose. The last positive amendments of July 2015 provide that a 5-year residence permit is also granted to the spouse, children and the parents of the Real Estate Investors. This right will be also given to the parents of the wife or husband, who is not included in the purchase contract.
According to the recent amendments (July 2015) of the Greek Investment Law, the investors now have the right to apply for both the long-term RP as well as the Greek citizenship, with the same conditions with other foreigners that have different types of Residence Permits. Real Estate Investors, their spouses and their parents may apply for citizenship after 7 years of residency in Greece. Their children may apply if a) they attend for 9 years any Greek school or b) they attend for 6 years a Greek secondary school or c) they attend a Greek University.
The following conditions must be fulfilled to receive a residence permit:
a) The real estate property must be owned by and be in possession of its owners.
b) In cases of joint ownership, where the value of the property is €250.000, the residence permit is only granted if the owners are spouses with undivided ownership of the property. In all other cases of joint ownership, the residence permit is only granted if the amount invested by each of the joint owners is at least €250.000.
c) If the owner has acquired the property through a legal entity, the applicant must own 100% of the company shares.
d) The residence permit is also granted in cases where the third country citizen is the owner, either directly or through a legal entity, of more than one real estate property with a combined value of at least €250.000.
e) The documented intention to own property should be supported by documentation which prove the financial capacity (e.g., certificate of an A-class certified bank or other recognised financial institution), which certify the existence of bank accounts or other mobile assets, such as bonds or shares, which can cover the cost of the investment of at least €250.000, and which certify the intention of the applicant to purchase the property (contract with a law firm or with a real estate office).
f) In the case of third-country citizens who have signed a lease of at least 10 years for hotel accommodations or furnished tourist residences in integrated tourist resorts, provided the minimum value of the lease is €250.000, the contract must require a single payment of the lease for the equivalent of the ten-year leasing of the property.
In all cases outlined above, the value of the real estate property will be determined
based on the value of the property, or the lease, indicated in the contract of purchase. The value of the property, according to law 4146/2013, is the amount stated explicitly on the contract which has been submitted for the purchase of the real estate property. The objective, or assessed, value of the property is not relevant, unless it corresponds to the amount which was, according to the contract, paid for the sale of the property.
The residence permit can be renewed every 5 years. More specifically, the residence permits may be renewed for the same duration and for as many times as the applicant requests. To renew the residence permit, the following conditions must be met:
The real estate property must remain in the ownership and possession of the applicant. The relevant leases must be ongoing. Absences from the country do not impede the renewal of the residence permit.