Few islands on earth can compare with Crete, a Greek island (the country’s largest) that’s got history older than Greece itself. Its remarkable history plus stunning landscape and almost year-round sunshine are just some of its selling points. But this is not to say that Crete is all glitz and relaxation without so much hard work. Compared with the rest of the country, its economy is diverse and relatively robust. Its per capita income is much higher than the Greek average, while unemployment is at approximately 4%, about half of the national average.
As with many Mediterranean islands, vineyards and olive groves are a common sight in Crete, making its wines and olive oil famous all over the world. Its dairy industry makes some notable products as well, such as the island’s specialty cheeses mizithra, anthotyros and kefalotyri. And Crete has the honour of hosting nearly a quarter of all visitors to Greece. And who can blame them? The island offers plenty of attraction – from the ruins of the Minoan palace of Knossos to the Venetian fortresses of Rethymo, and from the Byzantine monasteries to the cave that is the legendary birthplace of Zeus – it is safe to say that it has everything Greece has to offer.
Market overview As has been mentioned many times previously, Greece’s vacation or holiday home market is attractive owing to the country’s position as a top tourist destination. In fact, according to Liz Rowlison of A Place in the Sun publication, Greece is a consistent performer on the wish lists of British nationals looking for second home abroad.
However, mention the word ‘Greece’ and most investors will turn the other way – the country is in the grip of a debt crisis (which for many months now is imperilling is membership to the eurozone), no sector of its economy has been spared.
In response to the fiscal crisis the government plans to increase property taxes, which has forced many to sell to avoid new taxes. Some have even allowed buyers to have steep discounts. And with such high inventory of homes in the market, the time is again ripe for foreign investors to snatch attractive properties at discounted rates.
Indeed farsighted foreign buyers are purchasing houses in Greece so that they can then, in turn, rent or lease these properties to other individuals. Because of the large number of people who travel to Greece (and to Crete, specifically), this type of property investment is proving to be very profitable for a significant number of foreign nationals. The best-known areas may be too touristy for some (although there are plenty of foreign nationals, British predominantly, who have gone there to set up business that rely on the tourist trade), but there are villages further inland that are very cheap, have access to picturesque beaches and are largely devoid of holiday-makers.
Crete is subdivided into four major regions, each with a distinctive character. Chania on the western side is dominated by the impressive White Mountains and its famous National Park, which occupy the largest part of the region. The region provides tourist services and activities of all kinds, satisfying all the choices, and its major city, also named Chania, is famous for its Venetian port.
Located between the White Mountains and Mount Psilorítis is Rethymno, the island’s smallest region. It has become synonymous with mountainscapes, beaches, Cretan lyre melodies, monasteries and monuments, mountain villages and luxurious holiday resorts. The largest and most densely populated region is Heraklion, nestled picturesquely among Mount Psiloritis and Lasithiótika mountains. A bustling city, its capital Heraklion (and the island’s major city) is the main stopover of travellers who Crete.
The least mounatainous of the Cretan regions, Lasithi is home to many ancient ruins, such as the Minoan towns of Vasiliki, Fournou, Korifi, Pyrgos, Zakros and Gournia, and the Doric towns of Lato and Itanos. Its capital is Agios Nikolaos.
A buyer’s guide
Before anyone (a citizen of Greece, the EU or another foreign national) can purchase real estate in Greece, he or she must first obtain a tax role number, which is known in Greece as AFM. This number is easy to get and can be obtained at any tax office in the country. Citizens of Greece or another EU nation need only show their government-issued ID card. Citizens of other countries, on the other hand, must show a passport to obtain the AFM.
Greek authorities, as with any government, are very concerned about where money is obtained to purchase a property in Greece. As a consequence, a foreign national interested in buying property in Greece will need to obtain what is known as a ‘pink slip’ for wire transfers of money from abroad. If a purchaser cannot, he or she must demonstrate where the money is coming from, and Greek authorities will consider any money wired into the country as income and will tax it accordingly. In addition, money to purchase real estate in Greece must come directly from a Greek bank and bank account. Therefore, before a person can actually make a purchase of real property in Greece, he or she will need to open a bank account. Provided that a person has proper documentation, and provided that a person has the pink slip to demonstrate the origin of the money involved, it is not difficult to open a bank account in Greece.
A public notary – who is an independent official – oversees the real-estate purchase process. Once an offer is made on the property, a preliminary contract is drafted. A deposit of up to about 10% is placed on the property at the time this agreement is executed. (The deposit is not refundable unless the seller somehow disrupts or ends the sales process or unless clear title to the real estate cannot be had in the time allotted under the preliminary contract.) After the buyer obtains his or her financing, and the seller satisfies his or her own obligations under the preliminary agreement, a final contract is signed between the parties.
With the execution of the final contract, the ownership of the property will be conveyed legally to the buyer. The final contract is signed before the public notary. In addition, according to Greek law, the real estate agent (or agents) involved in effecting the sale must be present for the signing of the final contract.
Capital gains tax, which is charged as a percentage of the property value scaled for length of ownership and will be between 10% and 25%. It is usually exempt when using the proceeds to move from one home to another in Greece. The fees for buying real estate in Greece total are between 15% and 20%. Purchase tax is charged depending on the property’s value at between 9% and 11%, in addition 2% is charged on top for properties located in cities. Land registry fees should be about 0.3% of the assessed value plus a small sum for stamp duties and certificates. The real estate agent’s fees are usually paid by the vendor. Property tax in Greece is generally quite low, from 0.25% of the property’s declared value annually. This will cover local services. A community tax of around 3% of the property transfer tax is paid to the local municipality for general public services.
What to buy
Variety best describes Crete’s holiday home market. Whether you are after beaches, archaeology, nightlife, mountains, wildlife, flowers, hiking trails, gorges, water sports or anything else, there is certainly something to suit your preference.
The Litsarda Villas Crete property development (www.caversham-barnes.com/litsarda-villas.php) located to the west of the island comprises nine individually designed homes in location with panoramic views of Crete’s White Mountains and Souda Bay in the Mediterranean. Located 40 minutes by road from Chania International Airport and 75 minutes from Heraklion Airport, the development is close to the heart of the village of Litsarda and 2 kilometre from shops, bank, post office and healthcare facilities in the town of Vamos. Prices of the properties still available at Litsarda Villas start at €269,900 (US$354,096) for a two-bedroom villa, including a self-contained lower ground floor with the potential to create three additional bedrooms. The properties are supplied fully furnished and equipped, so prices include everything from beds to bottle-openers.