I have recently made an inquiry about a small property in Corfu. the prices initially look very reasonable, BUT there are so many additional costs to pay. VAT, Estate Agents, Notary, Transfer Tax (Stamp Duty) etc.
Now I could be wrong and I hope that I am but I calculated that a small place costing 44,000 Euros would actually cost out at over 61,000 Euros. thats a staggering 39% extra. Tell me its no so.
If anyone is interested I have built a small Excel spreadsheet so that all you have to do is put in the additional charge percentages and exchange and it works out the final price for you. Reality check time.
How do I do attachments in here?
Skorpidi
Message posted by Sailor on 23 March 2005 at 1:06pm - IP Logged
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Sailor
Your figures are very interesting, but not knowing the full extras on purchasing a property in Corfu, I could say if they are correct. No doubt someone will check this out for you in due course.
Unfortunately, unless it is on a web address, you cannot attach your Excel work to your post. May I suggest, that if anyone is interested, then ask for their email address and send the attachment via this means. Make sure they forward their email addresses via a PM.
Cheers.
Message posted by ecotrails on 23 March 2005 at 1:10pm - IP Logged
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That will be an interesting and compicated spread sheet since each property you consider would probably have different levels of taxes applied.
For instance usually both the buyer and the seller can come to an agreement as to the percieved value (not the purchase price) of the property and then approach the public notary, who on a good day might tend to agree and veer towards a reduced value.
I paid almost 10% for all the procedure including agent fees, lawyer fees, taxes, stamps and a building permit, which I thought was pretty good, but of course that depends upon the initial value that you put on the land/property you are considering buying and the skills of your lawyer.
Ian
Message posted by Skorpidi on 23 March 2005 at 1:24pm - IP Logged
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the form is not that complicated, but you are correct - the one thing that is awkward is the fact the sell price for the house and the valuation for tax can be different. I could make it account for that, but then it would get a tad more difficult for people to use.
I was told that you pay VAT on houses in Greece - is this correct?
Skorpidi
Message posted by Graham T-A on 23 March 2005 at 1:31pm - IP Logged
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Remember that the tax is paid on the official value of the property and not the actual price paid. This is normally much less than the actual price but also can be much more. If the property has a lot of land within town planning then the tax will be very high. If the house is over 50 years old then there is a reduction in the tax. If the house is close to the sea there is an increase in tax. The tax rates are set by the local coucils each year so it depends where your house is. There are so many things.
I would have thought that that was a lot though and is much more than we paid on a property cost much more. I will look up the figures and PM you later.
Message posted by Debbi on 23 March 2005 at 1:52pm - IP Logged
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I too was told to budget between 11 and 15% of the purchase price. Greece is quite expensive on this issue but I would be horrified to find it had soared to the levels you suggest. I'm not sure there is VAT payable on house purchases, not yet anyway.
Julia
Message posted by Dave and Kerry on 23 March 2005 at 2:45pm - IP Logged
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when we enquired as to costs etc we were told to expect upto 17% in total, as Graham has said the older the house the decrease in the tax payable....a case of look into everthing and consider everything, it seems the worst case scenario`s are either near the sea or lots of land in town planning!
Dave.
Message posted by Skorpidi on 23 March 2005 at 3:13pm - IP Logged
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I was told that the figures in BLUE were typical percentages - this is the spreadsheet I built based on what I was given. I must admit that 12 - 15% would be more like it - checked my figures and found a couple of errors - had to be some in there somewhere.
So if you ignore VAT the extras will come out at around 15%, this figure depends as Graham rightly said upon the taxable value set for the property. Which has many variables. If VAT is applied to the sale at 18% of the price paid then you are looking at a total of 33% (give or take a bit) more than the advertised price.
Property Purchase Costs
House Price
44000
Transfer Tax 1 (first 14.700)
1059.87
7.21%
14700
Transfer Tax 2 (remainder)
2716.11
9.27%
Notary Public fees
990.00
2.25%
Your Lawyer’s fees
550.00
1.25%
Estate Agent Fee
1320.00
3.00%
VAT
7920.00
18.00%
Total Cost of Purchase
58555.98
Additional Costs
14555.98
Percentage Uplift
33%
Exc Rate
Price in Pounds, Dollars etc
37004.51
0.631951
So who knows if VAT is applied for certain? Get rid of the VAT and the figures stack up, I was told it is applied but the wording of the email is a little ambigous as to exactly where!
Skorpidi
Message posted by Debbi on 23 March 2005 at 3:18pm - IP Logged
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There is a move by the Greek government to levy VAT in the near future but nobody seems to know whether this VAT would be on the whole purchase price or just the purchase tax or whatever (depends I suppose on how much left they have to find to pay for Olympics I guess).
Eco
Message posted by Skorpidi on 23 March 2005 at 3:23pm - IP Logged
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excellent news about No VAT- then the wording of the email from the estate agent was not clear - apologies if anyone got scared, but that said the calculator works and could be useful for knowing what the charges are.
I'll update it to make it calculate the charges payable for both the Sale Price and the Value for Tax and give an accurate total figure.
Skorpidi
Message posted by Skorpidi on 23 March 2005 at 3:42pm - IP Logged
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We are still in the thinking and hoping stage of buying a house. you had me sweating there. lol Like others I had picked up that fees etc would be around an extra 15% depending on age location etc. Thanks for introducing the topic Dave
Message posted by ecotrails on 23 March 2005 at 3:47pm - IP Logged
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If you want to tickle it a bit most agencies charge 2% not 3% and as has been said exchange is around 0.69; if you can get .63 then wait for my brown paper parcel with 500 grand in it.
Eco
Message posted by Skorpidi on 23 March 2005 at 3:50pm - IP Logged
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I was just trying to put something together that might be useful in pinning down what it all costs and to have a neat little tool to show it all. it actually works fine now, but the VAT bit had me going - scared myself!
Skorpidi
Message posted by Skorpidi on 23 March 2005 at 3:52pm - IP Logged
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the nice thing about the calculator is that all the figures in blue are variables - so you can make them whatever you need them to be and Excel does the rest for you.
Skorpidi.
Message posted by Dave666 on 23 March 2005 at 3:57pm - IP Logged
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That exchange rate is the rate that you get when buying pounds with Euros. The real rate is more like 0.69 when buying Euro with pounds. If only I could get anything like that rate. This would give more than 1euro 58 cents for a pound, a rate not seem for almost 3 years
Message posted by Tony on 23 March 2005 at 8:00pm - IP Logged
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Tony
Hi all,
We were in the process of buying some land in Acharavi last year, the price we were paying was €55,000 for 2 stremma, the tax man valued it at over €280,000 (can't remember exact figure) and no I haven't added an extra zero!
I hasten to add we pulled out of the purchase.
Message posted by Gillyp on 23 March 2005 at 8:17pm - IP Logged
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There are lots of threads on this subject in the Greek Life forum. It comes up quite frequently. It might be easier for you - if you had something particular in mind regarding house purchase - to start a new thread about the issue you want information on.
Julia
Message posted by Homesick on 23 March 2005 at 10:50pm - IP Logged
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Thanks for setting out the approximate additional costs - I have transferred them to my own Excel spreadsheet. I'm sure that they will prove useful as a rough rule of thumb.
I am still a bit confused by the Bank of Scotland exchange rate site you quoted. I have looked for myself and you are right about it showing a rate of 63.195p for 1 Euro - however, the BBC's site is showing a rate of 69.465p, which is what I would expect, and HIFX is showing the same as the BBC.
what can I say if Bank of Scotland want to give away free money - who am I to prevent them.
Eco, waiting for the £500K, anytime you're ready.
Skorpidi
Message posted by Corfiot Mag on 24 March 2005 at 7:44am - IP Logged
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Corfiot Mag
Sorry I didn't get into this thread earlier and correct a lot of misinformation before everyone got a fright!
Catagorically - there is NO VAT on property. Talk is that it will be introduced on speculative new builds, and perhaps on all property. However (and I hope the tax man isn't reading this) VAT will be levied on the objective tax value, not on the actual purchase price. In 90% of cases, this is lower (we have had cases when it has been as little as 10% of the price). Usually it's half to two thirds.
When buying off-plan, you only pay tax (VAT too when it's levied) on the objective value of the land, not the building as it doesn't exist.
There is a tax break of 70% on houses over 50 years old. The tax in fact is on a sliding scale depending on age of the property, with the 70% being the maximum discount. This brings the tax down to a third of what you would pay on a similar new property - and probably less since a new property would sit on a large plot of land. Note also that the Notary fees are based on the objective value, so the lower this is, the less you pay there (for a long time it was difficult to get the notaries to agree to put the objective value in the contracts, as they didn't like the reduced fees!). All these are very good reasons to buy an old property - and if it is restored, the original objective value STILL applies. This means if ever the government introduces Capital Gains Tax (which isn't valid at the moment), on resales there actually won't be anything to pay, even if you have restored, resold and made a profit! All very good reasons to go for an older property.
Every case is different, but unless the property is very very cheap, the taxes and fees are around 10-12%. Can go to 15% but not often. It is advisable once you've picked a property to get the lawyer or agent to run a calculation, though this can't be done until a topographic survey has been done to show the size.
Hilary
Message posted by Agni on 24 March 2005 at 7:59am - IP Logged
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Thanks for the explanation - if I have read your post correctly, it would make sense to budget for a maximum 15% on top of the asking price to account for fees and taxes. That way, I might be pleasantly surprised not to need it all.
Skorpidi
I spent 25 minutes at lunchtime trying to track down someone at Bank of Scotland who would own up to that tempting GBP for EUR exchange rate. The only answers I could get were that their tourist exchange rate was approximately 72p and their telegraphic transfer rate was approximately 71p.
No-one could explain the 63p rate that is (still) showing on the site you quoted. One person did suggest that it might be something to do with people who have offshore accounts but she wasn't certain.
So it looks like it is back to Moneybookers for me.
Stuart
Message posted by Bob and Wendy (Uncle Bob) on 24 March 2005 at 9:36pm - IP Logged
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Bob and Wendy
I dont know how relevent our experiance is to this discussion, particularly as it was 11 years ago, and things change.
But, as was the norm at that time, it was declared to the tax authorities, that the price we were paying for the property that we were purchasing, was somewhat lower than the actual price we were paying. And we duly paid, in advance, the correct amount of tax with that in mind.
However, a couple of days later in our solicitors office, 0630, with a skierto coffee to hand, we were informed that the tax office had decided that the true value for taxation purpose was in fact double what we had payed them, in addition they had calculated that the garden, being with road frontage was in fact building land and was taxed at the same amount as the house.
In our case this meant, if we agreed and did'nt appeal, that we would in fact be paying exactly the true tax on the agreed purchase price.
Make of it what you will.
Bob.
Message posted by Corfiot Mag on 25 March 2005 at 7:19am - IP Logged
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Corfiot Mag
Bob, I've never heard of this happening. Certainly not anything we've ever experienced. It was a while ago though, in the days of arbitrary changes in the law, and retroactive regulations applying!
Hilary
Message posted by Skorpidi on 25 March 2005 at 10:48am - IP Logged
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I know that my initial calculations were a little out of whack, but thats the whole point of the thread - the only stupid question is the one you did'nt ask.
I have taken on board what has been said and yes it would appear that a worst case budget taking tax and other costs taken into account of 15% should cover it.
I would like to get out of this is a budgetting tool that can be used by anyone who is interested in buying in Corfu or Greece that will show them where the money goes and be as near accurate as is possible. Nathan could put this on CTG if it proves useful.
Calculator Version 3. I have updated the calculator to take Hilarys comment about the age of the house and the tax break applicable into account. Have I applied the tax break correctly? What are the other breakpoints? Is there anyhing else that affects the price? If so let me know and I'll try and build it in.
I would really appreciate it if someone would test it in anger as it were - any volunteers?
Please remeber that what is below is an example - and not real life. All figures in BLUE are variables
Version 3.
Property Purchase Costs
inc Sliding Scale Tax Break
House Sell Price
42000
House Value for Tax
33000
Tax Break
Transfer Tax 1 (first 14.700)
317.96
7.21%
14700
70%
Transfer Tax 2 (remainder)
508.92
9.27%
Notary Public fees
945.00
2.25%
Your Lawyer’s fees
525.00
1.25%
Estate Agent Fee
1260.00
3.00%
Total Cost of Purchase
45556.88
Additional Costs
3556.884
Percentage Uplift
8%
Exc Rate
Price in Pounds, Dollars etc
31523.13
0.691951
Regards
Skorpidi
Message posted by Tony Chadwick on 25 March 2005 at 1:15pm - IP Logged
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Hi there, Thanks this has got me thinking! I bought an old house in hlomos at the top of a small mountain in the South, last year. It all happenned very quickly as I needed to get a lot sorted before I came back to England. The asking price was after Exchange was £12,000.00 But I ended up paying £15,000.00 I didn't know a Lawyer at the time so ended up using the same one as the seller. ( probably a bad move) I was amazed, He asked me if I wanted to do it legally or illegally regarding the Valuation for Tax purposes!!! I thought I don't want to take risks so did it legally. I would like to dig out the figures and put them in your calculator see what it comes up with. By the way I did everything by e.mail once back inb England, giving the Lawyer power of attorney to take the money from my account. I was extremely concerned if I'd done the right thing while it was all going on. But it all worked out in the end, aqnd I'm very pleased with the house as its got a lot of potential. Thanks again Tony
Message posted by Stuart on 25 March 2005 at 1:25pm - IP Logged
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This is really interesting and will be useful to a lot of readers as a general guide - thank you for starting the discussion off.
Reading Hilary's post again, I think she is saying that the Notary's fees are based on the taxable value of the house rather than the actual sale price. If this is correct, the fees would be 2.25% of 33000 euros = 742.50
Stuart
Message posted by seaangler (Chat Room Administrator) on 25 March 2005 at 1:25pm - IP Logged
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seaangler
Hiya tony..Do you think it was a good move giving your lawyer power of attorney with out consorting to you first no matter how good they are as i would like to be the first to know on and anything they do behind your back but i suppose that is of your opinion...chris
Message posted by ecotrails on 25 March 2005 at 2:02pm - IP Logged
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Giving your lawyer power of attorney does not give them the right to do as they please. They cannot for example take money from your account without first getting your approval.
In situations like we often find ourselves i.e. buying in Greece it is usually necessary to put a lot of trust in the professionals we use, this makes us naturally nervous but I haven't heard of any major disasters dealing with lawyers (perhaps you have), 'estate agents' are anoother matter.
The Greek idea of 'legal' and 'illegal' relating to objective property values is an established one and the words should not be taken to mean exactly what we (UK) think about them.
Research, understanding, trust, referrals and buyer beware all come in to property purchase.
Ian
Message posted by seaangler (Chat Room Administrator) on 25 March 2005 at 2:15pm - IP Logged
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seaangler
Hi Ian the question to your last post is i have and i have pm tony as to why regarding my mum and dad estate( the incompetence to act sooner than later)...chris
Message posted by ecotrails on 25 March 2005 at 2:21pm - IP Logged
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Thanks mate, I have just re-read Hilarys post and agree that the Notarys fee should be aligned with the Objective Value for Tax. I shall make the necessary adjustment. Greek House Price Calculator - version 4 coming. (GHPC - V4.0)
Anybody know what the house age to tax break points ratio is? Please let me know then I can then include them into the calculator - I have'nt shown that bit of the spreadsheet publically so far, but it is there.
Skorpidi
Message posted by Skorpidi on 26 March 2005 at 5:43am - IP Logged
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Calculator updated to make Notarys fee aligned with the Objective Value for Tax.
Does anyone know the following info
House Age and
Tax break Sliding Scale
over X years = ?
over X years = ?
Over 50 years = 70 %
Skorpidi
Message posted by Corfiot Mag on 26 March 2005 at 8:11am - IP Logged
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Corfiot Mag
Your figures look pretty good, but I do feel that the lawyer's fees are a little on the low side. In theory, yes, they and the Notaries are supposed to take a percentage, but in practise they have a sort of minimum fee. Otherwise they really wouldn't want to deal with people who are looking for properties under 20,000 (and there are plenty of sellers and buyers). This does depend on the solicitor and the notary so is a bit of a loose cannon in the calculation.
I forgot to mention the 5% additional discount you get when a house does not have central heating. If it has, there's 5% extra to pay. Sorry about that - I didn't realise how very diligent you would be!
Also, the agent's fee should be 2% not 3%.
Regarding Power of Attorney. About 90% of our sales take place like this. It is eminently sensible. Some people have almost lost their property because they couldn't get over for the contract, adn the owner has not been prepared to wait (we do have ways of handling this, but it is a pain). Many of the sales closed in summer, especially late summer, actually take place in the winter, so it is difficult and expensive to get over. Many times the date of the contract changes for various reasons, so a quick 3 day visit may be wasted.
It takes half an hour and about 40-50 euros to set it up, so it is absolutely worth it. Never had any problems. And we now have a new system whereby we send a copy of the topographic to the client in advance so they agree to exactly what they are getting, as often information on exact measurements isn't available when they see the property (locals, especially in the villages, WILL NOT pay for a topo until they have a definite buyer).
Sorry, I don't have the info on the exact sliding scale right down the line. This is a very complicated formula, and I need a calculator for even basic maths!
Hilary
Message posted by Skorpidi on 26 March 2005 at 9:40pm - IP Logged
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thanks for the reply - I'll build in the Central Heating percentage - does it apply to the Sell Price or the Value for Tax?
Any figures I put into the examples can be changed to whatever is appropriate, but what I would like to have eventually is a fairly typical/average example for potential house buyers to have have a look at.
I have just realised from reading your mail that I should also include a section on flights, accommodation and car hire (even if it is just reminder on the Calculator to cost this in) to get a true cost of purchase, typically/on average, how many times do people need to be present in Corfu to complete a purchase?
How long does it take to complete a house purchase? it sounds like it can be a lengthy process.
I have also heard on the grapevine that the size of deposit can have a bearing on the tax paid - is this correct?
Much Appreciated
John
Message posted by Corfiot Mag on 27 March 2005 at 8:38am - IP Logged
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Corfiot Mag
The central heating discount goes on top of the 70% or whatever.
The time it takes to complete depends on the paperwork. Most of the old houses have no deeds, and if there is no will either the solicitor has to do a search for all potential inheritors. This can take time. I would say that an average is about 2 months, but can go to 4 or even more if the buyer has to get a power of attorney in the UK (this is much more difficult than in Corfu - another reason to get it done here!).
The number of visits? Depends on how quickly the buyer finds the house they want. If people are in touch with us in advance on email, and using our website, we arrange a programme for viewing - depending on the areas and what they want to see, this can take about 3 days of solid viewings, but at least then it's all over and some sort of decision can be made. So providing the buyers find something they want, and if a power of attorney is done at the same time, only the one visit is needed.
There are some people who want to DIY to 'save the 2%' to the agent, and these are the ones who end up coming out here six times to look and thus spending thousands more than they would if the agent had organised everything to fit in one visit! As well as probably paying 1) over the odds because they are not aware of true property values 2) probably paying a walloping kick-back to someone or other anyway as an 'introduction fee'.
The deposit is usually 10% of the actual price and has absolutely no bearing on what tax is paid. Believe it or not, the government is quite happy to get its share based on the objective valuation. Regarding the legality of this, our solicitor's famous explanation is 'it's not illegal'. It is perfectly normal practice in many other countries as well, like France and Italy.
Hope that helps.
Hilary
Message posted by ecotrails on 27 March 2005 at 11:39am - IP Logged
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Hilary, thank you as always for the clear explanations of procedure, thank you less, as always, for your 'agent sell' although it provides amusement and I don't blame you for giving it a go.
We have been along this road many times so best not light the fire again but a couple of factual thoughts.
Following my Greek lawyers advice I got power of attorney, while in UK, without signing anything in Greece in less than one week; that involved an email, a visit to my local solicitor to witness asigniture (£5) and sending the signed document to London with an SAE and a cheque (£12). I would say it took me in all about half an hour of my time so where you get 2-4 months I don't know.
3 days of solid viewings with an agent then a decision, OK if thats what folk want to do, how about a cooling off period, how about visiting out of season, how about when back in UK thinking where was that boundary or are we sure that blasted olive tree wasn't in the way? I'm not disagreeing with what you say but saying there are other ways to do things also and they are not necessarilty going to end in disaster without an agent.
You can find shed loads of land/property for sale privately and an agent isn't necessary, but I agree that for most people an agent can smooth the path towards completion. Most of the plots I looked at were not in the hands of an agent, in the end I chose one that was, mainly because of the plot itself, not the comfort factor of an agent.
Think in UK, if you saw a house for sale privately, you went and looked and liked it, would the fact that it is not with an agent put you off, I think not, more likely you would be thinking about the saving of the agents fees.
As for your last paragraph, are you saying that the agent sets the value of the land at a fair price for the benefit of the prospective buyer....? The price asked is certainly not written in stone, you must make a personal valuation for yourself in light of your knowledge and understanding gained through looking at other properties and also take into account agent or no agent fees, backhanders etc etc. I've come to know of agents who regularly bump up the asking price by many thousands of euros, the whys and wherefores I don't care about, in the end I would only offer what I believed was a reasonable price, if others get caught out then more fool them,.... afto ine zoi, ... yes.
Ian
Message posted by Stuart on 27 March 2005 at 1:00pm - IP Logged
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I bought a house in France last year and, from what I have seen so far, the process in Greece is quite similar - including the practice of paying tax on a reduced value for the property. In my case, the place was quite cheap anyway, so there wasn't really any point in declaring a different value.
If I had done, I would be concerned about the Capital Gains Tax that will be payable on the profit when I come to resell later on. As part of the calculation, I could deduct any renovation costs from the profit - but only if I had used a registered tradesman to carry them out.
However - and this, as they say, is the rub - I would have to take the chance that the next buyer was willing to carry on using a reduced value, otherwise I would have to fork out more in Capital Gains Tax than I should do. In other words, what I would have gained in buying would only be lost later when I sold.
As everything else is so similar, I suppose it is too much to hope that Capital Gains Tax does not apply to resales of Greek property?
Stuart
Message posted by ecotrails on 27 March 2005 at 1:55pm - IP Logged
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Actually it isn't too much to hope; I am almost sure capital gains tax does not apply in Greece or at least does not affect most people, someone will confirm I hope.
Ian .
Message posted by Skorpidi on 27 March 2005 at 7:28pm - IP Logged
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I think I understand what you are saying here. So to make this work I need to apply a + or - 5% difference to the total purchase tax payable. Basically its a cascading discount - 5% on the 70 % correct?. Its important I get this bit right otherwise it will really blow the figures out. Version 5 coming up.
thanks - almost done.
Skorpidi
Message posted by Stuart on 27 March 2005 at 7:52pm - IP Logged
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Can I see if I have understood this bit correctly - if there IS central heating already installed, you only apply the relevant age reduction to the amount of tax paid but, if there ISN'T any central heating in the property, you get an additional 5% reduction to the tax payable?
Ian
No CGT eh? That will be one less thing to worry about - also, it means that there is more incentive to tackle your own renovations, rather than paying out unnecessarily for tradesmen.
Stuart (the tight old git)
Message posted by becky on 27 March 2005 at 8:58pm - IP Logged
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Version 5 of the Calculator is now done - it accounts for the central heating uplift/discount. Wait for this version its a lot cleaner and easier to use than V4. Nathan will update shortly.
Stuart, as I understand it from what Hilary has said there is a discount OR an uplift to tax payable dependant upon central heating being present or not.
Now I think we need to be very careful here - if the discount/uplift is applied directly to the Sell Price or to the Objective Value for Tax, then the effect is very significant. If it is only applied to the tax that is due (which is where I think it does go) then the effect is more or less important depending upon the age of the house, but not as significant.
i.e. an old house that attracts the maximum discount (over 50 years old - and requires renovation = 70% discount on tax payable) the effect here will be small - a 5% discount or uplift on tax that is already reduced by 70% is not a huge benefit, if its a newer house that still does not have central heating then the effect is bigger but not huge, still it'll pay for lunch!
Hilary - please correct me if I have got his wrong.
Please understand I'm trying to get this as right as possible - nearly there now.
Skorpidi
Message posted by Agni on 28 March 2005 at 7:53am - IP Logged
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Ver5 now added as the download, thanks for that Skorp
Nathan
Message posted by Corfiot Mag on 28 March 2005 at 8:23am - IP Logged
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Corfiot Mag
I'd just like to make sure thhat everyone is aware that while the Calculator is an excellent idea, it can't be taken as written in stone. There are lots of variables which may throw the whole thing out, like the notary working on a minimum fee rather than a percentage. The other problem in its workability is that it is very difficult to establish the objective valuation in advance - this is not something which comes as part of the property description! It is established with an extremely difficult formula which requires possession of a topographic survey (and usually this is not available until the last minute!), and the official breakdown of what the land tax is in that particular area (for obvious professional reasons, notaries and solicitors keep this very close to their chest). So unless a special request is made by the potential buyer, or the house is a resale in which case the tax value is known, it is unlikely anyone would know the tax value until the very last minute - so wouldn't be able to use the Calculator anyway!
Regarding Capital Gains, there is none on property now, but rumours that it will be enforced soon. But suppose you bought an old house and renovated it, then you are reselling - the objective tax value remains the same, as it is based on the SIZE of the building and land; its condition is not part of the formula. So on paper there is no profit to be taxed on!
Hilary
Message posted by Skorpidi on 28 March 2005 at 11:27am - IP Logged
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I agree with what Hilary is saying that what the Calculator spits out cannot be taken as concrete. (I am NOT an expert and I can only work with the information I am given) And it is probably the case that some information - maybe even vital information relevant to the sale will only be available at the very last minute. That will make a decision a more impulsive and emotional choice rather than a pragmatic one. Marry in haste and repent at leisure so to speak.
So, what is its purpose - what the Calculator will allow a prospective buyer to do is; to at least work through a few What-If price scenarios/models that will provide the ability to make the Go/NoGo decision possibly!without over-committing and breaking the bank. In addition to this I am also now trying to highlight some of those miscellaneous costs that I am being told about that just a week or so ago I knew nothing of. Remember the 5 P's.
See below for what it looks like right now. New update just sent to Nathan.
If there are any miscellaneous costs not accounted for please let me know and also remember that this is still Work In Progress.
Skorpidi.
Property Purchase Costs
inc Sliding Scale Tax Break
House Sell Price
44000
House Value for Tax
35000
Tax Break
Transfer Tax 1 (first 14.700)
1059.87
7.21%
14700
0%
Transfer Tax 2 (remainder)
1881.81
9.27%
Notary Public fees
787.50
2.25%
Your Lawyer’s fees
990.00
2.25%
Estate Agent Fee
880.00
2.00%
Central Heating (Yes +5) or (No -5)
147.08
5.00%
Total Cost of Purchase
49746.26
Additional Costs
5746.264
Percentage Uplift
13%
Exc Rate
House Price in £'s, $'s etc
34573.65
0.695
Miscellaneous Costs
Cost
Qty
Total
Local Tax Registration
150
0.695
104.25
Local Work Permit (ECA or EKA?)
?
?
?
?
?
Flights
500
1
500
Accomodation
250
1
250
Car Hire
100
1
100
850
Total Cost
35423.65
Message posted by Dave and Kerry on 28 March 2005 at 12:07pm - IP Logged
Legal Disclaimer
Ecotrails.....i think what Hilary was saying about the 2 to 4 months was for the solicitor to contact any brothers or sisters and family who may lay claim to a property that someone is buying and i suppose that is understandable, i doubt she was saying it takes that long for power of attourney.
Last year we found a property and asked an agent to do some digging for us to see who owned it, it did take about 3 to 4 weeks before we got a reply but the asking price was shall we say over the top! and the property is still derelict and for sale.
Dave
Message posted by ecotrails on 28 March 2005 at 12:42pm - IP Logged
Legal Disclaimer
This can take time. I would say that an average is about 2 months, but can go to 4 or even more if the buyer has to get a power of attorney in the UK (this is much more difficult than in Corfu - another reason to get it done here!).
To me it can only read that it can take over 4 months to get power of attorney in UK and it is much more difficult. I got it for £17 in UK in less than a week taking at most a half hour of my time and no travelling involved, what more can I say. I am not saying that to get power of attorney while in Corfu is necessarily a bad thing, Hilary has a wealth of knowledge, I am simply trying to put all the options and also do my bit to keep a level playing field.
Ian
Message posted by Dave and Kerry on 28 March 2005 at 2:51pm - IP Logged
Legal Disclaimer
If you liked the property you mentioned did you consider putting in an offer, it used to be expected, even an offer that seems ludicrously low might succeed. It seems true, and I don't blame them, that the owners of property in Greece are 'greedy' with their prices since it has become common knowledge that a lot of us daft Brits can be parted from our money very easily.
Ian
Message posted by Tony Chadwick on 29 March 2005 at 12:22am - IP Logged
Legal Disclaimer
Hi again all, I've just read all the posts here since my last one on 25th of March 05. Regarding backhanders etc. I did not go through an Estate Agent when I bought my house. When I first saw it I was told it was not for sale. I came back the following year and found out that the young Greek girl who had inherited it had changed her mind and decided she wanted to live lower down in the village and now the house was for sale! A friend of mine Paula has the house that backed onto mine, she speaks Greek, having lived in Corfu for 12 years. She spoke to her other neighbour a greek couple, who then went out of his way to introduce us to the Girl who owned the house. We came to an agreement on the price and then it all went ahead. It turned out there was another man in the village who had been told to let people know it was for sale, and he was adding allmost another third to a half in sale price. If we had met him with this first I would have been obliged to pay that price because he wanted his cut! As it was we gave the neighbour Costa who had introduced me to the owner a nice drink etc and he was very happy and pleased to help out. When the owner found out what the other chap had been bumping the price up to she was a bit put out and siad no wonder she had not sold it! I was also shown around some other properties by a local estate agent and from what she showed me, my opinion is that had she had my house on her books she would have doubled the price, mainley for her own profit. It seems to me that generally the greek people are a little wary of estate agents for this reason. It appears to me that the best way to buy is to be able to speak Greek or know someone who does, then befriend the locals in the area and you will get untold help (but be wary of the local greedy little buggers trying to make a huge backhander) Hope this helps, Tony......
Message posted by ecotrails on 29 March 2005 at 8:54am - IP Logged
Legal Disclaimer
The internet and forums like this are becoming powerful tools to help the unwary and I think thats probably a good thing. I assume that in no way do you discount the good work and services that an estate agent can provide although it wasn't for you, but its just that people need to be aware of all the possibilities and not be guided down a single road.
Ian
Message posted by Skorpidi on 30 March 2005 at 2:24pm - IP Logged
Legal Disclaimer
Found a website in Kefalonia the gives you the house buying process in plain English Ok, so these guy are advertising their services as project managers - but that all.
Your story sounds so similar to mine, the gentleman that acted as an agent took at least 30,000 euros of the table at the notorys office, right in front of me and my Greek friend who couldnt beleive his eyes either!! I cant prove anything, but there was back handers flying round everywhere. At the end of the day everyone got paid and we got our house, but it just makes you think.
Blake...
Message posted by Corfiot Mag on 01 April 2005 at 7:23am - IP Logged
Legal Disclaimer
Corfiot Mag
Eco... you were lucky about your POA. We have had two cases in the last year (the only ones involving POA from the UK), where it has taken MONTHS due to some Ministry having to OK it. Whereas in Corfu it takes half an hour and 40-50 euros.
Tony... Aren't you lucky to live in Corfu's prettiest village! I have exactly the same photo that's your avatar.
Unfortunately, people bumping up the price in this way is normal, but it is NOT the policy of proper agencies. You have to consider that practically EVERYONE will dabble if given the chance, and that's what these ones are doing. These people don't have the means to advertise, and rely on irregular passing trade, or they sidle up to people in bars. Since they may only sell a couple of properties a year, they indeed slap a hefty sum on top. This is what they will have to live for maybe the whole year. However, agencies which have a high turnover don't need to do this, and they should take the legal 2% from each side. The 'dabblers' are particularly rampant in the south, as most of the big agencies can't be bothered with that area (too far away and a dearth of expensive villas).
We actually do have a couple of lovely houses in Hlomos, and many in Agios Mattheos.
Hilary
Message posted by Terry and Julia on 01 April 2005 at 8:32am - IP Logged
Legal Disclaimer
We have just been to Corfu to sign the contract for a piece of land and a derilict house that we have bought near Arillas.
The asking price was 35300.00 euros the total charges on this were 4552.92 euros about 12.8%.The house was tax valued at 25200.00 so the tax was less than we thought.
We had allowed for 15% as 3 different agents told us that this was the top percentage that would be charged.
The tax value depends on where the property is (town planning or not) and also the age of the house/ruin.If the house/ruin is aged before 1955 the taxes are a lot lower and we also found out that a renovation licence is much cheaper than a new build licence a renovation licence is about 800.00 euros and a new build licence is about 5-6 thousand euros.Also with a new build you have to allow for the insurance for the builders on site this is down to you.
Clive
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