With Greece’s economic recovery and new preferential tax policies, investing in greek real estate has become increasingly attractive. The low property prices, high rental yields, visa-free access to EU and golden visa make greek real estate stand out. However, foreign investors need to understand the market risks and laws when investing in greek real estate. Proper due diligence and seeking professional help is key to avoiding pitfalls and ensuring a smooth investment process.
Greece’s economic rebound creates opportunities in greek real estate
The Greek economy has been through a major crisis and recession over the past decade. However, strong economic reforms and fiscal discipline have led to a rebound in recent years. GDP growth turned positive in 2017 and unemployment has fallen sharply. With improving economic fundamentals, greek real estate values remain far below pre-crisis levels. Investors can capitalize on the upside as the market recovers. But risks such as taxation changes need monitoring.
New tax incentives make greek real estate investment more cost-effective
The Greek government has implemented several tax incentives to boost real estate investment. In 2019, VAT was lowered to 13% from 24% on new construction, making property purchases cheaper. The government also exempted refurbishment costs from VAT until end 2022. Dividend and corporate taxes were reduced. Importantly, property taxes were cut 10-30% in 2019 and a further 16-23% in late 2022 for low and middle income owners. These tax savings directly boost yields for investors.
High rental yields but factor in seasonal demand and taxes
Greek real estate can generate high gross rental yields of 5-7% due to low property prices. However, net yields are lowered by taxes like the Enfia property tax. Investors must also consider seasonality of tourist demand, especially for holiday homes. Gross yields may seem high but occupancy outside summer is much lower. Maintenance costs and periods of vacancy should be accounted for in yield estimates.
Understand regulations for foreign buyers and golden visa eligibility
While EU citizens can freely buy property in Greece, non-EU buyers may need permits. To get a golden visa through real estate, a €250,000 property purchase is required. For some locations and distressed assets, investors can negotiate prices below €250,000 but permits may be denied. Strict due diligence on regulations, taxes and ownership rights is critical before committing funds.
The recovering Greek real estate market offers attractive yields and upside potential. But foreign investors need expertise on regulations, taxes and demand drivers to avoid risks. Hiring local legal advisors and real estate consultants ensures a smooth investment process.