Property investment in Greece

Greece, now more than recent years, is a popular country for international investors looking to create or expand a property portfolio.

Its thriving tourism industry brings in 30 million high-spending visitors every year. While memories of Greece’s debt crisis of 2015 kept property prices down for many years, since the pandemic they have been recovering.

So, with the potential for rental income and capital growth, how should investors approach Greece’s property market?

Successful property investment in Greece

To build a profitable property portfolio in Greece, there are a few things you can do to better your likelihood of success:

• Research the market: Look into property types in popular areas and compare rental yields to discover the most profitable type of home to rent out.
• Budget: Set your budget and speak to an independent financial advisor to create a plan for your investment. They can help account for all costs, too, like taxes, legal fees, maintenance taxes and property management fees if you’re considering renting.
• Legal advice: An independent lawyer can guide you through the process and ensure all legalities are handled correctly. This is especially vital given new rental rules.
• Property selection: Choose properties that align with your investment goals. Are you seeking long-term capital growth or rental income?
• Diversity: Consider diversifying your portfolio to help spread risk.
• Regular review: It is wise to regularly review your investment portfolio and assess the performance of each property to align with your long-term goals.

The Greek property market

Property prices in Greece have been seriously on the rise since the pandemic. This is down to strong demand from international buyers, some high-quality new buildings going up, and continued economic growth in the country.

When adjusted for inflation, urban house prices rose by more than 7% year-on-year in the first quarter of 2024. Still, house prices are much more affordable than that of the UK, US or even other expat-friendly sun-kissed countries like Portugal and Spain. The amount that foreign buyers are willing to invest is on the rise too. During 2023, the total value of foreign purchases (which account for about 80 – 85% of all real estate purchases) reached an all-time high of €3 billion.

Rise of developments in Greece

Greece has received a lot of attention from foreign investors, and not just in residential property. Crete is getting a new airport and there are eleven road projects due to be complete by 2030. On the southeast coast of Athens, a disused airport is being transformed into the 650-acre Ellinikon Metropolitan Park, which will include luxury properties, a marina, a shopping centre and more.

Unemployment is down, business confidence is up, and overall, there seems a new pride in Greece that is giving impetus to investment.

The Greek golden visa: the residency-by-investment scheme

Many investors are drawn to Greece because of its golden visa, a residency-by-investment scheme aimed at “third-country nationals”, i.e. friendly non-EU countries such as the UK, US and Australia. The most popular route is to purchase a property worth a certain amount, and then, be able to stay in Greece for five years and enjoy visa-free travel in the Schengen Area. This has proven popular with buyers from China, Israel, the US and the UK.

The rules surrounding the golden visa differ across the country. In Attica, Thessaloniki, Mykonos, Santorini and all islands with a population of more than 3,100, you must purchase a property of at least €800,000 to qualify. In all other areas, you can qualify for a golden visa with a property of just €400,000. In some cases, such as a restoration project, you can qualify with a property worth just €250,000. The Greek golden visa has undergone changes in the last year, so it’s best to check with your lawyer what applies to the area you are interested in buying in.

Short-term rentals in Greece

Many investors are keen to take advantage of Greece’s status as a holiday hotspot by renting out their property to holidaymakers. In recent years AirBnb has boomed, with Crete and the Cyclades islands seeing the greatest increase. In 2019, the average rental price was €122 and in 2023, €191, an increase of 57%. While rentals can be extremely lucrative, you’ll need to be aware of the following:

• If you rent out one or two properties, you must pay an accommodation fee (€1.50 per booking).
• If you rent out three or more properties, this is classed as a business activity. You must pay 13% VAT and taxes and fees of a hotelier.
• Stays of longer than 30 days can no longer be booked through Airbnb and are classed as a long-term rental.

To rent out a holiday home, your property will need an EOT licence, ensuring its suitability. This regulates room size and pool safety, ensuring a high standard for those that stay in your property. You will also have to register your property at the tax and pay tax at the following rates:

• Up to a rental amount of €12,000: 15 percent
• Between €12,000 and €35,000: 35 percent
• More than €35,000: 45 percent