Pitfalls of buying property in Greece

It is generally safe to buy a property in Greece as an overseas buyer, so long as you take certain precautions.

While there are legal protections for buyers, there are still some financial, legal and tax risks that you should be aware of. There are also some less obvious risks associated with the location and type of property.

With the right guidance and experts on your side, however, these potential pitfalls of buying property in Greece can be avoided.

Financial pitfalls – currency risk and your budget

Unless you are buying from a country that uses the euro, you need to be aware of the financial risks tied to currency fluctuations when buying property in Greece. This often-underestimated factor can impact your ability to complete a property purchase.

The property buying process can take several months, during which exchange rates between your local currency and the euro may vary. In the timeframe between signing the sales contract and its completion, the price in euros for the property in Greece remains constant. However, its value in your local currency may fluctuate. For instance, a 5% drop in the value of your local currency against the euro would mean that the property will now cost you 5% more in your local currency. With the size of the purchase amount, that 5% could work out to a substantial additional cost to cover at the last minute. Of course, your currency could gain, instead, and the property cost less – but that’s a gamble with maybe tens of thousands at risk.

To remove this risk, consult with a currency exchange specialist before agreeing to buy. They can help you understand your budget in euros and prepare for potential fluctuations in your local currency. They should also be able to offer a tool called a forward contract, which will allow you to secure an exchange rate for the entire property price, protecting you from future exchange rate changes and removing the risk of a nasty surprise when it comes to completion.

Our recommended currency exchange specialist, Smart Currency Exchange, has over 20 years’ of experience assisting international property buyers. They can provide you with a forward contract that fixes an exchange rate for up to a year, without any extra fees. This can give you peace of mind, knowing exactly what you’ll pay upon completion.

Legal pitfalls to avoid

When buying a property in Greece, it’s important to employ an independent lawyer. The estate agent or developer may recommend their in-house legal services, but you need to know that your lawyer is working with your best interests at heart, not their colleagues’.

You should choose a firm with a specialism in property law. If they offer associated legal services, such as inheritance and planning, this will be helpful as well.

Speak to a lawyer early in the process – not just when you are given a contract to sign. Before taking a viewing trip, consult a lawyer about your plans. For example, are you aiming to offer rentals? (Greece has tightened their rental rules in the last year, so it’s important to get clarity on this before you buy). Do you wish to renovate, or add a swimming pool? Are you buying as an unmarried couple, each with your own children? There are potential pitfalls for buyers around all of these issues – easy to sort out early but potentially expensive further down the line.

Choosing the right location in Greece

From the bustling streets of Athens to the calm of a tiny island, Greece offers an incredible variety of places to live. Deciding on the right location is one of the biggest conundrums.

For example, while a remote island might provide the peace and quiet that you are looking for, it might feel isolated. Transport connections to some islands can be limited off-season. Plus, if you do not know any Greek, you might struggle to adjust. Navigating healthcare and banking in rudimentary sign language can be tricky.

Some areas are also at risk for earthquakes. You will want to consider if you feel truly prepared for that. It’s also important to check that your property as ready as it can be for enduring harsh weather, be it high temperatures or forest fires. In the buying process, you can talk to your estate agent, lawyer and a surveyor about your concerns.

Choosing the right property in Greece 

Greece has many, beautiful historic properties but they do not always make for the most comfortable homes.

You may want to have a survey done on the home. If the property says that it has been renovated, ask to see bills for work done and check the functionality of the building yourself, to see how successfully it has been done. You want to be sure that a pretty paint job is not covering up a much wider bigger problem that you will have to face later on.

Off-Plan potential pitfalls to avoid

An off-plan property will usually be part of a wider development, community, or resort built by the same developer. Most off-plan properties in Greece take between 12 and 24 months to complete, and this can create some issues.

Potential pitfalls include:

• Living on a building site: If you buy early in the build, your completed and paid-for property will be on an unfinished development for some time.
• Delays and uncertainty delays in the construction process can occur for various reasons, including shortages of materials or labour, or unforeseen complications.
• Financial commitment: you tend to pay for a new build in instalments across the time that it takes for the build to be finished. This can be difficult to budget for, especially if your income is inconsistent.
• Falling prices: If property prices decrease during the construction period, buyers may find themselves in negative equity.
• Disappointment: The property may simply not be what you hoped for. The best way to avoid that is to see other projects from the same developer first.

As the cost of a new build can be as much as 20% lower than a key ready home, many are choosing to buy off plan. There are provisions, such as bank guarantees, in place to protect buyers too.