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The final arrangements pushes up the price of real estate with over 10%. Elite real estate for sale and for rent in Greece and Spain

Monitor

19.05.2016

The Bulgarian national newspaper Monitor scratched the surface of real estate deals in Spain in Greece with an article by Vasil Nenchev – “The final arrangements pushes up the price of real estate with over 10%”. In the piece potential buyers can find information on latest real estate trends in Greece and Spain, as well as the additional expenses surrounding property purchases in the countries. The author of the article cites LUX IMOTI’s very own expert Nikola Cholakov, who pointed out that Bulgarians prefer purchasing terrace houses in Chalkidiki, with most of the deals falling in the range of EUR 100,000 to EUR 250,000.

The research by “Monitor” shows that final arrangements can push up the cost of real estate deals with 10% to 12% in Greece and Spain.

In our South neighbour every real estate deal above EUR 11,739 needs to be prepared and attended by a legal representative. Real estate being sold for up to EUR 44,020 will cost an additional 1% of brokerage of the entire cost, above that it can cost from 0.4% to 0.5%.

Additional EUR 250 to EUR 300 will be paid for the verification of property ownership and any additional services by the legal representatives. Notary fees are worth 1% of the entire deal plus 23% VAT of the entire fee received. Additional expenses for notary seals, taxes, tax return papers and inquiries, copies of all contracts, second copies can mount to upwards of EUR 1000. Brokerage fees are around 3% (VAT excluded), the re-registration of the property can cost up to 0,5% of the notary services plus VAT.

In order for a real estate deal to be finalised one has to pay 7% to 11% government taxes in a built-up area. VAT taxes need to be paid if the property was purchased from a company or other legal entities. If the real estate deal is between private individuals VAT is not applied.

“Depending on where the property is located every year EUR 6-8 monthly fees must be paid for waste collection and electricity bills.”

From 2009 additional taxes were introduced and according to Nikola Cholakov from LUX IMOTI, “Real estate with a EUR 100,000 price tag those taxes vary from EUR 300 to EUR 350”. According to the LUX IMOTI’s expert housing expenses in gated communities can cost up to EUR 300. Electricity bills for a property of about 100 square meters, for a 4 member household vary between EUR 70 and EUR 120 a month, while water bills will vary between EUR 25 and EUR 30. Depending on energy consumption a kWh costs from EUR 0.07169 to EUR 0.13705. Water consumption is charged between EUR 0.46 to EUR 4.03 for a cubic meter. In Greece a litre of A-95 gasoline costs EUR 2.50.

Nikola Cholakov added that Bulgarians are mostly interested in properties based in Kassandra (the western part of Chalkidiki), however an increase in the interest in properties located in Sithonia can be observed.

In Spain the purchase of a new real estate will add 10% VAT to the final cost, according to Prian.ru. On the secondary market VAT is only 7%. The lawyer and notary fees are worth about 1% and 3%, respectively, of the final value fees. Additionally local sales taxes, depending on the region and property value can cost 8% to 10% of the final value fee. Brokerage also varies between 3% and 5%, however it is mandatory that the brokerage fee is paid by the seller of the property. Exclusions to this rule often involve expensive business properties.

Real estate taxes in Spain cost 0.5% to 2% of the cadastral value (usually 10 to 15 times lower than market value). Owners of property in residential buildings pay from EUR 300 to EUR 500 for waste collection, while single family houses pay from EUR 500 to EUR 1500. In elite gated communities waste collection taxes are included in the monthly fees, however it gets even costlier.

The monthly electricity meter taxes in Spain cost EUR 15.84, kWh costs roughly EUR 0,2367. Water meter monthly taxes cost EUR 15, while a cubic meter of water costs (depending on consumption) between EUR 0.44 to EUR 1.78. A litre of A-95 gasoline costs EUR 1.139.

Brokers’ advice: Low offers often hide high risks

Real estate and apartments with low prices abroad are always dubious and buyers should be wary. Often such properties are found out to be “problematic”.

LUX IMOTI’s Nikola Cholakov explains: “In Greece conditional ownership arrangements are a common occurrence, however foreign customers are strongly advised to shy away from such deals. For example one could strike a deal for a 200 years rent at EUR 50 000. The owner may have no immediate heirs, however after his passing, if any other relatives come forward, according to the laws in Greece the contract could be voided.”

According to Cholakov in Greece fraudulent offers can often be observed, where prices are lower, but afterwards different properties are presented to the potential buyer.

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The published article is a translation/revision of the original article or material of the relevant quoted media. According to the Copyright Act of the Republic of Bulgaria (art. 9), the copyright on the translation or revised text belongs to the person who did it without prejudice to the rights of the author of the original text.

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