Buying Property in Greece with a Limited Company

Greece has long been a dream destination for property buyers, whether for a vacation home, rental investment, or retirement sanctuary. As foreign investors seek ways to purchase property in Greece, many wonder whether buying through a limited company is a viable option. This approach offers both advantages and challenges, especially when it comes to legal, financial, and tax implications. But is it really worth it?

In this article, we’ll explore everything you need to know about buying property in Greece with a limited company, from the process to the benefits and potential drawbacks. By the end, you’ll have a clear understanding of whether this option is right for your investment plans.

Why Consider Buying Property Through a Limited Company in Greece?

1. Tax Benefits for Investors

Purchasing property through a limited company in Greece can offer tax advantages, especially if you are planning to rent out the property. The Greek government provides favorable tax treatments for companies involved in real estate investments. Corporate tax rates may be lower than individual tax rates, which can save you a significant amount over time.

Key benefits include:

• Lower Tax Rates: Corporate tax rates can be more favorable than individual tax rates on rental income and capital gains.

• Depreciation Deductions: Companies can deduct depreciation on the property, reducing taxable income.

• VAT Advantages: For properties that are intended for business use, VAT exemptions may apply.

Pro Tip: To fully understand the potential tax savings and compliance requirements, consult with a local tax advisor who specializes in Greek property law.

2. Easier to Manage Multiple Properties

If you plan on purchasing more than one property in Greece, buying through a limited company can simplify the process. Instead of managing each property individually, a company structure allows you to pool your investments, making administration more streamlined and efficient.

Benefits for multiple property ownership:

• Centralized Management: All properties are handled under one legal entity, easing the complexity of accounting and reporting.

• Asset Protection: Separating your personal assets from the company provides a level of protection against personal liability in the event of business-related issues.

3. Easier Access to Financing

Banks and financial institutions in Greece are more likely to offer favorable financing terms to limited companies, especially if you’re purchasing property for rental or commercial purposes. This is particularly beneficial for international investors who may not have the same access to financing as local buyers.

Advantages for financing:

• Higher Loan Amounts: Companies can potentially borrow higher amounts compared to individual buyers.

• Better Terms: Companies may be offered better interest rates or more favorable loan conditions, as banks view corporate loans as lower risk.

Potential Drawbacks of Buying Property in Greece with a Limited Company

While there are numerous benefits to purchasing property through a limited company in Greece, there are also some downsides to consider.

1. Higher Initial Setup Costs

Establishing a limited company in Greece requires legal and administrative work, which can incur costs. You will need to hire professionals to help set up the company structure, which might include lawyers, accountants, and notaries. These upfront costs can add up, and in some cases, may outweigh the benefits if you only plan to purchase one property.

Costs to consider:

• Legal Fees: The process of setting up the company and registering the property can involve significant legal fees.

• Accounting and Maintenance: A limited company will require ongoing accounting and administrative services, adding to your long-term costs.

2. Complexity in Property Sale

Selling property owned by a limited company can be more complicated than selling personal property. The company must be sold as a whole, which may involve additional paperwork and taxes. Additionally, potential buyers may not always be familiar with purchasing from a company, which can lead to challenges in finding a buyer.

What to expect when selling property via a company:

• Additional Documentation: Selling property owned by a limited company requires extra documentation, which can slow down the process.

• Higher Transaction Costs: The cost of transferring the property from the company to the buyer can be more expensive compared to a private sale.

3. Potential Double Taxation

In some cases, profits earned by a limited company may be subject to double taxation. This can occur if both the company’s profits and any dividends paid to shareholders are taxed. If you intend to take profits from the company in the form of dividends, it’s important to factor in the tax implications.

Tax considerations:

• Corporate Tax: The company is taxed on its earnings.

• Dividend Tax: If profits are distributed as dividends, shareholders may face additional taxes.

The Legal Process of Buying Property Through a Limited Company in Greece

1. Setting Up the Limited Company

Before you can purchase property, you must first establish a limited company in Greece. This requires registering the company with the Greek authorities, including obtaining a tax identification number (TIN) and registering with the local chamber of commerce.

Steps to set up a limited company:

• Register the company with the Greek government.

• Obtain a Greek TIN for tax purposes.

• Hire a lawyer to draft the company’s bylaws and register with the local Chamber of Commerce.

2. Property Acquisition

Once the company is set up, the property can be purchased in the company’s name. You will need to engage with a local notary and lawyer to ensure all legal procedures are followed. The notary will verify the property’s legal status and ensure the transaction complies with Greek real estate law.

Key considerations during the purchase process:

• Property Due Diligence: Ensure the property has no legal encumbrances.

• Tax Registration: Register the property with the Greek tax authorities under the company’s name.

• Notary Fees: A notary must oversee the finalization of the transaction, which will involve certain fees.

3. Ongoing Maintenance and Compliance

Maintaining a limited company in Greece requires ongoing compliance with tax laws, company regulations, and financial reporting. This includes submitting annual tax returns, maintaining accurate accounting records, and ensuring the company meets all legal requirements.

Regular responsibilities include:

• Annual Financial Reports: Submit annual reports and tax returns for the company.

• Accounting: Keep accurate financial records to ensure compliance with Greek tax laws.

• VAT Returns: If applicable, file VAT returns for properties used in business activities.

Is Buying Property in Greece with a Limited Company Worth It?

Buying property in Greece through a limited company can offer significant advantages for investors, especially those with multiple properties or rental goals. However, the complexities, additional costs, and potential tax considerations make this approach more suited for larger investors or those with long-term plans.

For those considering buying in Corfu or other parts of Greece, it’s crucial to weigh the benefits against the drawbacks and consult with legal and tax professionals to ensure the decision aligns with your investment goals.

If you’re ready to take the next step in purchasing property in Greece, visit Chase Real Estate Corfu for expert guidance, property listings, and more detailed insights into buying property in Greece.