Building a house in Crete | The complete guide 2023
All you need to know before building a house in Crete
This detailed article is providing information on the process of building a house in Crete. Either if you plan to buy land and get into the building process, either if you plan to buy a property and renovate it. All the information are provided by Europlan, an awarded construction company in Crete that undertake all the necessary steps from the issuance of paperwork, the architectural design to the implementation of the construction.
What are the building regulations in Crete?
The General Construction Code (G.C.C.) together with the Building Regulations are the basic legislation governing the construction of buildings in Greece. In 2012, G.C.C. was replaced by the New Building Code (N.O.K._N.4067_2012). Having decided to build a house in Greece, it is better to familiarize yourself with the building regulations in advance and understand the complexities of Greek law.
When determining the construction possibilities of a space, the main coefficients applied are: building coefficient, coverage coefficient, height – volume of the building and distances from the boundaries.
Building factor (s.d.) is the number, which, multiplied by the surface of the plot or field, gives the total permitted building surface.
It is the coefficient that defines the permitted coverage limit of a plot of land with a building. This is a defined coefficient, which, multiplied by the area of the respective plot, gives us the maximum surface occupied by the building on the plot.
Height of a building in a certain location which is the vertical distance from the point that constitutes the starting point of measurement, according to the provisions of this law (sidewalk level or definitive ground level or natural ground) to the level of the final upper surface of the top floor, in which includes the permanent and its coating in this position.
Permitted volume of the building is the permitted volume in cubic meters of each building within the ideal solid and is calculated from the level of the formed ground
The permitted volume is 5.50 on the permitted building and for commercial buildings or buildings >8.50m. height is 5.00 on the permitted building.
The distances of the building from the boundaries of the plot vary per case. Within the plan and within the settlement there is a possibility that the building touches the boundary of the plot. The maximum distance observed in the off-plan areas is 15m.
An important criterion is the location of the plot available for purchase – construction. The location of the plot determines whether it is within the plan, within the settlement or outside the plan and depending on the category it is classified there are corresponding provisions.
A plot of land is the area of land (field), which is located in an area outside the approved town planning plan or outside the settlement boundaries. The parcels of land are not potential plots of land, but under certain conditions they can be built on.
In order to build a property outside the plan (a plot of land) certain conditions and conditions must be met, defined by the Presidential Decree of the year 1985 on building outside the plan, as it applies today and as defined in specific decrees per area and in combination with the more general ones provisions of the New Building Regulations (NOK).
The general condition for building the fields, which are outside the city plans or outside the boundaries of the settlements, as long as it is not defined differently for each area by special provisions, are the following:
Α) Minimum field area four thousand (4,000) m2.
Β) Face on a National, Provincial or Municipal road 45 meters or on a recognized public road 25 meters.
For example, a field with an area of 4,000 sq.m. provides construction of 186 sq.m. unless it is in a special zone with stricter conditions. Accordingly, a field of 8,000 sq.m. provides construction of 258 sq.m. , unless it is in a zone with stricter restrictions. The coverage may not exceed the building. The height is 4.00 m for single-story and 7.50 m for two-story buildings.
In order to build a property within a plan (plot), certain conditions and conditions defined by the relevant urban planning provisions must be met. The conditions are approved by the Town Planning Study of the area and published in the Government Gazette (Government Gazette).
1. Maximum Coverage Rate and Building Factor
The maximum coverage percentage of the pitches is set at 60% of their surface or up to 70% for plots up to 200 sq.m.
2. Building System
Building is determined by neighborhood with a range of 0.4-2.8 in most cities.
3. Maximum height of buildings
Building heights range from 6.00 m to 20.00 m in most cities.
1. Maximum Coverage Rate and Building Factor
The maximum coverage percentage of the pitches is set at 60% of their surface or up to 70% for plots up to 200 sq.m.
2. Building System
• The building is placed freely within the plot. Where the building does not touch the side and rear boundaries of the plot, a distance of at least 2.50 m is left. The distance between independent buildings within the same plot is set at 2.50 meters minimum.
• For pitches smaller than 700 sq.m. the construction of a building of any use (main and auxiliary) with a maximum permitted total floor area of 240 sq.m. is permitted.
• For pitches greater than or equal to 700 sq.m. the construction of a building of any use (main and auxiliary) with a maximum permitted total floor area of 400 sq.m. is permitted.
• For pitches smaller than 200 sq.m. is defined as s.d 1.0 and in order to enable the maximum permitted construction of a total surface of 200 sq.m. the coverage is allowed to be greater than 60% without in any case exceeding 70% of the field surface.
• For buildings for tourist and purely professional uses, the s.d is defined as follows: for the first 1000 sq.m. of the surface of the field, the s.d is set at 0.6, for the next 1000 sq.m. of the surface of the field, the s.d is set at 0.5, for the next 1000 sq.m. of the surface of the field, the s.d is set at 0.4, for the next 1000 sq.m. of the surface of the field, the s.d is set at 0.3, for the part of the surface over 4000 sq.m. s.d is set to 0.2
3. Maximum height of buildings
The maximum height of buildings is set at 7.50 m. and is measured at each point of the intersection of their outline with the natural ground
What are the steps in buying a property?
How to issue a building permit in Greece?
Building Permit is the administrative act issued by the Building Service of the competent Municipality and which allows the execution of building works in accordance with the relevant studies drawn up by a private Engineer, provided that these works are in accordance with the applicable legislative provisions. It is issued through the Electronic Permit Issuance System of the Technical Chamber of Greece after a check by the competent Building Service and in relation to the subject of each Permit.
The concept of construction works includes the construction of a new building or an addition to an existing building, the works that make the building fit for operation, even permits that do not create a building such as the works for the construction of walls or fences, cesspools, underground water tanks , demolitions, change of use, configurations, reinforcements, pool constructions, pergolas, roofs and many other works.
According to the type of desired work, the issuance of a Building Permit of the corresponding category is also required. The most common categories of Permits are Class 1, 2, 3 Building Permits and Small Scale Building Work Approvals which also have the status of a Building Permit.
All categories of Permits related to any work carried out in an existing building presuppose either that there are no violations in the existing building or that if there are violations, they have been regulated by applying the provisions of the currently applicable Law on Settlement of Abuses.
The process of issuing a Building Permit consists of the following stages:
• Determination by the interested party of exactly which works / constructions he wishes to carry out.
• Visit to the property to capture and determine by us the Legislative framework that covers the desired works / constructions.
• Preliminary study, development of architectural solutions and their presentation to the interested party.
• Delivery by the interested party to us of all the required supporting documents concerning the property (property documents, copies of previous Building Permits, Subrogations to Arbitrary Laws, etc.).
• Elaboration of all the required studies of the project in accordance with the applicable Regulations (Building, Construction, Anti-seismic and Concrete Regulations) by our team of experienced Engineers.
• Submission of the supporting documents and studies to the competent Building Service through the electronic system e-adeies and/or to the other services whose approval may be required as the case may be (Council of Architecture, Archaeology, etc.).
• Calculation of contributions and reservations (if required) of the project and their repayment by the interested party.
• Control of the submitted data by the employees of the competent Construction Service (and/or other Services), depending on the case and category of Permit and then issuance of the Permit.
• After the issuance of the Permit, the developer has the legal right to start the licensed works.
• After the completion of 3 main stages of the works, and always depending on the type of Permit/Approval, the Supervising Engineer calls a Construction Inspector, who, after a predetermined appointment, visits the project to check whether the works carried out are in accordance with the approved studies. If its conclusion is positive, the Construction Inspection Certificate (PEK) is issued, which essentially constitutes the official document of completion of the Permit, and on the basis of which the owner has the right to apply for connection to the utility networks.
• The duration of validity of a normal form of Building Permit is 4 years. Building Permits for buildings with an area of more than 5,000 sq.m. have a validity period of 6 years, the Demolition, excavation, embankment, configuration, tree cutting and Small Scale Permits have a validity period of 1 year, and finally the Permits to Legalize Arbitrary Constructions are valid indefinitely. Depending on each License or Approval case, as well as if certain conditions are met, there is also the corresponding possibility of securing an extension of validity.
What are the taxes in the property ownership?
The main taxes imposed on the purchase and sale of a property are the Property Transfer Tax and the Value Added Tax (VAT) paid by the buyer, the Property Capital Gains Tax borne by the seller, the Property Tax (T.A.P.) and ENFIA paid by the owner of the property every year.
Every buyer who proceeds to acquire real estate in Greece must, before signing the contract, pay the property transfer tax calculated at 3% on its value. The tax is paid once, while the transfer tax declaration is submitted electronically on the AADE myProperty platform.
For the purchase of a first home, a tax-free limit applies, which amounts to 200,000 euros for the unmarried, increases to 250,000 euros for the married and is increased by 25,000 euros for each of the first two children and by 30,000 euros for the third and each of the following minors children, of whom the beneficiary has custody.
In case of purchase of a plot of land on which a first residence can be built, an exemption from the tax is provided up to a value limit of 50,000 euros for unmarried persons and up to 100,000 euros for married persons. The limit is increased by 10,000 euros for each of the first two children and by 15,000 euros for the third and each of the subsequent children of the beneficiary.
The owner of the property is obliged to pay the TAP, who is required to pay the amount annually, through the electricity bill. The TAP is calculated at a rate of 0.025% to 0.035% on the objective value of the property. This depends on the price zone the property belongs to and the age factor. According to what the tax legislation provides, a basic condition for the completion of the transfer of a property is the payment of the Real Estate Tax for the last five years.
The Property Ownership Tax (ENFIA) is the tax imposed by the Greek state on all property owners. If you are the owner or have rights in rem over a property (usufructuary, full / bare ownership) then you must pay ENFIA. It doesn’t matter if the property produces income, if you use it for owner-occupation. In any of the above cases, you still owe ENFIA. It is noted that in case of co-ownership, the tax is divided based on the percentage of co-ownership. The tax is annual and is usually issued in September in 6 installments.
Owned properties for the production and exercise of business activity are NOT exempt from the supplementary VAT tax and will henceforth be taxed at 0.1%. Therefore, along with the main tax, a supplementary tax is also calculated. The expense for ENFIA is tax deductible from the gross income of the companies. The above does not apply to sole proprietorships.
Legal persons and legal entities that have rem rights of full or partial ownership or usufruct in properties located in Greece, pay a special annual tax of fifteen percent (15%) on their value. Exempted from the provisions if they have their headquarters in accordance with their articles of association in Greece or in another country of the European Union, limited liability companies, joint stock companies etc. if the company shares or shares belong to natural persons or if the natural persons declare in the to which the participating companies belong and on the condition that the natural persons have a tax registration number in Greece. The special real estate tax does not apply to natural persons.
If a taxpayer proceeds with at least 3 sales of his real estate within a period of 2 years, then the capital gain resulting from the sale of these real estates, i.e. the difference between the sale price and the acquisition price, will be considered income from business activity and will be taxed not with 15%, as provided by the provisions on real estate capital gains tax, but with 9% – 44%, according to the provisions of article 29 of the Income Tax Code, and with an additional advance tax of 100%. That is, anyone who sells three properties within a period of 2 years is considered by the tax authorities as an entrepreneur and the capital gain from the sale of their properties is taken into account as a profit from business activity, which is taxed at the self-employed income tax scale.
The implementation of the provisions for the imposition of capital gains tax on real estate was suspended until 31/12/2022 in accordance with legislative regulations passed by the Parliament in 2019 and more specifically with Law 4646/2019. In accordance with the provisions of Article 41 of the Civil Code:
1. Capital gains tax will be imposed at a rate of 15% on the profit obtained between the purchase price and the sale price of each property. The tax will be borne by the seller of the property.
2. As long as the taxpayer has held the property he is selling for at least five years from the moment of its acquisition, the capital gain will be tax-free up to the amount of €25,000.
3. Those who transfer real estate they own before 1995 will be exempt from the capital gains tax (be careful with the date of inclusion in the boundaries of the settlement).
With the increase of independent-minded tourists looking for tranquil holidays in idyllic locations, the rental potential of villas in Crete has risen sharply. This makes the purchase of a villa in Crete a perfect investment. Whether you intend to cover the cost of the villa and your mortgage, or to actually supplement your income, since managed properly, your villa in Crete can do this for you.
However, it is essential to obtain a license from the Greek National Tourism Organization, known as EOT in Greece, if you intend to rent your villa to various tenants. Greek National Tourism Organization has strict rules with reference to the suitability of each property, which ensures that tourists are not renting second rate accommodation during their stay in Greece. The standards for construction of villas in Crete and their swimming pools’ have to be met before the GNTO will issue a license for the villa to operate as rental accommodation.
The criteria for the approval of the EOT license tend to vary over time and this is why it is necessary to appoint someone familiar with the procedure and fluent in Greek, to do all the essential paperwork for you. Europlan cooperates with professionals who can carry out the whole procedure needed always with the assistance of our qualified architects. There is also the purchase of certain safety features to be considered, such as fire extinguishers, emergency lights, exit signs, pool depth markers, etc. These added extras ensure that buildings and pools meet safety standards. For rental villas there is a key system in place, similar to the star system for hotels. One key being the basic category for simple rented furnished accommodation, while the highest category is for luxury villas.
With regard to legal entities and legal entities of a profit-making nature, it is recalled that income from immovable property is taxed according to the provisions of par. 2 of article 47 of the C.F.E. with a rate of 22%, as the income in question is in any case considered income from business activity. Consequently, the provisions of articles 22 and 23 of Law 4172/13 apply to the expenses incurred and concerning the properties that are leased.
As far as natural persons are concerned, the income from real estate is taxed separately according to the following scale:
• From 0 to 12,000€ with a rate of 15%,
• from €12,001 to €35,000 with a rate of 35%
• and for incomes from €35,000 and above with a rate of 45%.
In parallel with the passing of Law 4646/2019, natural persons who receive income from real estate have the obligation to cover 30% of the annual real income from rents with expenses for the purchase of goods and the provision of services paid by electronic means of payment.
What are the steps for a house design and construction in Creta island?
In our relevant article, Best Guide for House design and construction in Creta : Process and Cost, we explain all of the following steps in details.
- Building license and house design studies
- Excavations, house foundation and building structure
- Masonry
- Electrical installation
- Plumbing installation
- Thermal and sound insulation
- Wall coatings
- Doors and windows framing
- Floor structure
- Roof construction
- Exterior walls covering
- Internal works
- Exterior works
How much is the cost for building in Crete?
Building a house is an important decision that will affect your life, so it is important to think enough about how you would like your house to be and of course to research all the factors that will shape the final construction cost. In more detail, the factors that differentiate the construction cost of a house are the following:
- The choice of the Manufacturer who will undertake your project. A reliable partner with expertise, not only in construction but also in plot evaluation and design optimization, through which you will be able to control construction costs and guarantee the quality of the project.
- Design and construction supervision. Design optimization, attention to detail are necessary to keep the construction costs at the levels you set from the beginning.
- The surface and volume of the residence.
- The location of the plot. The difficulty of access, any neighboring properties, existing buildings can unexpectedly increase overheads and indirect costs.
- The net construction cost such as the cost of wages, selection of construction materials and subcontractor work.
- The various contributions and fees (permit, study and supervision costs, VAT, insurance contributions and other general costs).
- The slope of the plot. Sloping plots lead to increased construction costs.
- The composition of the subsoil. Loose soils lead to increased cost of construction of a Building Structure.
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Do not hesitate to contact us for an offer or any information regarding our services. Europlan undertakes all the necessary procedures if you wish to buy or build a property in Greece and obtain a golden visa.
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