A beautiful Island, why not?

Rhodes has something for everyone, golden sandy beaches with fantastic water sports, amongst traditional restaurants, cafes, bars and boutiques to butterflies, goats and donkeys. Historical castles, acropolises, temples and spas nestled close by lush tropical mountains, vine yards and orange and olive groves. Rhodes quite simply has it all! The problem is not so much why Rhodes? But where on Rhodes? A traditional village or city life in cosmopolitan Rhodes old town? Lively beach resorts or something a little more off the beaten track, perched in the mountains? Which Sea Mediterranean or Aegean? Greece is entering into the 2nd home market as an alternative to France and Spain, with legislation recently changed and strict density laws prohibiting over population this guarantees that the Greek Islands continue to offer a paradise of rare beauty what better choice for your 2nd home.

Why are fly to lets so popular?

Many people imagine one day of owning a home in warmer climates, but if you like many have financial commitments at home, a mortgage or 2! Kids, cars and credit cards then you may have resided to the fact that a property abroad is something you might only be able to do once retired. So many people don’t fully understand how strong the holiday villa rental market currently is, it has grown and is standing out in front of conventional packages holidays and has become the fastest growing sector within tourism.

Developers are now offering guaranteed rental programs, making now the right time to buy, you can stop imagining and start living with piece of mind that you know for a set period of time, bound in a contract and renewable after the agreed time, mostly two years, that you have a guaranteed monthly income which can be used to repay borrowings that were made when purchasing the property. If you select your location well, tourist areas carry higher rental returns, you could find that with only a small deposit of 10 or 20%, you may only need to supplement your mortgage by as little as £50 per week!

Rhodes is currently building up to a property boom, with more and more people just like you taking the plunge and buying a home on Rhodes, prices are increasing an average of 7 to 12% annually (depending on location). This is an excellent time to buy a property on Rhodes, experts have shown that over the past 5 years we have experienced good price growth and the future forecast is showing significant increases in property value, there has never been a better time to buy. Why wait until you retire and risk paying at the height of the boom, if you can fly buy, own it now, buy off plan direct from a developer and get on the Rhodes property ladder before prices sail through the roof. With the Island’s practically zero crime, purchaser’s security of a Land Registry, modern infrastructure and 300 days of Mediterranean sunshine each year, why are you still thinking about it? Most developers offer inspection trips, don’t miss out!

The Buying Process

Believe it or not the buying process on Rhodes is surprisingly quick and straight forward. Rhodes has its own Land Registry just like back home you can buy a property with the security of knowing that your title deeds are true and held by the governing body of the Land Registry, safe with the thought there will be no future problems or horror stories to tell like those of unfortunate people in Spain and Portugal, horror stories which have been heavily reported by the press and British documentary programs.

Your appointed Lawyer will accompany you to a Public Notary (a government appointed body) where you will pay approximately 60€ and complete the documents required to give the Lawyer Power of Attorney to represent you in this purchase.

Your Lawyer will then be able to open a local bank account for you in joint names to allow you to transfer money from your home country to Rhodes to finance your purchase, with these payments being forwarded to the builder once you are satisfied that each stage is completed.

The Power of Attorney will also allow your Lawyer to sign all purchase documents on your behalf and in your absence. Furthermore your Lawyer – once given Power of Attorney – will then obtain your local tax number for you (known as A.Fee.Mee number) and temporary residency permit, known as a Blue Card. Both the tax number and the blue card are required by law to enable you to purchase property in Greece.

Your Lawyers fee's and purchase taxes will be due at the Land Purchase stage of the payment plan.

10 – 13% should be allowed for all purchasing taxes, this figure will always be an over estimate but it is best to budget for more rather than less. You will be asked for 2,000€ reservation deposit to remove the property from the market and to commence with the paperwork.

A sales confirmation letter will be drafted by the constructor confirming the price of your new home and breaking down the stage payments, detailing what you are paying for at each stage.

A pre-construction check list should be completed before you leave Rhodes . This is a breakdown of any changes that you would like to make to your new home and also the details of your tile and kitchen choices.

What documents do I need to bring with me?

Birth Certificate

Marriage Certificate (if purchase is to be in joint names)

3 photocopies of your passport

8 passport sized photographs

P60/Tax Returns for previous two years income

Financing

Mortgages are available in Rhodes on residential properties. All loans are available on a capital and interest repayment basis. Mortgage loans are based on income, therefore proof of income is required for all cases. Mortgages can be arranged in Euros, Sterling , or US Dollars and the lenders may also take into consideration rental income when assessing income.

80 – 100% mortgages are available in Rhodes (check with individual lenders terms and conditions)

Interest rates have increased many times in 2006. 2007 is set to see the same pattern. 2006 saw more and more fixed and interest only local mortgages from Greek banks and current rates are approximately 4.87% for a fixed or a standard variable rate of 4.5% (correct at time of print).

The bank will charge mortgage set up fees (approximately 1,500€- check with your choice lender). The bank will probably also require you to take out annual property insurance, the cost for this is usually around 500€ for the year.

Another cost to be aware of when purchasing a Greek property through local financing is the bank's pre-notation charges. The bank will place a pre-notation of the total loan amount plus an additional 20%.

In the event that you default and the bank takes possession they would seek to recover the outstanding loan amount plus the 20%.

Rental Return

The most popular and successfully rented properties are three bedroom villas with private pools. The average weekly rent from April through to November is £500 per week. It is anticipated that a three bedroom villa with a private pool will rent for a minimum of 22 weeks.

It is certainly possible for the property to be rented for more than the 22 week season and the majority of the properties do rent for a much longer period, but 22 weeks is a cautious estimate.

Therefore 22 weeks x £500 = £11,000

You will need to instruct a property management company, it is best to stick with the management company recommended by your developer.

The management and rental company who will provide you with the following services:

All advertising to find occupants for the property

Check in and out of guests

Full property, garden and pool maintenance

Payment of utility bills

Expect annual charges of approximately £4,000 for these services. Therefore £11,000 (22 x £500) minus £4,000 = £7,000.

Frequently Asked Questions

How do I find a good local Lawyer?

The developer or agent that you purchase from will have a company appointed Lawyer that you can use. The Lawyer will guide you through the entire buying process and will usually recommend for you to grant Power of Attorney to them, leaving you free to depart Rhodes Island with the assurance that your Lawyer will complete your relevant applications, Contracts and property purchase in your absence. Lawyers speak good English on Rhodes and can update you via email on the progress of your purchase.

Why do I need a Notary?

A Notary Public is a government-appointed Lawyer who processes/oversees and certifies all real estate transactions, including drawing up and reviewing all official documents, to ensure the legal transfer of the property. Your Lawyer will make an appointment with the Notary for you to grant Power to your Attorney, there is a small fee for each POA usually 30 - 80€. Make sure to include all actions/permissions in one POA to avoid unnecessary trips back to the Island .

Do I need to have a Residency Permit?

Yes. A temporary residence permit called a Blue Card is required. This is obtained from a local Police Station on Rhodes Island . Again the developer of sales agent you purchase from should assist you with this. You need to take a copy of your passport and five passport sized pictures with you to the Police Station where you will be asked to complete an application form for residency (the blue card is usually granted within two to four weeks). This permit is a formality for EU nationals.

Do I need a Tax Registry Number (AFM)?

Yes. A tax number (pronounced a-fe-me) is mandatory for all buyers, including foreigners and permanent residents abroad.

Again accompanied by the developer or agent you will be taken to the Tax Office in Rhodes Town, please take one photocopy of your passport with you, you will be asked to complete a registration form which once completed, a tax number is issued immediately, the process takes about ten minutes, please be aware that the AFM department is not open on a Friday and closes daily (Monday-Thursday) at 13.30.

Can I have a Greek mortgage?

Yes, it is possible to get a mortgage in Greece . The company from which you make your purchase will usually recommend or have an appointed Mortgage Broker , as with the entire buying process, the seller will usually have excellent relationships Greek Banks and will do a lot of the ground work for you. The process is similar to most European countries. To apply for a mortgage you will need your passport and proof of income for the last 2 years (P60's, payment stubs, or tax returns if self-employed).

Property Insurance, is it essential?

Although no market standards exist as to the forms of insurance that can be taken out, it is reasonable to suggest that property be insured against the following risks: fire, earthquake, water damage, breaking glass, storm, theft, and third party.

Will I need to file a Tax Return at the end of the Year?

Yes. The Greek State has mandated that all property ownership in Greece must be declared by filling out a form called E9 and submitting it to the Greek Tax Authorities. This is mandatory for every property owner in Greece , even those who live abroad and have never filed tax returns in Greece or do not have an income in Greece . As of 2006, the E9 form will be submitted only by those who either: obtain or sell / dispose of any kind of right over immovable property in Greece . If you own immovable property in Greece but your assets next year have not changed from what they were the year before, you can resubmit the previous E9 form again.

Capital Gains Tax

New property taxation laws came into affect January 1 st 2006 . These include a Capital Gains Tax for properties purchased after January 1 st 2006 . The percentage of tax owed will vary depending on the length of time a property remains in one's ownership. Specifically:

- For properties purchased after January 1 st 2006 and remaining in ones ownership for 0-5 years : Capital Gains Tax 20%

- For properties purchased after January 1 st 2006 and remaining in ones ownership for 5-15 years : Capital Gains Tax 10%

- For properties purchased after January 1 st 2006 and remaining in ones ownership for 15-25 years : Capital Gains Tax 5%

I am a Non-EU Citizen, what do I need to know or do in order to purchase a property on Rhodes ?

If you plan to purchase a property in an area near national borders (including some Islands such as Crete and Rhodes, and Islands of the Eastern Aegean ). In these circumstances, you must apply for a special permit issued by the Ministry of Defence in Athens .

An alternative and more efficient way to purchase property in these areas is through an offshore company in your name, based in an EU country. This is a fairly commonplace; setting up and maintaining such a company costs approximately 2,000 € to establish and 1,500-2,000 € annually.