By Christos ILIOPOULOS*
Real estate property in Greece can be transferred from parent to child essentially without transfer tax. Immovable property worth up to 800,000 Euros from one parent to one child is free of transfer tax. Such a legal transaction is popular among the Greeks, as it reflects the strong ties which exist in most families between parents and children, indicating also the widespread wish of parents to pass the ownership of property to the next generation.
Parents who wish to transfer one or more properties to their children, but at the same time prefer to continue living in the property, can choose the option to transfer to their child only the bare ownership and retain for life the usufruct. The latter is the right to economically exploit a real estate property, or to live in it. If we choose the gifting to the child of only the bare ownership, the parent retains the right to rent the property and receive the rental income, or the right to use the property at will. Often, the parties involved in the parental gift deed, meaning the parent and the child, elect to insert in the deed the term that the parent retains the right of the usufruct for life. This means that the parent gifts now the property to the child but he / she remains certain that the child will not throw him out of the house once the child obtains the ownership. The parent may retain the right of the usufruct for life and also add the term that after the parent passes, the usufruct goes first to his/her spouse, and only after the passing of the spouse, the child will become full owner.
When the parent passes, the child who had received the bare ownership, automatically, without the need of any other legal transaction, becomes full owner, since the usufruct is united with the bare ownership in one person, the child. However, in the case of the passing of the parent, the child must seek legal advice about possible requirements to declare such change from bare to full ownership, to the local land registry, the Greek tax office and possibly to other authorities.
The parental gift deed (goniki parohi, in Greek), like all deeds transferring or altering rights on real estate in Greece, is signed before a notary, after several certificates and other documents are issued, ensuring that the property is accurately described, measured and declared. This legal transaction involves two parties, the parent who is giving the gift and the child who is receiving it. Both parties must physically sign the deed at the notary’s office, once the paperwork is prepared and all the supplementary documents are drafted. If one or both parties are not residing in Greece, they can sign a power of attorney (POA), at a Greek notary or at a Greek Consulate, empowering a trusted person in Greece, to prepare the certificates and finally sign the deed of transfer at the notary’s office on behalf of the party who is not able to physically attend the signing of the parental gift.
Both parties must sign a notarial POA for the parental gift, not only the parent who is gifting the property, but also the child who is accepting it, if they cannot sign the deed in person. The text of the POA is elaborate, like most real estate transactions in Greece, and must be drafted by the notary or a lawyer. It will then be presented to the parent and/or the child who are abroad, or are in Greece, but will not stay long enough until the signing of the deed. The parent and/or the child who will sign the POA must fully understand its text. If they do not speak Greek, an interpreter is appointed. If the POA is to be signed at a Greek Consulate located outside of Greece, or even at a notary in a foreign country, the draft is e-mailed to the foreign notary or to the Greek Consulate and the final text is completed by the Consulate or the foreign notary, who will certify the signature of the party (parent and/or child) who is signing the POA. If the POA is signed outside of Greece at a notary’s office and not at the Greek Consulate, an Apostille or other local certification may have to be attached, before the POA hardcopy is sent to Greece.
The parent who wishes to sign a parental gift must have at least a photocopy of the deed by which the parent has obtained the ownership of the property. If such a copy is not available, a lawyer will make a title search at the local land registry under the name of the parent and should be able to locate the deed and get a copy of it.
*Christos ILIOPOULOS, attorney at the Supreme Court of Greece, LL.M., www.greekadvocate.eu e-mail: [email protected]
