Neatly balanced on the border between the Aegean and Libyan seas, Crete offers one of the mildest and healthiest climates in Europe. Crete property currently attracts players from Eastern Europe, Scandinavia and Britain, now picking up extra buyers in the 40-50 age bracket who might otherwise have plumped for Spain. Charmed by the benefits Crete offers over the UK – better weather, lower cost of living, home grown food – most potential buyers of Crete property are looking to spend at least three to four months of the year on the island, seeing their investment as a good way to cut living costs.

The cost of living in Greece has actually risen by 4.9% since this time last year, according to the latest consumer price index, while its economy is only set to grow by 3% in 2008. Staples such as bread and pasta now cost 18 and 26% more respectively this year than last, a price hike Greek prime minister Karamanlis blames on the turbulent world economy.

But Crete still remains a vastly cheaper alternative to the UK – a couple can expect to achieve a good standard of living on an income of £12,000 a year. Crete property commands no rates if less than 150 square metres in total, while water bills and electricity and heating will cost £200 and £500 per annum respectively, says John Batty, managing director of Anglo-Greek agency Aegean Blue.

“Equally, Ctrete property prices are less, even in urban areas – buyers should expect to pay between €200,000 to €300,000 for holiday homes. With so much fruit, vegetables, oil, wine and meat produced on the island, most food costs are also very low.”

Long-term prospects for capital appreciation are also good, adds Robert Key, director of Cluttons’ Greek branch. ”Unlike Spain, there has been no crisis in the Crete property market. Planning permission is much stricter than in Spain (building within 50 metres of the coastline is now banned under new building regulations) so the great sprawling messes that many Spanish villages became will not be repeated in Greece.”

But the current world economic climate is likely to limit Crete property price growth to a minimum of 5% on the island in the short-term, Batty continues. “One spot likely to appreciate is anything located near and to the west of Chania, rather than in the east, particularly in the Apokoronas region where price rises were the sharpest in recent years.”

Chania, located on the island’s north-west coast, has long been a firm favourite with buyers, thanks to its seaside location and evocative mix of ancient buildings, revealing the town’s roots and history in an eclectic fusion of Byzantine, Venetian, Turkish and Greek styles. EasyJet’s recent decision to run weekly flights to Chania is testament to its growing popularity as a destination.

Still well preserved despite intensive German bombing during the second world war, renovation work to restore the town’s ancient streets and walls is afoot, while the east side of its old harbour is undergoing a chrysalis from ruined dockside to trendy, loft-style water hotspot.

One project worth keeping an eye on is Leptos Estates’ Canea Corniche scheme, a refurbishment of the island’s first olive oil treatment plant building, which was set up by a French chemist in the 1880s. Minutes away from the town’s old Ventian harbour, and located just west of the centre of the old part of Chania, the project is currently one of the few city centre schemes available in Crete, one of the few parts of the western world not suffering from an oversupply of apartments. Each of the 200 flats on offer will feature a sea view, while the site’s original features, two factory chimneys and a series of ovens, will be restored as part of a plan to create a small museum with artefacts and tools on the site’s original use. The finished product will be flanked by olive trees and landscaped gardens. Construction work on site is set to start in October, when prices for the Chania property will be released.

A more traditional project on offer is Leptos’s Aphrodite Villas scheme, a cluster of 64 villas and flats surrounding a communal pool, located just a few metres away from Pyrgos Psilonerou beach slightly to the west of Chania. Prices here start at €434,000 (£344,000) for a three-bedroom villa and €174,615 (£138,000) for a one-bedroom flat.

Heading west out of Chania into Maleme, Cybarco Real Estate Development has also recently launched the Maleme Project, a beach front development in the Platanias area made up of 16 two-bedroom flats and eight three-bedroom maisonettes located 17 kilometres out of the city. Each home has access to communal gardens and a central pool, while some maisonettes come with private pools, while the beach is located a few hundred metres away. Designed for both holiday home makers and permanent residents, the homes come with lots of storage space, making it a multi-purpose home and holiday let investment - rental returns in this area can be as much as €1,500 (£1,200) a week during high season.

Similarly, Cypraaegean Properties’ Artemis Gardens project in Maleme, a two-minute walk from the beach, is set around a series of landscaped gardens, bordered by orange trees and centred around a communal pool. A mix of 18 one and two-bedroom bungalows, townhouses and flats, the firm is currently guaranteeing rental incomes of 5% for two years. Prices range from €130,000 (£103,000) for a one-bedroom basement flat to €230,000 (£182,000) for a two-bedroom townhouse.

Buyers after Crete property renovation projects on the resale market (wrecks can still be purchased for as little as €35,000) have typically been put off by the difficulty of working through the island’s complex land ownership system, under which a single plot of land may have multiple owners who cannot all agree to sell. But now Greece has set up its own land registry, the process is set to get a lot simpler, says Key. “It’s now just as safe from an ownership point of view to buy resale property as new-build. A good lawyer and surveyor are necessary to check legal and technical details before the purchase is made. All property sales take place by signing a contract in the presence of two lawyers and a public notary. The contract is then deposited at the title and land registries under the name of the new owner.”

As a member of the European Union, Greece allows overseas buyers to buy in the country and live there permanently, although a visa and residence permit is required after three months, but only if you want to buy a car or obtain a Greek driving licence. Contact the Greek Embassy in London for further information.

Money matters
As the credit crunch continues to bite, it’s impossible for most buyers to even consider purchasing an overseas home without first having a mortgage offer in place. But help is at hand, with Greece’s banks offering a range of mortgages at favourable rates.

Leptos Estates offers loans with up to three years interest free credit for buyers who can cough up an initial down payment for off-plan properties, making stage payments throughout the construction process and then stumping up the final amount on completion. “But Greece has good banking facilities anyway, which have improved considerably in recent years,” says Christos Pateras, the firm’s marketing manager. “Most banks prefer to offer mortgages of between 75 and 80% of a property’s value, which are normally repaid over a maximum of 30 to 40 years, and are available to buyers up to the ages of between 70 and 75.”

Piraeus Bank UK (PBUK) currently offers packages with rates starting at 6% interest on repayment loans and collects sterling from the borrowers’ UK bank accounts, slashing costs for the buyer by converting the monthly instalments without charging commission, and offers market rates to help buyers convert the sterling amount of the Euro deposit required for purchase. Standard Piraeus packages offer loan to value rates of 80%, repayment mortgages with interest rates from 1.75% above the Euro Interbank Offered Rate (EURIBOR) for between five and 25 years, and interest-only mortgages of up to ten years. “Buyers must try to let their overseas home for at least some of the time to offset some mortgage and maintenance costs,” says Irini Tzortzoglou, PBUK’s head of retail banking. “Crete with its longest season and mature tourist market is one of the best locations in Europe for generating rental income.”

Most banks prefer to offer mortgages of between 75 and 80% of a property’s value, although some will happily lend up to 100%, adds Key. “There are a myriad of mortgages on offer with fixed-rate deals starting at about 3.7% and tracker mortgages starting at 5.25%. Several banks are also offering mortgages in Swiss Francs, starting at an interest rate of 2.46%, while it’s also possible to obtain mortgages in pounds sterling or dollars, which may be a good bet due to lower interest rates in these countries as a result of the currently economic situation.” 

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City property taxes are a very important means of collecting much need capital for your local neighborhood or city. Although nobody really likes to pay taxes, we realize that have to, or else we face legal troubles. What many people do not realize, however, is exactly what your city property taxes are used for. And people also fail to realize that without such taxes in place, your city might literally fall to pieces.

One of the biggest things your city property taxes go for is the upkeep and maintenance of your city’s streets and roads. For some areas, road repairs can be a very costly and time consuming job, as well as a huge inconvenience to commuters. But this is a job that is absolutely necessary, however. Without it the roads of our nation’s cities would be lined with potholes and lose stones, all of which can severely damage your car and even increase the risk of crash. So next time you curse your city property taxes, just remember that some of the money will be used to improve some roads that you may drive upon every single day in the city.

A good portion of your city property taxes is also used towards city greening projects, too. Because the nation is becoming more environmentally aware, and we know recognize the need for designated city park areas and adequate green space, more and more funds are being put into the development of such areas in cities all over our great nation. Since it is your tax money that is being used for these projects, you can just consider it your way of helping to save the environment. Isn’t that a much better way of looking at city property taxes?

After this, your city property taxes go to essential city services, as well. Things like keeping the roads clean and clear of snow, ice and road kill, maintaining public restroom facilities and a lot more. Without the revenue generated by city residents paying their property taxes you would find that all roads become a slippery mess in the winter months, and in summer they are littered with rotting meat from all sorts of different small animals. Without workers to take care of such hazards, the roads become even more of a danger to everyone who is driving on them.

City property taxes are also used to maintain sewer lines, electrical lines and telephone lines throughout your neighborhood, too. Without these things you would not be able to flush your own toilet, turn on the light or talk on the phone – and it is quite hard to imagine where we would be without any one of these things, let alone all of them. But by paying your city property taxes on time, telephone and sewer companies can make necessary upgrades to their existing lines, and they can better serve you if a problem does arise.

So while you might not like paying city property taxes, they are essential to the operation of our country. Everybody has to pay them, there are no exceptions – you may as well just grin and bear it.

For more information on property tax, visit http://www.propertytaxcity.com/

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Spanish property is now more popular than ever, thanks to an increasing trend for getting away from it all, downsizing and the rapid emergence of numerous low-cost airlines.

As they say, ‘timing is everything’ and currently timing is excellent. European interest rates are low and the choice of property is superb ranging from stylish apartments to farmhouse (fincas) and charming village houses in rural locations full of character – not forgetting luxurious modern and classic villas and modern Spanish resort townhouses and the new ultra chic, high spec apartments with extensive communal facilities.

Many Spanish properties provide shared facilities such as gardens, swimming pools, tennis courts and gyms.

Understandably, the coast is still favourite with many buyers of Spanish property. Government statistics show property prices will increase in Spain by between 11% and 16%. For low cost renovation projects look to Spanish inland areas where prices are often far lower.

Flexible mortgages are now available from a wide range of well known lenders. These recalculate the outstanding capital and interest daily allowing you to make overpayments on the outstanding loan whenever possible. Mortgages are also available which permit you to take a break from payments thereby increase the interest payable. A complete break from payments may also be arranged as long as there is an adequate balance in your account.

Getting the mortgage

If possible, buy your Spanish property outright. That way obviously you own the property and avoid increasing your existing mortgage debt. If a mortgage is the best way for you to purchase a Spanish property one can simply add to one’s principal mortgage or take out a new separate mortgage on your foreign property. Increasing your existing borrowings is probably one of the cheapest options. Alternatively one can consider a second mortgage on your new Spanish property or holiday home.

Having a Spanish mortgage doesn’t automatically involve dealing in foreign currency. Abbey and Barclays offer buyers of foreign property euros or sterling loans. If you intend to rent out your Spanish property the rent may be received in euros in which case a euro mortgage allows you to offset the rent against repayments.

Obviously if you choose not to rent out your Spanish property but still have a euro income of other sorts then a euro loan is sensible. However those earning sterling in the UK will find a mortgage in sterling a sensible option. This way you needn’t worry about exchange rate fluctuations. The majority of euro mortgages will be of the repayment type and also with repayment periods shorter than British loans. In Spain, many have a term of 15 to 20 years. Clearly this will impact on your monthly payment amount. loan-to-value ratios will usually also be lower and therefore may restrict the amount of available Spanish funds. Around 75% may be the typical LTV.

Different types of lenders

There will always be more than one type of lender for a second home or Spanish property . You have a choice of the large Spanish banks such as CAM, BDV and Solbank as well as almost all UK lenders. The Spanish banks are very keen to arrange mortgages with non Spanish borrowers. All the major Spanish banks have branches located in almost most mid to large size towns both inland and along the length of the Costa Blanca. Their staff will speak English and will guide you along all stages.

Your Spanish property will serve as collateral against the loan i.e. the bank’s security. Loans of around 70 -80% are commonplace. Beware though that the bank will impose fees of around 1%-2% (arrangement) of the advance and around £200 to £400 for the valuation survey.

Many recognised high street UK banks have branches in Spain for example Abbey and Barclays as well as the Royal Bank of Scotland. These are staffed by Spaniards almost all of whom will speak English and are well trained in the provision of financial packages to purchasers of Spanish property.

Many specialist mortgage brokers also exist and these are worth talking to in order to locate some of the more competitive mortgages.

Your buying checklist

Don’t forget to add around 10% to the property price to cover the unavoidable costs of the transaction.

Which location? Use (almost!) the same criteria you would when looking at property in the UK. Is your preference for rural, village, town or bustling resort? Just how important is proximity to the sea? Ditto shops, hospitals etc.

Most importantly, familiarise yourself with the region. Go there, hire a car and become knowledgeable about the various Spanish towns and villages in the area.

Check what services the property is connected to. Establish whether connections already exist for gas, phone, electricity and water. Can you get broadband Internet?

Talk to the people you meet there. Question them on the area. It’s pros and cons.

Variety is essential – view a VERY broad selection of properties. Without this you will lack any real perspective of the market and what is available within your budget.

Regarding any properties which are part of an ‘urbanisation’ discover how much the community fees are and when payable. Try to talk to the president of the community. Visit the town hall planning department to establish what if any new development is intended in the vicinity (or within view) of your property.

ALWAYS appoint an independent, English speaking solicitor. There are plenty. This is essential.

The actual process of buying a Spanish property

Firstly there will be a deposit to be paid – negotiable between £2000 and £10,000 and a purchase contract to be signed. This is known as the ‘compra venta’ and is a binding agreement which details the sale and the date by which you agree to complete.

When you complete on the property, everyone involved will convene at the notary office – a government official charged with overseeing the transaction and the witnessed signing of all binding documents. It’s at this point that the deeds (escritura) are signed. On signing the escritura one must then pay the outstanding purchase amount including all legal fees and taxes etc. This includes 7% of the agreed price on new properties or of the escritura value on a resale property.

After this stage, the necessary transfer taxes and fees are paid.. The new ownership (transfer of ownership) will be registered by the notary. This is done with the Land Registry.

This registration document is known as the and “copia simple” and you should ensure that you receive a copy.

Additional info regarding taxes and other costs

Combined purchase costs, taxes and Solicitor fees will usually equate to around 10% of the purchase price. This will cover advice on the contract, the investigation of the property title, the report on any enquiries undertaken, handling of tax payments and the procedures required for your final completion and property registration. The fees to be paid to the notary may be between are around £250 – £475. Land Registry will cost approx. £240. Clearly there may be other costs such as your surveyor, or those incurred with banks. These will vary from case to case.

Ongoing living costs in Spain typically will include Urbanisation or “Community Fees” for general upkeep and insurance of the community and shared areas such as gardens and pools.

Local i.e. town hall related taxes include a “wealth” tax or ‘Patrimonia’(around 0.2% is typical), property tax and the “IBI” – a yearly form of property tax. Like council tax this varies depending on area. Often this will include charges for rubbish collection. Insurance. Comprehensive insurance is obtainable from many insurers. Utility fees such as electricity and water.

Other considerations

It is usual for property owners to appoint a “gestor” or “fiscal representative” to handle your admin. and other fiscal affairs. One other essential document is your will. Make a Spanish will. It might cost around £150 but is vital to represent your interests in Spain.

When choosing a Spanish bank account always study the maintenance charges as they vary a lot from company to company!

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