In real estate transfers, “Valuable Consideration” is that which occurs mainly in cases of Sale, Exchange, or Distribution, and this term is used to show its contrast with “Benevolent Cause”, which is found in cases of Gift, Inheritance, Parental Gift and Bequest.
It should be noted that in the case of transfers due to an encumbrance, the Real Estate Transfer Tax is calculated at different rates, always depending on the individual case.
More specifically, the various cases of property transfer are:
- Transfer of property by adverse possession
The term “adverse possession” (ordinary or extraordinary) refers to the way that one can acquire ownership of a movable or immovable asset. According to the definition of the phrase, it is the acquisition of an asset by the person who uses it but does not own it, and, in effect, the person claiming usufruct wishes to own an asset because he considers it to be his.
- Transfer of property by usufruct
The transfer of real estate by sale and purchase can take place when not the full ownership is transferred, but the bare ownership is transferred and the transferor keeps the usufruct for himself. That is, he or she retains the use of the property either for life or for a specific period of time, such as until the bare owner comes of age. When the period of usufruct expires, i.e. when the usufructuary passes away or the bare owner comes of age, then the ownership from bare becomes full and the usufructuary no longer has any rights to the property.
- Transfer of property by inheritance
The transfer of a property can be effected by inheritance through a will, whether in writing or in public (before a notary), signed by the testator. In this case, there is a transfer of property after death. In the absence of a will, the heirs are considered to be the relatives in proportion to the degree of kinship according to the law (legal fate). The heirs then have the option:
- To accept the inheritance.
- To accept the inheritance with the benefit of the inventory. They will therefore be liable for the debts in a limited way, i.e. up to the value of their share of the inheritance.
- To renounce the inheritance immediately, so that they are not liable for its debts (with a time limit of 4 months from the death or the publication of the will).
- Transfer of property with a lien or mortgage
The encumbrances of a property, consist mainly of liens and mortgages registered by the owner’s creditors (e.g. banks, so we have the case of transfer of property with a loan) or by the Greek State, as well as by natural persons. However, buying/transferring a property with “encumbrances” is both feasible and safe.
In this case of transferring a realty, the seller is required to provide the buyer with a letter from the bank stating the amount required by the bank to secure its consent to the elimination of the encumbrance. This letter shall be presented at the beginning of the transfer, prior to the drafting of the notarial deed, in order to:
- be an official, up-to-date information to the buyer on the amount of the debt, and
- ensure that it is covered by the purchase price.
- Transfer of property by parental gift deed (or transfer of property to a minor)
The transfer of property by parental benefit is only between parents and children, and a notarial deed is required. It is a contract of donation in which the child must accept the property. The parental benefit tax, which varies according to the value of the property, is by law payable by the person accepting the parental grant.
- Transfer of property by donation
A donation is a contract between the Donor and the Donor, whereby the Donor grants and the Donor accepts the property (for example a grandfather to a grandchild). The Donor can set specific conditions, which if not met, he has the right to revoke the gift. The gift tax, which depends on the value of the property and the degree of kinship (if any) of the parties, is legally borne by the donor.
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