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Very Hot Topic (More than 10 Replies) EOT Licence and letting your Greek house. (Read 11370 times)
margaritari
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Re: EOT Licence and letting your Greek house.
Reply #12 - 09. Aug 2007 at 01:40
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We have been told by both our accountant and lawyer that any income arising from renting property in Crete must be declared to the Greek tax authorities who take the view that the property is here so the income must declared here.

The only circumstance in which it is legal to rent out property without an EOT licence is if the letting is for three months or longer and the authorities are checking more and more.

It should be borne in mind, too that the tax authorities can be a law unto themselves here. If they check when someone who is not strictly a friend is staying what happens? How do you prove you haven't been paid? Suppose the tax man simply refuses to believe that they are non-paying guests. Show your bank statements? "Ah, you must have been paid in cash."

It has happened and the authorities dreamed up a notional weekly rental, multiplied by the number of weeks from the first tourist flight arriving and demanded the tax on that (this happened in mid-August a couple of years ago). The property owner also got hit with a 10K fine for good measure. Is it worth the risk? All it takes is one phone call from a licenced owner who is having trouble renting their property and believes it's because you're undercutting them as you're not paying fees and tax.

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Re: EOT Licence and letting your Greek house.
Reply #11 - 08. Aug 2007 at 18:23
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As a matter of hypothetical interest, how would the Greek authorities find out if somone was renting or just 'giving' their home over to friends? 

Over the past few months we've had numerous friends and family here and my neighbours might be wondering if I'm renting out part of the house.  I don't have an EOT licence and don't intend to rent but if I did then the simplest thing to do would be to have any rental monies paid directly into a UK account. 

It's my understanding (although I'm not an accountant) that an EU resident in Greece has to declare any interest earned on monies held in a UK or EU bank account (if resgistered as a UK non resident and not paying basic tax on interest earned) or pay the EU wide with holding tax (currnetly 15%) if the account is offshore in somewhere like Jersey, Monco etc.  If you decide to pay the EU with holding tax then your bank deails are not given out to any EU tax authority - which obviously includes Greece.

I'm assuming that all UK non residents are still allowed to earn 5025 UKP tax free (their personal allowance entitlement) on monies earned or paid into a UK account as unearned income and therefore if I, for example, rented out the house to fellow Brits and the monies were paid directly from and into a UK account (and they were less than the tax free allowance) then presumably  I'd not pay tax on the monies earned if they remained below the personal tax threshold.  What's more, if those monies were under the personal tax thresh hold you would be entitled to a rebate on the basic rate of tax levied on any bank account interest they might attract - although 5% of 5020 UKP would be relatively minimal.

I would be surprised if the UK tax authorities could (or would) check where this money was coming from as long as it was not more than one's personal allowance and therefore not subject to UK tax.  This being the case, how would the Greek tax authorities ever know whether the house was rented or being 'given' to friends, family etc?  In point of fact, the rental could be shown as a 'gift' and from memory you can receive monetary gifts up to 3000 UKP per year without incuring capital gains tax.

I appreciate the above is hypthetical but it would seem an obvious way to get around the EOT question if renting every now and again, rather than making a business out of your Cretan residence.  (You could presumably double this figure to 10,050 UKP if you were married (or had a partner) and your partner had a separate account i.e. he / she would have their own personal tax allowance.)


Jon

  

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Eleni13
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Re: EOT Licence and letting your Greek house.
Reply #10 - 08. Aug 2007 at 11:59
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Quote:
Erik

Eleni13 has explained at length her recent experiences. They are an invaluable insight.  It would be my advice do not try to short cut and do things on the sly. Crete is not the easy going place it used to be. It takes just one snitch from someone and you could find yourself in terrible bother with the authorities if you are caught doing something you should not. 


I agree with Gerald's comments.
It is not for nothing that a very large number of additional civil servants have been drafted in to Crete to clamp down on EOT dodgers.  You might just get away with letting to "friends" for a while, but you only need to upset one neighbour........ Smiley Smiley
  

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Re: EOT Licence and letting your Greek house.
Reply #9 - 08. Aug 2007 at 01:19
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Erik

Eleni13 has explained at length her recent experiences. They are an invaluable insight.  It would be my advice do not try to short cut and do things on the sly. Crete is not the easy going place it used to be. It takes just one snitch from someone and you could find yourself in terrible bother with the authorities if you are caught doing something you should not. 

By all means it is good to take advice from as many people including your architect. If he/she are Greek, then what the Greeks do and what we foreigners are expected to do are two quite separate things. Just consider the fact that you will always be a 'guest' in this country and be expected to act accordingly. Perhaps that sounds harsh but that is the reality. If in doubt there are EOT Permit offices in Chania and Heraklion, these are listed in the EOT Permit article referred to below.

The main web site of Brits in Crete contains much useful information on expat life in Crete including in this instance a whole page devoted to EOT and rental licensing.

The EOT article can be found at www.britsincrete.net/eot_permit_crete.html

Hope that helps
Gerald

  

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Re: EOT Licence and letting your Greek house.
Reply #8 - 07. Aug 2007 at 22:27
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I was told by the engineer/architect that an eot license is not realy obligatory, but if you want to rent your house out through an agency or like hotels who deal with big companies,  you have to have one...and depending in which category you are, you have to renew the EOT every so often....

If you own a house, there is no law saying you can't rent it out without an EOT, you simply can't work with an agency or better to say, they won't want to work with you....

Anyone any comments ?
  
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Re: EOT Licence and letting your Greek house.
Reply #7 - 18. Jul 2007 at 14:59
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Thanks for your help Eleni.
  
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Re: EOT Licence and letting your Greek house.
Reply #6 - 17. Jul 2007 at 11:25
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We started the process as soon as the house was finished in 2003, leaving it to our architect. Big mistake. The paperwork was too time consuming so it was neer completed.

I would recommend that you use an EOT specialist, as the rules are complex and it is worth the money. It will cost iro 3000 euros, but the fine for not complying would be larger, not to mention the rattling of Greek jail keys, according to our Greek friend. He might have been joking on the latter.
There is one in Chania. I have sent you a PM.
  

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Re: EOT Licence and letting your Greek house.
Reply #5 - 16. Jul 2007 at 16:29
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Click the search button above, enter OET in the "Search for" box.  In the drop-down menu lower down select (All Posts) and click the search button.

This will produce 30 references to EOT from several threads.  To see the whole thread click the words which are underlined in each heading.

Also, on the main BritsinCrete site type EOT into the search box and choose This Site.  This will bring up a list of articles on the site about EOT licences.

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Re: EOT Licence and letting your Greek house.
Reply #4 - 16. Jul 2007 at 15:36
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Hi Eleni
Thanks for posting the info. I wonder though if you or any other members can give me some advice on the subject of obtaining the EOT.
My wife and i have recently had a house built, originally for our own holiday use then in the future as our home come retirement time. We are now having second thoughts about (just our use) because of the lengths of time it is empty.
What are the criteria for a rental property? I.E  room sizes, emergency exits etc? Where do we make enquiries about obtaining the EOT? Also the Costs involved in obtaining the EOT.
I would appreciate as much advice on the subject as you readers can give me.

Please accept my advanced appologies if the subject has been covered before but i am fairly new to the forum.
  
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Re: EOT Licence and letting your Greek house.
Reply #3 - 16. Jul 2007 at 13:40
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Usually to have a licence everyone in the apartment block has to have a licence    Sad
  
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Re: EOT Licence and letting your Greek house.
Reply #2 - 16. Jul 2007 at 12:55
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Hi how does it work for an aprtment in a shared block then I.E i want to lease my aprtment but my neihbour doesnt rent theres?? any ideas??

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Re: EOT Licence and letting your Greek house.
Reply #1 - 16. Jul 2007 at 11:42
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Thanks for the Info Eleni,

Its like a minefield trying to find out whats required, so any clarification is gratefully received. Could you let me know which letting agency you use. I have been hunting for a good one for some time.

I bet even though the process has been simplified the costs for obtaining a licence wont come down!!!!!

Thanks again.

Julie
  

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EOT Licence and letting your Greek house.
15. Jul 2007 at 14:31
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If you are intending your Greek property to be a "buy to let", please read the following info. gathered from a specialist in EOT last week. We have been told that a massive number of extra staff are now employed to chase up property owners who don't have a licence.

Tourist Licence Changes

If a property is to be let the owner must acquire a Tourist Licence (EOT).  Some tragic recent events have resulted in a serious hardening of the rigour with which the law with respect to EOT health and safety requirements is applied.

Originally the need to obtain EOT sub-licences (proof of maids health, lifeguard licence, Pool Cleaning Certificate, First Aid Certificate etc) did not discriminate between different types of leased property.  This blanket treatment resulted in many owners leasing their properties without obtaining an EOT.  Recognising that leasing a simple house is different from running a hotel, a change has been made to the law to make the application more relevant to the type of building involved.  The EOT is now divided into categories, (category names are unknown but assume 1, 2 and 3 for simplicity):

1.      Hotel
2.      A Multi House Property, i.e. a piece of land on which permission from a single planning application has been granted to build more than one house.
3.      A Single House Property, i.e. one for which planning permission has only been granted for the erection of a single dwelling.

Forget category 1 (unless you are planning to build an hotel).

Category 3 applicants will find the application process lengthy (many months at least) but achievable despite Greeces love affair with bureaucracy.  It can be made much less demanding (but more expensive) if the applicant uses a specialist to undertake the process.  Prior to being granted an EOT the owner will, amongst other things, have to prove that the house meets all building regulations.  The house will also be inspected by the Fire Dept.  If necessary the owner will be expected to install fire extinguishers, fire hoses, emergency exit signs and so on in the house.

It looks as if Category 2 will present an extra layer of difficulty because it is treated as if it is a hotel for EOT purposes.  For example, imagine that a property developer buys a piece of land and under a single planning application is granted permission to build a number of houses on it. He then splits the land and sells each house and its plot to individual owners.  This is very common practice.  However, the new law assumes that if a piece of land has permission to build more than one house on it and an application for a tourist licence is made for any of the houses then the requirement of the applicant is to lease all of the houses covered by the single planning application.  Even though each house is owned by different people each EOT application will have to cover, in addition to all the requirements of a Category 3 dwelling, the sub-licences touched on in the second paragraph.

Since the fines for letting property without the necessary EOT are swingeing, it is worth starting the ball rolling as soon as possible.
On the subject of letting, it is our experience that the profit to be made, after all local expenses have been deducted, is relatively small. It would not, for example, cover many mortgage repayments. We use a UK holiday firm, it is possible that more profit could be made by letting privately, but the income would not be guaranteed.



  

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