Types of Ownership
You’ve dreamed for years about your home in Greece – where it will be, the taverna meals you will eat, and the summer sun. Now comes one of the logistics of buying a home in Greece – what kind of ownership you want. There are a few categories to consider when it comes to ownership: horizontal vs. vertical ownership, sole vs. joint ownership, and usufruct vs. bare ownership.
Horizontal vs. Vertical Ownership
These terms refer to how a given property or piece of land is divided among the owners. They determine what parts of the property or land you have access to and in what parts you can build additional features.
Horizontal Ownership
In the purchase of a horizontal property, the buyer gets a part of a building (usually an apartment or a basement) as well as a share of the common areas of the building (staircase, parking lot, garden, etc). For our Dutch readers, this is known as “appartementsrecht.” The percentage share of the common areas are not always equal for every horizontal property.
If you want to build an additional feature onto the home like a pool, a pergola, or a barbeque in a common area, you may need to get the consent of other co-owners. To do this, you will likely need a specific permit, called “small-scale” permit. This, depending on the exact work that you want to do, would require the consent of either all the owners or a majority of the owners. The exact conditions for each permit is assessed by an engineer.
Vertical Ownership
You can think of vertical properties like plots. Unlike in horizontal ownership, there are no “common” areas which are divided among a number of horizontal properties. Instead, owners of vertical properties own both the building and the surrounding area. In general, vertical properties are considered much more independent, as you do not engage in any kind of co-ownership. There are some exceptions to this, including if there is a common parking lot, a tennis court, or a network of walking paths.
Note on Horizontal/Vertical Ownership
There will probably be a regulation established by the very first owner of the land, who did the division of the properties. This regulation may have limitations for certain owners. It is a good idea, before you buy a horizontal or vertical property, to have your lawyer check this regulation.
Sole vs Joint Ownership
These terms refer to how a single property is split among two or more owners. This will pertain to you if you are planning to buy a home along with a spouse, a family member, or a colleague.
Sole Ownership
Sole ownership is the most simple option, where an individual owns the property. The individual is able to sell, gift, and bequeath the property without getting permission from someone else.
Joint Ownership
Jointly owned properties are held in the name of 2 or more parties, like husband and wife, business partners, friends, and family members. One reason to jointly own a property is that one party may want to sell their share later on. The payment can be a 50-50 split, or one partner can have a larger share of the property. Each owner is able to transact, sell, or bequeath their part of the property without consulting the other owners.
Usufruct Ownership
Usufruct is a legal right that allows an individual the temporary right to use and gain an income from someone else’s property. Imagine a father who owns a rental property, and their son/daughter who will eventually own the property themselves. The father grants the bare ownership to the child and keeps the usufruct right for himself. This way, the father is still the one to use and gain income (fruit) from the property (e.g., rent it), and the child has the bare/naked ownership. This means that when the usufruct is terminated, the child will become the complete owner of the property.
As long as the usufruct exists, if the owners wish to sell the property, all owners (usufruct and bare) will have to consent to the transfer deed. The granting of a usufruct right on immovable property must be completed before a Notary. According to the owner’s wishes, the Notary can specify a duration or have it for life, which is the most common choice.
Understanding the various property ownership structures in Greece, such as horizontal and vertical ownership, can help you make an informed decision and ensure your investment aligns with your lifestyle and financial goals
For more information about usufruct ownership, reach out to our legal team at contact@elxis.com.
