Question: My wife and I are in the process of buying an apartment in Crete. I would like to buy a renovation property but am a bit concerned about the IKA permit. There are a few questions I would like answering please:
1) What is it?
2) Why can it make a cheap home so costly?
3) Why do you have to have it?
4) How is it paid?
5) How much is it?
6) Does it go on the price of the house before it was renovated or after completion?Answer: I.K.A. stands for the Institute of Social Insurance and basically it is responsible for the national insurance for all workers. The I.K.A. Authority is powerful and by Greek law all legal employees must have their I.K.A. paid, whether they work in a shop, office etc. or have a trade such as a plasterer, tiler and so on. By you doing the work of a plasterer for instance, you are doing the State out of that worker’s national insurance and so must pay a percentage of the amount they would have received, even if it is no financial benefit to you.
As the owner of a property you are responsible for I.K.A. payments to the I.K.A. office and if a check is made by the by the I.K.A. authority you are liable for a fine if you have no I.K.A. receipts. Often, an on site check is made by an I.K.A. representative to see if the works carried out match the works you state you have done and if the workers are covered with their I.K.A. contributions/payments. You will not be able to re-sell the property without the final I.K.A. certificate (or Building Permit if applicable).
If you are doing major renovation works yourself, you are obliged to infirm the local I.K.A. office before the beginning of each building work stage. To do this, you will need to complete in Greek, a special pre-printed form which you present together with various documents, including receipt that prove corresponding contributions have been paid to obtain a Building Permit (if required) relating to the relative works, plus passport and ownership contract. You have to present paperwork within a certain amount of time and there is also a time limit for payments after which fines are imposed.
Once various works are completed the I.K.A. authority has to be informed at the end of each stage, in writing, so that they can go to the building site, inspect and balance the payments, update the file etc.. Their final stamped certification is important.
Depending on the size of the building, self employment is taken into consideration, if the owner of the building or his blood relatives can prove that they have been insured in whatever the pertinent trade is, for at least 600 days or at least 100 days for a simple manual labourer, for the specific job they are intending to do, i.e. if you want to locate tiles, you must have already paid contributions in the past for tiles.
The amount for each job is worked out to a standard formula at the I.K.A. office.
Now you can understand why what initially looks like a cheap renovation job, can turn out more expensive. This is without taking in account whether you must apply for a Building Permit, for instance if you are changing a roof, altering m2 size of the property, putting in windows or doors and so on. It is not just making the payments, but the paperwork and visits to the I.K.A. office that can be time consuming and sometimes frustrating.
If in doubt, it is worth consulting and paying an architect or civil engineer for advice and to complete the I.K.A. paperwork for you.
If you re-sell your property then you can take into account the amount of I.K.A. that you paid, plus cost for a Building Permit if it was necessary and incorporate this into your sale price. In any case, during a sale it must be proved that you have no debts towards I.K.A. otherwise you cannot re-sell.
Question: We intend to retire to Crete, around the Chania area. We would like to rent for the first 12 months to give us time to look for the home we would like to buy. Is there anyone you know that does long-term rentals? We do not want a holiday apartment but would prefer something like a house, as we may decide to rent long-term and keep our money as security, in case we feel the need to return to England.
Answer: Some of the Estate Agents do arrange rentals and a lot of holiday home owners are happy to rent out their houses, although of course some of these homes are built for summer use only and may not be suitable for winter. The best thing is to come to Crete and visit some of the Agents and see what is available. However, when you come over, you will probably need to put down a deposit and make a contract for a rental term. Make sure you use a LICENSED Estate Agent, which is registered with the Chamber of Commerce.