2019 is an an election years in Greece.
Why Does This Matter?
Elections in Greece are like a crazy free for all. After the current Government got into power by promising Greeks free stuff like money and taxes on the rich and saying no to the Germans, the Government did an immediate about turn and an literally rolled over for the EU.
Greeks have not forgotten this and the Government ruling party – uber left Syriza – has been involved in scandal after scandal involving corruption, incompetence and all the usual ills associated with left wing governments.
Sadly the opposition is the same old guard who messed up the Greek economy last time. Although it would be hard to see how much worse even the cause of the 2011 crisis was than the total mess the current Government have made of it.
Well as non Greeks we are mainly interested here in what the outcome of the next election might be in terms of how it affects us directly as property investors, foreigners in the country and the economy and property market in general.
So what is the good the bad and the ugly likely to look like after the 2019 Greek elections?
- Greek tenancy law is pretty balanced between the rights of the tenant and the rights of the property owner
- the market is still well undervalued and there are still bargains to be had
- The EU is still tolerating the shenanigans of the current Government and there’s no sign of Greece pulling out of the eurozone
- Greeks are obsessed with property rights, so even a full on left wing Government like this one cannot even go as far as an alleged right wing Government in the UK to remove property rights from landlords
- Recent laws concerning citizens that owe money to the State means they can now opt to pay over many years at low interest rates – great for assisting distressed sellers to get rid of their debts
- There’s no Capital Gains Tax on the sale of Greek property held in your personal name
- The longer the time passes since the crash in 2011 the more Greeks will start to get back to normal – there are even new banks starting in Greece without the swollen balance sheets of bad debts – these banks are ready and willing to lend.
- The court system is political and biased towards Greeks against foreigners. Whilst we haven’t tested this yet always bear in mind when you make a contract in Greece you might not get a fair hearing in a court – anyway disputes are always about money so always better to settle than pay those Greek lawyers, right?
- If the current Government continues it will feel emboldened to strip more taxes from everyone to pay for their political give aways. This is likely to include capital gains tax. Currently CGT exists in Greece but ‘isn’t collected’ – a very Greek solution but useful for investors
- The new regime for paying the State for back taxes etc will probably mean some sellers are no longer so motivated to sell
- Owning property as a corporation is likely to be more complicated and more taxed
- Xenophobia is rife in Greece. We thought it was just a small minority but it pervades the whole of society – it’s likely there’s a backlash against foreign investors especially the more visible minorities like the Chinese. The Greeks want their cash but don’t want the people.
- More riots. The Greeks are more violent riot prone than even the French. Mostly it’s tedious but if there are more high profile riots in the city centre (the anarchists hang out in the Soho of Athens that is at once distressed and up and coming) then this could slow down the regeneration of the city with foreign investors
At the end of the day no one really knows what’s in store for Greece. If the old mainstreamers get in then we can expect a lot of civil unrest. Even with a hard core marxist government there’s been a lot of rioting. With a centre right party in power that could get worse.
But a new Government could come in and sweep away all the rot and start looking at how successful Portugal has been in attracting real foreign investment and in welcoming those foreigners, too.
It doesn’t take much imagination to a) make way for foreign investment and stimulate growth and jobs and b) get the economy back on track.
Whatever happens we’ll be in there buying and transacting because whatever state the market is in, there’s always a seller and always a buyer – it just depends on the terms to make a deal!