ECONOMY

Private islands in Greece available for the price of a London home

The prices of private islands in Greece are becoming ever more attractive to foreign buyers, having declined 40 percent on average since the start of the financial crisis at the end of 2008. One can now purchase an islet under the sun at a similar price to that of an average-sized house in a London suburb. For instance, the asking price for privately owned Mikri Lesvos, an islet off the coast of Pamfila village on Lesvos, is only 800,000 euros.

Estate agents who monitor the market for small islands say that the political instability of recent weeks has not had a major impact on demand given the attractive rates in the Greek market compared to other countries. However the political uncertainty is being used as an argument by candidate buyers in a bid to reduce the asking prices.

Supply is not a problem, as it is estimated that as many as 50 private islands are now up for sale around the country and there is far less red tape when buying a privately owned islet than one that is state property.

In fact, over the last few months there has been a significant jump in supply as increasing numbers of owners (a large portion of whom are inheritors and not the original buyers) realize they can’t afford to cover their tax obligations. The implementation of the single property tax (ENFIA) automatically meant the taxation of private islands, which amount to plots outside town planning. This has added another significant cost to the ownership of islands, forcing many owners to seek buyers.

In addition, recent legislation that offers a five-year residence permit to non-EU citizens who buy properties worth at least 250,000 euros has opened up the market further to wealthy investors such as Arabs, Chinese and Russians.

On the other hand, due to environmental protection laws, it can be very difficult to secure a construction permit on some of the islands, especially if there are no other buildings already there. These are the main reasons preventing some investors from acquiring a private island, even if they are not planning on using it for tourism purposes and just want to build their own holiday home there.