Article in RED Invest in Greek Real Estate Market Magazine: From Sophia Grigoriadou, Lawyer / Managing Partner of CPA Law, member of KPMG’s international Legal and Tax services network
As the Greek Luxury tourism and private residences market is booming, the discussion inevitably turns to the development of exclusive islands, private or public. With two to three hundred (or more) uninhabited or seasonally inhabited islands, Greece is the perfect destination for the development of exclusive private island resorts or luxury private developments. The proximity to the mainland of a European country, the unparallel beaches and the beautiful landscape create unique circumstances for such investments.
The Greek islands or islets appropriate for development may be private and therefore transferable, or public, in which case they may be eligible for leasehold. A detailed legal due diligence will be required in order to identify the legal ownership and the options for development, as well as to address any complexities that may arise due to the complicated ownership history of certain islands or legal implications restricting their sale in some cases. If the island is public, governmental procedures shall be instigated and applied.
Relatively recent Law 4759/2020 regulated the building and development classification of uninhabited islands, private or not. However, the planning and permitting of the development may still prove to be an uncertainty factor. To mitigate this, it may be required, or advisable, special planning and development frameworks to be considered in order to ensure the necessary clarity for the development. The NATURA protective framework shall also be considered as in other similar areas.
As to be expected, in a country as rich in archaeological remains and other protected cultural monuments as Greece, the development will require the appropriate authorities’ approval. Similarly, the necessary clearances from the forest authorities shall also be obtained. Under certain circumstances, a special preapproval may also be required if the island is near a national border or in an area characterized as border area for national security purposes.
The development of private islands always has other, non – regulatory, challenges such as water supply and utilities connections, access and logistics issues, which may prove to be more complicated in the Greek islands case since each one may be a unique unprecedented development case.
Regardless of the challenges, as the Greek real estate market matures and becomes more and more a strategic sector for economic development, growth and foreign direct investment, the Greek exclusive islands shall unavoidably attract more government attention. The transformation of the Greek real estate market with big development projects completed or underway, in combination with the proven foreign investment appetite for Greek real estate assets and the demonstrated government intention to implement measures facilitating such investments, are very good indicators that the development framework for exclusive islands can be streamlined allowing investment efforts to be successfully completed. The success of such investments will depend on the sustainable design of the projects and the respect of the carrying capacity of the islands, which may be ultimately tested before the Greek Council of State.