Another increase in the property tax

24 October 2013 / 20:10:31 GRReporter

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According to the Ministry of Finance, the new tax, which will be introduced as of 2014, will be 16% lower than the tax collected at present.

However, the Ministry does not include in this estimate the taxation of plots and agricultural land, which will be subject to taxation for the first time.

Those who possess only houses will probably pay less in taxes than they are paying at present but those who own land or a field will pay a very high tax.

When the uniform tax is imposed on the property, it will be divided between its co-owners, depending on the percentage of ownership.

All property will be subject to taxation, except the property belonging to the narrow public sector. All other government agencies, non-profit organizations, etc. will pay a tax on the property that is not used by the owner except for the property attached by the state without any compensation or which should have been exempt from taxation or compensated for land acquisition but the state has not done so.

People with financial difficulties, who are unable to pay the tax, especially if they have three or four children, will be fully exempt from the tax. Legal persons who cannot pay their tax obligations for various reasons will be able to defer the payment of the tax.

The uniform property tax is divided into the following three main categories:

1. Inhabited house duty. The tax is levied on all buildings in the same way, regardless of the owner. The tax is imposed on the area of the building per square metre (sq. m). The main tax ranges from 2.3 euro/sq. m to 17euro/sq. m and is determined on the basis of the current price of the zone where the building is located (the number of the tax zones is 20) and subsequently formed depending on the characteristics of the building (age, floor, number of fronts, auxiliary spaces). Special purpose buildings (e.g. industrial buildings, agricultural warehouses, etc.) have been specifically considered as well as some special circumstances, such as unfinished buildings.

2. Tax on regulated plots of land. The tax is imposed on the area of land, per square metre, depending on its unit price (the number of tax zones is 25) and ranges from 0.02 euro/sq. m to 30 euro/sq. m. The unit price of the plot is derived from the total price of the plot (on the basis of the characteristics that are used at present) divided by the total area. If there is a building on the plot, then the tax is imposed on the area that remains after the application of the coefficient of land use. In this case, the tax on that part of the plot that is taxed decreases by 25%. Special arrangements have been provided for plots of limited use in general, such as airports and industrial zones as well as for special cases such as plots in which there are carrier beams or strips of land for railway tracks.

3. Tax on unregulated plots of land (agricultural land). The main tax amounts to 0.0015 euro/sq. m (1.5 euro/acre) and is subsequently formed depending on its initial basic price (which includes the main features of the geography of the area) and a number of other factors such as the use of the plot, its distance from the sea and whether it borders a road of the national road network. The presence of a house in the area, which is not the only house of the family, suggests a different use of the plot and therefore the tax on it increases. The high taxes on large plots, over 130 acres, have been specifically considered as well.

Additional costs for owners of land in expensive areas

The property tax that will enter into force in 2014 will bring significant additional costs to the owners of regulated land. The highest increase will affect the owners of land in areas with a high unit price of the land and those who own a building within the plot.

The uniform tax on that property is the result of multiplying the area, in square metres, by the tax rate (Tax = area (sq. m) x tax rate).

How to calculate the unit price:

The unit price of the plot, per square metre, is the ratio of the tax base of the plot to its total area. There are 25 ratios for regulated plots, depending on the unit price.

The calculation of the tax base depends on the following:

a) the ratio of the plot and the total initial price of the plot, and the ratio for the use of the plot.

b) if the plot borders a street/road; the tax base is 1.00 for bordering only one street/road, 1.08 for two or more streets/roads or streets and squares, and 0.80 if the plot does not border a street/road.

Increased tax on agricultural land, fields and plots with a building

The owners of agricultural land and unregulated plots will pay a tax for the first time in 2014 under the bill of the Ministry of Finance which has been submitted for public consultation. In the majority of the regions of the country, the tax is relatively low but in the more expensive areas, such as Mykonos, it is higher. Moreover, if there is a building within the boundaries of the plot, the tax increases even more.

The tax on agricultural unregulated land/plots depends on the area where the property is located, on its distance from the sea, its use and on whether there is a building there. According to the bill the tax on agricultural land is formed by the basic tax rate set at 0.0015 euro/sq. m in combination with the following factors: