The Greek government announced measures for lowering real estate taxes as part of their tries to revive the construction sector, which together with the tourism one was hurt the most from the global financial crisis. The public sector will guarantee 25% of an apartment’s loan, so that together with the 75%, which commercial banks ensure, 100% are formed for the value of the estate. Until now, Greek banks were giving 75% of the loan and the buyer had to find a way to pay the rest 25%. This measure will be for everyone who wants to buy an apartment or office until 21.12.2010.

Aiming to facilitate the buyer, the government decided to decrease also the notary fees to 1% from the total value of the bought estate. Right now the fee is 1.2%. The interest taxes of the purchased estate will increase from 20% to 40% and this will apply not only to the first apartment but also to every other, smaller than 200 sq.m. and costing less than ?350 000. The measure applies to loans, which were taken after 01.01.2009 and until the end of 2010. Besides this, the state will give out loans for repairing and improving the heat insulation of old houses, built before 1980.

According to real estate brokers, the measures will help for the sale of at least 100 000 apartments, which are empty right now but will not help constructing new buildings. Bankers claim that the low taxes will keep the real estate prices high. HSBC bank characterized the measures to be positive for banks but not so good for the building contractors. The financial institution believes that such measures will bring back the client’s trust in apartment loans but the state guarantee will limit the banks’ desire to give out those loans. This desire is very limited right now due to the unemployment rate, which led to many outstanding loans and high real estate prices, which according to the International Monetary Fund are 10% higher than they have to be.

The bank also claims that the state guarantees will reach ?2.5 billion, because it is expected that until the end of 2010 the given loans will be ?10 billion.