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Property tax six times higher from 2010 to date

30 January 2013 / 21:01:32  GRReporter
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In less than three years, Greeks have been paying six times higher property taxes as shown by the comparative data of tax authorities, according to which 487 million euro from property taxes entered the budget in 2010, whereas this amount is expected to reach a total of 3.2 billion euro in 2013.

The government is planning to impose a new tax on property, which will replace the previously existing series of property taxes. According to the government plans, it should bring into the treasury a total of five billion euro by 2014. Real estate market experts comment that property in Greece is perceived as the goose with the golden egg. The government is trying to do everything possible to withdraw as much money from citizens through property taxes as possible.

The data from recent pieces of research indicate that half of the property owners are unable to pay the property tax already levied. The head of the federation of property owners Stavros Paradias believes that a series of property seizures will follow because the citizens have no means to make the payments due to the state and the market prices are significantly lower than the tax assessments.

The economic commission of the Ministry of Finance is currently considering three different options of how to calculate the new "super" tax, as Greek media are calling it. The government suggests that there should not be a tax-exempt threshold and the tax rate should vary between 0.05% -0.1% of the tax assessment of the property. Another proposal on the table of negotiations is to introduce the inhabited house duty for properties with tax assessments of over 50,000 euro and for the rates to be respectively 0.05%, 0.1% and 1.5% of the tax assessment. In this case, the more expensive the property, the higher the rate imposed.

The third scenario that seems to be the most favourable and least feasible is to introduce a tax-exempt minimum of up to 100,000 euro for the tax assessment of a property. Properties with higher tax values will be taxed on a scale that would start at 0.1% and properties with tax assessments of over 3-4 million euro will be subject to a tax rate of 1.5%.

Meanwhile, in the fifth consecutive year of negative growth, market property prices began to fall below the tax assessments. According to Mega TV, a flat of 108 square metres in the residential district of Exarcheia with a tax assessment of 135,000 euro is now selling for 100,000 euro. Much more serious are the differences in remote neighbourhoods, and in the centre of Piraeus, where the tax assessment of a flat of 90 square metres is 85,000 euro but its price is 48,000 euro.

The federation of property owners wants the government to revise the taxation of property purchased with a housing loan or a mortgage. They insist that if the house belongs to the bank, the citizens do not have to pay a tax on the full amount of the tax assessment until the property is paid in full.


Tags: EconomyMarketsReal estateTaxesGreeceCrisis
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