Wednesday, 5 September 2012

New Tax-Shock: Greece’s Property Owners to Pay “Rent” for Living in their Own Homes

New Tax-Shock: Greece’s Property Owners to Pay “Rent” for Living in their Own HomesPosted by
Greece’ property owners will become “tenants” in their own homes and pay “rent” in form of property taxes, should Samaras government plans on property taxation come true. The country’s economic team plans to unify all different taxes and fees and emergency levies that already lay heavy on the shoulders of real estate owners living in Greece.
The new single property tax will replace the Tax on Real Estate (FAP) and the Emergency Property Tax (sent via the electricity Bills).
  • The FAP yearly charges owners of homes and land plots with  0.2% up to 2% of the objective value of the property after the amount of 200,000 euro (of property value) is being deducted as tax free.
  • The Emergency Property Tax is applied to home properties and commercial real estates, charging 0.5 to 20 euro per square meter depending on the property value zone and the age of the building.
The new unified property tax will be applied to all kinds of real estate and properties: houses, apartments, commercial real estate, fields, landplots and other kinds of property such a pastoral fields - even those outside towns or settlements including land areas with installed solar panels (photovoltaic).
Exempted will be agricultural fields in rural areas that are cultivated.
Even though Greece’s economic team is still working out the issue, the new system will tax even property that was exempted until now and will cancel the tax free amount of 200,000 euro.
The new tax will affect 5.6 million natural and 1 million legal persons with the aim that the Finance Ministry will collect 3 billion euro on  annual basis beginning 2013.
The new property tax is being in the context of new taxation system [that is being 'sold' to Greeks by the government and the Troika as more 'fair and just']. (source: Eleftheros Typos via, Proto Thema,
So far it has not been revealed how new tax will be calculated. But if one takes into consideration that the tax free amount will be scrapped, a “rent of 200-300 euro” per month for a property owner of 100 sq.m., for example, is not in sphere of imagination and sci-fin-fiction.
I remember -maybe 2-3 months ago, some reports in the Greek press saying that the Troika wanted to impose a ‘rent’ to property owners.
There is also one legal trick in the whole single property tax: The Supreme Administration Court in Greece had ruled last winter, that the Emergency Property Tax was in comply with the Greek Constitution only because it was temporary for two years (2011, 2012). The Greek Finance Ministry would violate the Constitution, if it would impose it also for 2013. So the easy legal solution is to unify the property taxes and collect E.P.T. under another name. 

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