NEW TAX SCHEME FOR GREEK PROPERTIES
Minister of Finance proposal for the taxation of property was presented to coalition government’s members.
The Minister of Finance, G. Stournaras, presented to representatives of the three parties supporting the government, a new type of permanent tax which will be imposed on all properties, in or outside city plan.
According to the new tax system, which will be applied in 2014, tax will be imposed on each property separately and not on the whole estate. In addition, the new tax will cover an enlarged tax base, without any taxable limit and with few exceptions.
Buildings within the city plan: The tax will be calculated on a square meter basis, starting from 1,8 euro per sq.m., and according to a scale with 33 rates and depending on each property’s characteristics, will come up to 32€/sqm for a luxury property.
Land plots and properties outside city plan: It will be calculated on an acre basis, starting from 1€/acre and depending on the characteristics of the property, may reach even 60€/acre.
This law is expected to alleviate taxpayers who own just a residence. In this case, the tax would be less than EETIDE (tax paid via Pubic Power Company), due to the application of lower rates and the use of extended criteria. For example, a taxpayer who owns a 100 sq.m. apartment at Peristeri, today pays 380€ for EETIDE, but according to the new system, his tax payment is estimated approximately at 150€.
On the other hand, taxpayers who have in their possession more than one property will face a significant burden. Moreover, detached houses’ owners will have to pay a much heavier tax, as an additive amount will be imposed on the plot. Heavy charges will also arise for sea front plot owners.
The main differences between the EETIDE and the new tax are:
- The tax will be imposed on inside and outside city plan plots and not only on electrified areas.
- A new tax is prepared for covered outdoor spaces and illegal buildings
- The basis of calculation of the new tax will have more scales and rates.
During the meeting, which lasted about four hours, the leadership of the Ministry of Finance noted that the new tax should offer income 3.1 billion annually and pointed out that the proposals of other parties could not provide the amount agreed with Troika.
From the new tax, the competent Ministry expects to accumulate 1.7 billion from buildings and plots located within the city plan, 500 million from enterprises and 800 million from outside city plan areas.
Within the city plan buildings and plots
The tax on houses, shops, offices and plots will be calculated on a scale consisting of 33 different rates. Each rate will correspond to an amount of tax per square meter. The scale starts at a rate of 1.8 €/sq.m. Beyond that, the rate will change considering specific criteria such as zone price applied in the property region, the age, the floor, the number of facades, if the road on which the property is located is commercial, etc.
In this way, the rate will exceed 20 €/sqm for very “expensive” property. The final rate will then multiplied with the surface and the final tax will arise. Unemployed, large families, long-term unemployed, disabled people and people who are below the poverty line exempt from the regulation.
Outside city plan plots
For land plots located outside city plan areas, a separate scale will be applied. This tax starts from 1 €/acre for annual crops areas which belong to farmers and depending on particular characteristics of any other plot, the tax of 1€/acre will be increased.
The final tax rate will take into account various criteria such as geographic location of the plot (whether it is located in a mountainous, hilly or flat area, whether located near the sea, etc.), if the area can be cultivated or not, type of crops (annuals, perennial, etc.), whether it is leased or owned, etc. Essentially, there is no discharge of main occupation farmers, according to the new tax property system.
The representatives of the three parties will receive today the detailed text of the Ministry of Finance proposal. After studying it, they will present their own proposals at the next meeting. The next meeting target will be to accomplish the draft of the new property tax which will be presented then to Troika.
TaxExperts will keep you posted regarding any future developments. For more information please visit our Real Estate portal www.goldgreece.com