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Taxes of big properties increase five times

02 November 2009 / 17:11:37  GRReporter
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The Greek government is rethinking some changes in real estate taxation, which will come into effect in the beginning of 2010. Some of changes in the new law will include cancelling the uniform real estate tax and restoring inheritance taxes. Those changes will affect over 350 thousand property owners. The main goal of the government is to increase tax incomes in the state treasury by taxing firms and individuals, who own many properties and who have offshore companies. One of the first change proposals is to increase the current tax of big properties five times and to avoid additional tax burden of small households and firms.

Based on a held public opinion survey 7 out of every 10 Greeks believe that the real estate Uniform tax should be cancelled and modernizing the low for taxing big property owners should be supported. Regarding fixing the problem with illegal construction 58.4% believe that immediate measures should be introduced in the current law, 24.2% want this law to be cancelled and 6.2% believe the law should remain as it is now.

Important factor in the real estate law change is finalizing the real estate inventory in Greece. Until now the list with building, which need to be taxed, is not ready. Due to this reason the Ministry of Finances cannot give a final estimate for the amount of expected income after introducing the planned changes. Representatives of the ministry claim that the new changes in the law for inherited properties will be accompanied by increasing the nontaxable basis, so that households and firms with average and small annual income, will not be affected. A problem is expected if the government decides to update the tax value of real estate. In this case the promise for tax relief of small households and firms will be invalid and will burden ordinary citizens.

The Uniform real estate tax, which right now is 1/1000 of the tax evaluation of the property (with the exception of agricultural land) will be cancelled and on its place a new tax scale will be introduced, which will have an uprising form – properties with small and average value will remain unaffected by the changes and properties with high value wil take over the big tax burden. It is expected that the nontaxable base will increase and taxes for “expensive” properties will reach 5 to 6 thousands of their tax value. The current law predicts a coefficient with a minimum of 0.3% and a maximum of 0.9%.

In regards to the nontaxable value of real estate, the current law plans changed, respectively of €100 thousand to €250 thousand for singles and from €200 thousand to €500 thousand for married. This way the Ministry of Finances is planning to release the main home from taxation and in some cases the real estate outside the city, which has a low value. In a similar way the property transfer will be done between related individuals from the first group. Inheriting a first property by a parent will not be taxed if the property is up to 200 square meters and the minimum is increased with 25% if the family of the person inheriting has a third child and so on. 

Tags: Real estate in Greece Ministry of Finances in Greece Taxation Tax Base Property
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