Desperate landlords seeking way out

Investment in property assets such as stores and houses has proven to be among the worst possible By Nikos Roussanoglou

Tens of thousands of private property owners are hostage to the combination of an unprecedented wave of taxes and the decline of market prices to levels below those used for tax purposes, known as objective values.

Real estate market professionals argue that the people who opted for investing in property in previous decades in order to utilize it and not resell made the worst possible choice, as besides the tax burden, which has grown from the extraordinary levy paid through the electricity bills, many properties are currently without a tenant.

It is estimated that some 30 percent of commercial properties are empty today – with the rate set to grow – and that rental rates have declined by 40 to 50 percent since early 2009. Meanwhile, most rented properties show significant delays in the payment of rent.

A recent analysis by Alpha Bank showed that an investor with a property worth 2 million euros will this year have to pay taxes of about 47,000 euros, not including the income tax from rent revenues.

“There are hundreds of cases of owners who have tried in the last year to sell one or two of their stores or offices even below their objective value, but without being able to find a buyer,” notes a property management company official. The only solution landlords appear to have is to ask tax authorities to accelerate the process of confirmation of their debt so that their properties are confiscated and put to auction, after which the state can keep the amount for taxes due and the owner can pocket the difference.