BUSINESS

Payment of first installment of new property tax rolled back by a month

Bowing to the uproar caused by widespread and blatantly unrealistic errors in the calculation of the new single property ownership tax (ENFIA), announced on Monday, the government on Thursday declared that the first payment would be postponed by one month.

“The payment of the first ENFIA installment will be rolled back by a month so that errors are corrected and the necessary adjustments are made without undue tribulation for citizens,” Deputy Prime Minister Evangelos Venizelos said.

The Finance Ministry will table an amendment after the end of the summer recess on August 25, bypassing the exorbitant tax rates calculated in hundreds of districts across the country. The amendment will provide for the application of so-called objective property prices used for taxation purposes last year. And these will apply only if this year’s calculation is higher. For instance, the taxable value of a 706-square meter land plot on the island of Cephalonia will remain at last year’s 29,704 euros, instead of the multiple of 72,417 euros calculated this year. By contrast, the value of a 300 sq.m. plot in eastern Attica will stay at 35,000 euros arrived at this year, instead of the 115,000 euros calculated last year.

According to sources, the Finance Ministry’s responsible departments have yet to find the right formula for the recalculation of ENFIA. The most blatant distortions occurred mainly in rural districts of western Greece.

According to a source, a ministry official warned of the mistakes some 10 days before the new calculations were uploaded on the Internet, but the warning was apparently ignored.

The upheaval is seen as bound to have an adverse effect on budget revenues, as the government had originally budgeted for the collection of 441 million euros every month between July and December this year. The further rollback of the first installment to the end of September creates a shortfall of more than 880 million. This would raise further obstacles in the planned negotiations with the troika in September, when the agenda includes tax cuts for 2015.

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