BUSINESS

Landlords are hit with tax hikes

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Property

Property owners are bracing for an increased tax burden as of this year, as the rates for incomes from rentals are to rise in a measure that will apply retroactively from January.

Even landlords with small properties who make no more than 1,000-2,000 euros annually will see their tax demands for 2016 grow.

The bill submitted in Parliament provides not only for a rate hike but also for the addition of another bracket, for higher incomes from renting. The only positive element in the bill is that the autonomy of rental incomes will be maintained, as they will be taxed differently to other forms of incomes, which are taxed at a higher rate.

The new rates are 15 percent for rental incomes up to 12,000 euros per annum (from the current 11 percent), and 35 percent for annual takings of between 12,001 and 35,000 euros (against 33 percent today). A new bracket is being created for annual incomes from rentals that exceed 35,000 euros, amounting to 45 percent.

Combined with the Single Property Tax (ENFIA), which will be affected by the new so-called “objective values” (used for tax purposes), all landlords will now have to pay additional taxes.

In September the Finance Ministry is expected to present its new plan for the taxation of properties, whereby owners of properties with an objective value of more than 300,000 euros will carry more of the tax burden. In practice, this means that the government intends to increase the rates of the supplementary property tax that is imposed on owners of properties with a combined value of more than 300,000 euros.

With that measure, the Finance Ministry is expecting to collect an additional 200 million euros, to take the sum from property taxation to about 3.5 billion euros.

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