BUSINESS

Property rate system reform to be postponed

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Property

The change in the way property values are calculated for tax purposes – known as “objective values” – is to be postponed until the second half of next year.

The government had promised that objective values would be replaced by a new system that would be based on the market value of properties as of January 2017, when the Single Property Tax (ENFIA) was to be abolished.

However, the government’s inability to create an automatic system for the adjustment of the values, combined with the difficulty in creating a new tax that would fetch some 3.5 billion euros per year into state coffers, has forced the government to ask its creditors for more time before it can fulfill that commitment stemming from the bailout agreement.

The plan is for the new system to track the course of market rates through the prices on contracts and allow for the automatic adjustment of values used for tax purposes. In 2015, Alternate Finance Minister Tryfon Alexiadis had announced that the new property tax to replace ENFIA would be based on market prices and not objective values, adding that the government wanted to lighten the burden of small property owners, transferring most of it to larger owners.
 

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