BUSINESS

CoS verdict upsets ENFIA plan

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Property

The Single Property Tax (ENFIA) is to undergo significant changes from 2017 after the Council of State ruled that the method used to calculate the tax for four areas in the country was illegal on the grounds that it did not take into account their special features in the assessment of their objective values (property rates used for tax purposes).

Finance Ministry officials say that the decision forces the government to proceed to a new adjustment of the objective values in the areas of Filothei, Psychico, Neos Voutzas and Delphi by the end of the year, and possibly in more locations should any similar verdicts emerge from the CoS. Hundreds of appeals from around Greece are still pending at the country’s highest administrative court.

Ministry officials add that following the publication of the CoS decision, authorities will start reviewing the objective values in the above areas alone, while the new rates to be determined will only concern property transactions to be made in 2017, so that the 2017 ENFIA will also be calculated based on the new values.

One Finance Ministry source notes in particular that the ministry’s planning includes the creation of a system for the automatic adjustment of objective values that will start operating in the second half of 2017. However, in order to take into account the consequences of any new court decisions, the new objective values to be introduced based on the market rates will have a retroactive effect, starting from January 1, 2017. That is because the taxes imposed on properties are based on the objective values applying on January 1 each year.

Although the plan for an adjustment system following market prices is a step in the right direction, property market professionals note the difficulty in determining the actual going rates across the country, as the crisis has minimized transactions and the few that do take place are not enough to deduce safe conclusions.

Notary firms stress that any transactions that do occur nowadays are due to the need for cash, which means properties are often sold for far less than they are worth.

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