BUSINESS

Large Property Tax to be charged per family

PROKOPIS HATZINIKOLAOU, NIKOS ROUSSANOGLOU

Farmland will likely be included in FMAP taxable assets as of 2019.

TAGS: Property, Taxation

The government is setting a trap for owners of real estate with its new plan regarding property taxation: Sources say that through the replacement of the Single Property Tax (ENFIA) with the Large Property Tax (FMAP), the government is aiming to catch owners who made parental concessions or transferred the bare ownership or the usufruct to relatives so as to reduce the Supplementary Property Tax they have to pay or avoid it altogether.

The supplementary tax is charged in cases where total property has an objective value (used for tax purposes) of more than 200,000 euros, and the trap mainly concerns owners who split their property into pieces valued at less than that amount. The plan that has already been submitted to the country’s creditors provides for the new tax to be calculated on a family basis (including parents and dependent children).

There will be a tax-exemption threshold for family assets that will likely rise depending on the number of household members. This was also the case with the Property Tax (FAP) that applied up to 2011.

The new tax will also include all farmland and so will increase the burden on farmers. Farmland is supposed to remain exempt from ENFIA in 2018 too and will likely incur FMAP from 2019 as the agencies of the Finance Ministry have not yet managed to make an assessment of the value of agricultural land.

The government’s general idea is to shift the tax burden to owners of medium and large properties and ease it on small ownership. However, in order to abolish ENFIA, the government first has to find a way to harmonize objective values with market prices.

If the new tax has a threshold of 50,000 euros per household, it will lead to the exemption of 2.8 million property owners from FMAP. That would mean owners with assets valued at above that level (most of them medium-income Greeks) would see their burden grow disproportionately, possibly more than twice the amount they pay through ENFIA.

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