The adjustment of property rates used for tax purposes (known as “objective values”) has been put off till March, as the Finance Ministry has not managed to bring them in line with actual market prices, nor will it implement the plan for the creation of 75 local committees to determine the rates.
It appears that the country’s creditors have accepted Athens’s request to postpone the changes, but they are not convinced by the plan the ministry has presented that foresees the establishment of 75 committees around the country to calculate the 10,000 new zone prices.
The new deadline will be included in the updated memorandum of understanding, so the ministry will need to submit the new objective values (which will apply retroactively from January 1, 2018) by the end of March. This means either a rate hike for the Single Property Tax (ENFIA) or its replacement with the Large Property Tax (FMAP) to shift the load onto owners of medium-size and large properties to make the annual revenue target of 2.65 billion euros.
Sources say the government will not set up the 75 local committees it had announced, but will instead try to utilize data from property transactions from every region in the country. The problem is that the number of transactions in most regions is negligible.
The 10,000 new zone prices will come from an online system using an algorithm. A database is already collecting information from notaries, banks and rental contracts.
As rental contracts are declared to the tax authorities electronically, there already is a database in place, while sales transactions are now declared via a special application the Independent Authority for Public Revenue has created, and the Bank of Greece contributes data from commercial banks and market research conducted on a regular basis.
The system is supervised by a task force and supported by Professor William McCluskey, whom the creditors have sent to Greece to provide technical expertise.