The government has planned changes to the Single Property Tax (ENFIA) with an eye to the upcoming election, as the 30 percent reduction announced for 2019 will only concern owners of real estate assets valued at up to 60,000 euros.
The majority of property owners however will either see a smaller reduction to their ENFIA dues or no change at all, as owners of real estate assets adding up to at least 200,000 euros – i.e. medium-sized and large properties – will not enjoy any cuts at all.
According to the plan that was presented to the representatives of the country’s creditors this week, the reductions to ENFIA will be as follows: Owners of assets valued at up to 60,000 euros will see a 30 percent cut; properties between 60,001 and 100,000 euros will see dues drop 21.08 percent; assets between 100,001 and 150,000 euros will have their ENFIA cut 9.54 percent; and those from 150,001 to 200,000 euros will only experience a marginal 2.72 percent decrease.
Further reductions are planned for 2020, but no agreement has been reached with the creditors yet on the amount of the primary budget surplus overrun and the reduction of ENFIA in 2019.
The information coming from the government raises many questions, such as what will happen to the supplementary tax imposed on real estate valued at over 250,000 euros.
It remains unknown whether the supplementary tax will be maintained at all or whether the rates will be increased, whether the taxable rates of properties (known as “objective values”) will be revised next year and in 2020 (as the recent agreement with the creditors provides for), whether farmland will be included in the supplementary tax or whether a Large Property Tax (FMAP) will apply.
These parameters are particularly significant, as they will determine whether the reductions to the main ENFIA rates that the government is promising will trickle down to the taxpayer or will be curtailed or absorbed by the adjustment of the objective values.