BUSINESS

Objective values are likely to grow by 20 percent on average

THANOS TSIROS

TAGS: Taxation, Property

Property surveyors commissioned by the Finance Ministry to recommend new zone rates aimed at matching market prices are expected to submit proposals for a rise in taxable rates – known as objective values – that would be higher by 30-35 percent in Attica and the country's most popular tourism destinations.

Their recommendations will not be binding for the ministry, which will likely contain the hikes in zone rates, particularly in more densely populated areas. In any case, however, it appears that the new rates which will be used for this year’s Single Property Tax (ENFIA), and probably from January 2021 for property transactions as well, will be 20 percent higher on average. Just a few areas are set to see reductions, especially in the northern suburbs of Athens, while major hikes are anticipated in the areas currently outside the system of objective value assessment.

The average growth of objective values by 20 percent – a forecast that also converges with estimates by the country’s creditors who expect the taxable value of Greeks’ property to rise by about 100 billion euros – will split owners into two categories.

The first category will comprise those who will pay less ENFIA: They will be property owners in areas where zone rates will either go down, stay unchanged or rise at such a rate that it will not affect the ENFIA calculation rate. This category will see an average 10 percent reduction in their ENFIA tax from 2019 that the government is planning.

The second category concerns owners who will pay more ENFIA in 2020 than last year: The general reduction of ENFIA will be offset for them by the increase to their zone rates by over 30 percent.

The argument of surveyors in favor of considerable hikes to zone rates is based on the following factors: In 2018, when the last adjustment of objective values took place, they were not brought on a par with the going rates, as only part of the market price increase was incorporated. Furthermore, property rates have increased further since 2018, as Bank of Greece data also confirm. Finally, zone rates are supposed to reflect the cost of construction for the first floor of a block of flats, including the value of the plot. Therefore, in theory, there should be no rates below 700-800 eros per square meter, surveyors argue, which is set to lead to major hikes as in some areas zone rates currently start at 200 euros/sq.m.

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