Real estate tax target

Government seeks to tie up lingering property disputes to fill state coffers

The government proposes to settle up to a million outstanding cases of unpaid property tax in order to provide a much-needed shot in the arm to the public coffers, sources told Kathimerini yesterday.

Economy and Finance Ministry officials, worried by the state of the country’s finances in view of the government’s spending commitments as laid out in the 2005 budget, are casting around for ways of increasing public revenues.

To achieve this, one method is to reopen cases dating back up to 10 years which involve the transfer, inheritance and gifting of properties where the appropriate tax has not been paid.

Sources say the ministry has already contacted tax collection offices throughout Greece, asking them to dig through their files and be prepared to send out notices to any offenders. It is thought that an amendment to the relevant legislation will be put before Parliament by the end of the year. It is hoped this will help conclude some 1 million cases that are believed to be outstanding.

In most cases, the problem arose because the people inheriting or receiving real estate as a gift have refused to accept the valuations given by tax authorities. So far, tax inspectors have not had the power or resources to conclude the cases. An effort was made two years ago through a system which struck a compromise between the valuation put forward by the tax office and that proposed by property owners. Although the scheme erred on the side of the owners, it proved unfruitful. Most property owners just sat it out until the ruling expired, in the hope of getting a better deal in the future.

Ministry officials believe changes to legislation will give the new scheme a better chance of success. Any landlords who do not conclude their outstanding tax obligations will be faced with the threat of their land or home being summarily valued according to market rates rather than being assigned an imputed value, which is usually lower.