A measure that was first considered some 30 years ago has been revived, with little if any preparation and planning, without concern for the problems already faced by taxpayers and businesses, and with little thought for who should or should not be exempted. The government?s proposal to impose an emergency property tax on all homeowners in Greece has already caused an outcry and Parliament is due to vote on the bill tomorrow.
Below are some frequently asked questions regarding the new measure and some details regarding the content of the draft law.
1. Who is subject to the emergency property tax?
The tax is aimed at property owners, while in the case of joint ownership, the tax is split equally among them. However, the person living in the property is obligated to pay the tax, which will be imposed through the electricity bill. If the person living in the property is a renter, he or she can then hold back the amount paid for the property tax from the rent.
2. What kind of property is subject to the tax?
The tax will be levied on all built properties that receive electricity, whether residential or commercial. Communal areas of apartment buildings are exempt.
3. How is the tax calculated?
The tax is calculated according to the price zone (calculated according to the officially set property values) in which the property lies, the surface area of the property, the coefficient in euros per square meter and according to the age of the property. Properties older than 26 years have no additional burden, while new properties can pay up to 25 percent more. For example, someone who owns a newly constructed home of 80 square meters in the Athenian suburb of Illioupoli, where the maximum price per square meter in that zone is 1,900 euros, will pay 600 euros in property tax (80 sq.m. x 6 euros x 1.25).
4. In how many installments will the property tax be paid?
The tax for 2011 will be paid together with the electricity bill in two equal installments from October 2011 to January 2012, while the tax for 2012 will be paid in four equal installments from May until December 2012. Property owners can apply to PPC or other electricity providers to increase the number of installments.
5. What happens if someone refuses to pay the tax?
Public Power Corporation (PPC) or other electricity providers will disconnect the supply until the bill is paid. If the owner does not apply for a resumption of power supply, the provider will strike the owner off its list of customers and inform the state, which will then take measures to collect the tax. Changing electricity provider, meanwhile, will not be possible.
6. Will all property owners be obliged to pay the tax?
No. People who have been jobless for more than a year and do not receive unemployment benefits, as well as those on the list of people looking for work as seamen, will be exempt. Unemployed people who have an annual income of 12,000 euros and over will have to pay. Families with three children and more, as well as disabled people will be taxed at a rate of 0.50 euros per square meters if they have an annual family income of under 30,000 euros. Also, the exemption for the unemployed, large families and the disabled will not be in force if the property in question is worth more than 150,000 euros (increased by 10,000 euros for every dependent child) or if the property is in a zone priced at above 3,000 euros per sq.m.
7. There are areas where there are no official value for property has been set. How will properties in these areas be taxed?
The area of the property will be multiplied by three, i.e. a 100 square meter property will be taxed 300 euros.
8. For how many years will homeowners be obliged to pay this property tax?
The draft bill foresees the property tax as a permanent measure to be imposed on a annual basis. In 2011 and 2012, the tax will be levied via the electricity bill, though it is being proposed that from 2013 onward it replace the present-day main property tax.
9. Will commercial and industrial properties be subject to the tax?
According to the draft bill, only properties used exclusively for agriculture, livestock farming, industrial production and manufacturing will be exempted.
The bill does not take into account that many hotels are closed in the winter season.