PROPERTY TAXATION

The new ENFIA landscape

the-new-enfia-landscape

Government tax experts are in the process of preparing the new Single Property Tax (ENFIA) for 2022, complete with new brackets and calculation rates, greater discounts, more tranches and changes to the age coefficients.

The new ENFIA must also include the additional reduction of the tax, which may exceed 8% on average. For some property owners the reduction could reach up to 15%-20%, but for the majority it is expected to be marginal or zero.

The interventions on the ENFIA rates and brackets are in the hands of a special 18-member task force at the Finance Ministry and the experts have already started a simulation exercise that is expected to determine the impact of the new table rates of properties, known as “objective values,” on taxpayers’ assets.

In end-October the government is going to have in its hands the conclusions of the experts’ committee on the ENFIA calculation rates, and in November the new ENFIA will be formally unveiled. The experts’ proposals will take the form of a bill that is set to be passed into law by the end of the year.

The new ENFIA is being designed from scratch, but without any changes on the total tax on real estate, as the ministry has committed to making fiscally neutral modifications. This means that next year the ENFIA takings will still come to 2.6 billion euros.

In practical terms, the changes introduced will absorb the sizable hikes stemming from the major increases of objective values. Besides the interventions planned for brackets and rates, another task force is working on the age coefficient, which will increase the tax on properties that are more recent. Notably the age coefficient is different to that used for the calculation of a property’s value in transactions, but that is going to be ironed out next year.

Serious problems have also been identified in the commerciality coefficient of the objective values, as it has remained unchanged over the last 40 years. This means the values do not take into account the development an area may have undergone, such as the Psyrri district in downtown Athens. This is also among the second committee’s tasks.