PROPERTY TAXATION

Facing the ENFIA conundrum

Finance Ministry committee exploring various scenarios to keep property tax fair and even

facing-the-enfia-conundrum

The overhaul of the Single Property Tax (ENFIA) is causing major headaches at the Finance Ministry, as the transformation of the supplementary property tax into a levy on the sum of one property has created problems for the competent committee that has to find a solution without adding to the burden of most property owners.

The new, increased taxable rates for properties – known as objective values – combined with the incorporation of the supplementary tax have led to distortions that are endangering the initial concept of the ENFIA overhaul, which is to secure a uniform tax status for all areas and social justice.

In practice, the restructuring of ENFIA with a fiscally neutral result and while safeguarding small and medium-sized properties from extra tax are the two objectives the committee seeks to attain, having tried various solutions since last fall without success.

These are the why the announcement of the new ENFIA was cancelled last month, as had been scheduled. It has now been put off until February, when the committee is expected to be ready.

This means that in the upcoming 13th post-bailout assessment of the Greek economy by the country’s creditors, the government will not be in a position to inform the mission chiefs of developments on the new property taxation, an obligation that the Finance Ministry keeps postponing.

Nevertheless, a top ministry official argues that despite the problems the vast majority of property owners will not only avoid any tax hikes but will actually pay somewhat less as of this year.

Sources tell Kathimerini that the scenario providing for the ENFIA overhaul through the introduction of a system whereby the tax rate would grow according to each property’s value has now been abandoned because it would create distortions mainly for medium- and high-value properties. Instead, the competent officials are opting for radical changes to tax brackets and rates to cover the objective value hikes, mainly in the country’s biggest cities.