PROPERTY TAXATION

ENFIA boost for corporations

Finance Ministry has now decided to abolish the supplementary property tax on companies

ENFIA boost for corporations

The government’s plan for the new Single Property Tax (ENFIA) provides for the abolition of the supplementary tax not only for individual owners but also for corporations, alongside the reduction of the main tax for hundreds of thousands of taxpayers and measured hikes for owners of assets in areas newly introduced into the system of taxable realty rates, known as objective values.

As already reported, the plan for the new ENFIA also has new brackets added to prevent any major tax hikes in areas where the new objective values are much higher than those that applied till end-2021. The rates will also be adjusted downward to protect owners from disproportionate tax due increases.

Crucially, a top Finance Ministry official argues the overall reduction of the new ENFIA dues will be much higher than the 60 million euros the 2022 budget provides for, adding that the total cut will constitute the surprise of this year’s property tax, to be formally announced in the next few days.

On Saturday the Independent Authority for Public Revenue started the simulation exercise that will establish whether the parameters of the new ENFIA will produce the desired outcome; if all goes well, the ministry will send the final draft to the creditors this week.

The full abolition of the supplementary property tax for individuals as well as corporations practically changes the structure of the tax, and from now on each property will be taxed individually, regardless of the sum of assets owned by a single taxpayer. 

To date the supplementary tax was imposed on a sum of assets owned that exceeded €250,000 in objective value terms, leading to huge hikes. Therefore, for a store in the city center of Patra, the supplementary tax would be seven times the main ENFIA. The supplementary tax abolition will end such distortions.

Ending this tax on corporations, although the government was originally reluctant, will mean the €278 million it brought in will be covered through rate adjustments.