ECONOMY

ENFIA tax to be slashed by 13 percent

In a nod to middle class, PM announces permanent reduction of unpopular property levy

ENFIA tax to be slashed by 13 percent

With his government still reeling from the fallout from last week’s snowstorm and a toxic debate in Parliament, Prime Minister Kyriakos Mitsotakis sought on Wednesday to cap a difficult run of events on a more positive note, announcing the permanent reduction of the much derided ENFIA property tax by 13%.

In a special address on camera Wednesday, Mitsotakis said that with this announcement the government “exceeds its commitment for total relief of 30% of real estate taxation.” He said the decision is “fair for society and good for the economy.”

“Every step forward must be taken in a way that will not lead to two steps back,” he added. 

The ENFIA tax was first introduced in 2011 and was seen as a catalyst for the rupture between the then ruling PASOK government and the middle class. Its unpopularity was also deployed to devastating effect by leftist SYRIZA on its road to power in 2015. 

Mitsotakis’ move comes at a crucial phase of ruling conservative New Democracy’s term in office, which also coincides with a slight slump in polls. 

Reducing property tax is seen as pivotal to the government’s narrative for wooing the full gamut of the country’s middle class, which has always viewed the ENFIA as a symbol of the assault against it. 

“The average income is under siege from the international energy crisis and the price hikes it is causing, as everywhere in Europe,” he said in his statement, linking the move he announced with other initiatives taken by his government. “That’s why the state continues to cover part of the increase in electricity bills… and also insists on the steady de-escalation of taxes and contributions to stimulate the disposable income of all households,” he said. 

Eight out of 10 citizens are set to benefit from the reduction of the ENFIA. At its core, the plan foresees a significant decline of the basic tax on buildings, while for plots the reduction reaches 50%, Mitsotakis said.

“Thus, the greatest benefit arises for properties in middle and lower value zones. In other words, this is a clear choice in favor of the middle class and the weakest,” he concluded.

The government says the new initiative is part of a wider framework of changes concomitant with a “consistent economic policy” that includes lower tax rates and levies impacting different groups.