ECONOMY

Higher tax figures a concern for property market

Property market officials are concerned about the impact this week?s decision from the Finance Ministry will have on the sector which increased figures used by the tax office to value real estate property in the area of Psychico, northern Athens, by up to 60 percent.

The government?s decision is considered as sign of things to come when property tax estimates are increased in June across the country in a move which could bump them up more than actual market values.

This is the case in Psychico after the ministry?s decision.

The tax office?s value for real estate in zone A of Psychico prices each square metre at 10,000 euros. However, industry data shows there have been no deals completed in the area where the actual price paid was above 9,500 euros per square meter.

Comments from Deputy Finance Minister Dimitris Kouselas in Parliament on Thursday that the government will up tax figures on properties only after taking into account market conditions means nothing.

It is also noteworthy that Kouselas has called on construction companies to reduce selling prices. ?Construction companies should help the market and not rely on the fat that helps keep prices very high,? he said.

Concerns about the ministry?s decision are very large given negative growth rates seen in the real estate sector in the last few years, sending prices spiralling downwards.

If recent prices drops are taken into account, which according to some experts is in the vicinity of twenty percent, it is obvious that hikes in tax values will put a further freeze on the industry.

?This is an attack from the tax office against property owners which annihilates real estate ownership,? Stratos Paradias, president of Hellenic Property Federation (POMIDA) POMIDA, told Kathimerini.