ECONOMY

Property tax adds to renter-owner relationship woes

The emergency property tax levied via electricity bills has aggravated the existing friction in the relationship between Greek renters and owners, especially in the commercial property market. The reason is that under Greek law, the renter is required to pay the emergency tax when the electricity bill comes in and then deduct the amount from the rent.

However, as many households are finding it increasingly hard to make ends meet, thousands of occupants across Greece have refused or are unable to pay the additional amount for the emergency property tax, creating problems for the owners.

Many landlords have said that they have no way of knowing whether the amount of money the renter claims to have paid for the property tax — in the case that he or she has done so — is the correct one. Many do not know exactly how much tax is being charged on their property as they receive no prior notice from tax authorities and the electricity bill on which the amount to be paid is stated is sent to the property in question rather than the owner.

According to the Hellenic Property Federation, in many instances renters said that they could or would not pay the tax, with many adding that they were planning to vacate the property within the next few months. This was the case mostly for commercial property, and especially spaces used as stores.

If a renter refuses to pay the property tax or does not come to some other arrangement with the owner, the Public Power Corporation is obliged by law to cut off electricity supply to that property. For renters planning to vacate, this is not an issue, but for the owner, it will mean having to pay all pending electricity bills, in addition to the property tax.

According to market sources, a number of owners have seen their tenants vacate their properties, leaving behind several months of unpaid utility bills. Hundreds of these owners have said that they will pay the property tax, but not the previous tenant?s electricity bills. PPC, however, is unable to break down the electricity bill containing the property tax, meaning that landlords cannot pay the tax without settling the bill, and tenants, in turn, cannot pay their electricity bill without paying the tax.

The last resort for homeowners is to allow the electricity supply to be cut off from the property and wait for the emergency property tax to be handled by their tax authority, which is in charge of collection if PPC has not received it. Of course, this is only possible if the property remains unleased.

A source of even more grief for owners is that fact that hundreds of tax bills have been miscalculated upward, based on erroneous information regarding the size or age of the property.