New property tax spares many owners

The three coalition partners appear to have arrived at a consensus on the new single tax on property, which will likely have a tax-free threshold of 50,000 euros per owner and rates ranging between 0.1 percent and 2 percent.

The tax, which will apply from the second half of this year, will also have a rate of more than 2 percent only for properties whose value exceeds 10 million euros, according to the outcome of the meeting held on Friday under Deputy Minister Giorgos Mavraganis.

The precise amount of the tax-free threshold and the number of brackets – likely to range between six and eight – will be decided next week. This follows strong pressure by New Democracy deputies on Finance Minister Yannis Stournaras over the past couple of days, with the argument that any further burden on property owners’ shoulders would create more problems than it would solve.

In the case that a threshold of 50,000 euros per owner (not per property) is introduced, some 1 million taxpayers will find themselves exempt from the tax, while most property owners, especially those whose assets are of low objective value, will see their tax dues decline significantly. For a married couple, the threshold would rise to a total of 100,000 euros.

Currently the extraordinary property levy is tagged on to property owners’ electricity bills. It has no tax-free threshold and its rates range from 3 to 20 euros per square meter.

This will be the first time that farms are taxed.

Also in the second half of the year the government intends to adjust the objective values of properties – i.e. the property values used for tax purposes – so that they approach or even match commercial prices, as the government has agreed with its creditors. Market prices have declined considerably over the last few years in various areas of Greece, resulting in objective values being far higher and burdening owners disproportionately.

Objective values affect 20 taxes and levies, including council tax and the special levy paid through the electricity bill, among others, so a reduction would lighten the load for many taxpayers.

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