ECONOMY

Rate drop for property tax paid via electricity bills is possible

The government is examining ways of reducing the rates for the special property tax that will be paid again this year via electricity bills, provided that all other property taxes that currently apply are actually paid.

Finance Ministry officials say that if it observes no problems in the collection of the various other taxes property owners have to pay, then the rates of the special levy could be reduced to ease the burden on taxpayers.

The same officials say that there are also plans for the reduction of so-called “objective” property values (used for tax purposes), if the ministry committee assigned to the task submits its report in time. If that happens, the tax burden from the special levy will be significantly reduced, given that the zone rate of each property is the basis for the calculation of the levy due.

They add that the sum of taxes that must be collected this year from properties amounts to 3 billion euros, as provided by the 2013 budget, which has underestimated the yield of the numerous other taxes on property. As the officials explain, if property owners do pay their dues this year (i.e. the property tax for 2010, 2011, 2012 and 2013 and the special levy for 2012), then the money that enters public coffers will be more than forecast by the budget, which would allow for the easing of the special levy rates for 2013 without any new measures required.

Greece’s international creditors have asked for the special levy to be paid for a third time in 2013, mostly as a result of the government’s inability to present a reliable system for the application and collection of the new single property tax.

Speaking on the subject, Finance Minister Yannis Stournaras said recently that the special property levy will have to be collected via the electricity bills this year too, as it is “the most realistic solution.”

For that to happen, though, the government will need to overcome the hurdle raised by the Council of State, which has ruled that the levy is constitutional so long as it is “extraordinary” and not a permanent measure. That means that its application should be for no more than two years, having already applied for 2011 and 2012.