ECONOMY

Athens hopes to reduce rate of new property tax for landowners

The government wants to reduce the rates of the new Single Property Tax, which is to apply from 2014, aiming to lighten the load on owners of plots within town-planning zones.

The issue of the new tax was discussed on Wednesday at a meeting between Prime Minister Antonis Samaras and Deputy Prime Minister Evangelos Venizelos, with the two men agreeing that property owners should not pay more tax. That would that the total tax amount property owners would have to pay would be less than the 4.15 billion euros provided for in the original pan drawn up on the recommendation of the country’s creditors, collectively known as the troika.

Samaras and Venizelos also agreed that any reductions (should there be an agreement between the troika and the Finance Ministry) will affect landowners, as the original plan provides for a disproportionate burden on them.

“Everything will depend on collection efficiency and the extent to which our creditors realize that taxpayers cannot take any more,” a senior Finance Ministry official said. He added that the troika’s technical team was informed at a recent meeting at the ministry about the four property taxes owners will have to pay by the end of the year. At the same meeting, ministry officials tried to convince the creditors that an increase in property taxation would have the opposite of the desired result.

The problem is that the creditors disagree with the ministry on collection efficiency, saying that in order for the desired amount of 2.9 billion euros to be collected, a target for taxes of 4.15 billion euros should be set. The government’s aim is to persuade the troika that rather than the 67 percent collection rate the creditors expect according to their reports, collection efficiency will in fact reach 81.5 percent, which would mean property taxes totaling 3.5 billion euros should be imposed.

All will depend on the negotiations that the heads of the troika will hold with the ministry concerning the final rates for the new tax from January. In their report, the creditors insist the current status should be retained, but the government is determined not to accept it. This forms yet another front on which Athens and its lenders are set to clash.