ECONOMY

Greeks pay most property levies in EU

Real estate owners and buyers in Greece have to pay the highest property tax contributions in Europe, while one in three Greeks say that they will not be able to pay the new Single Property Tax to be imposed from January, amid reports of an amended bill that will raise the tax-free threshold against strong opposition by government MPs.

According to a report submitted on Tuesday to the European Parliament by the International Union of Property Owners (UIPI), Greece is the only country in Europe in recent years to impose an annual property tax (FAP) equal to up to 2 percent of the property value, the special tax paid via electricity bills and the annual council tax on properties (TAP) ranging between 0.025 and 0.035 percent, not to mention the various other charges determined freely by local authorities.

On top of that, there is a tax on the capital gains reaped in case of a sale, equal to 20 percent, while Greece has the second-highest transfer tax in the European Union, amounting to 10 percent, against an EU average of 4 percent, according to the report.

While in most European countries taxation focuses either on transactions or on ownership, Greece taxes both, and heavily at that.

According to an Alpha Bank analysis, the new Single Property Tax will amount to 1.5 percent of the country’s gross domestic product, meaning Greece will have the eighth-highest property taxation among all member states of the Organization for Economic Cooperation and Development (OECD).

Meanwhile a survey by the Athens Chamber of Commerce and Industry, conducted on October 20-23, found that one in every three citizens will not be able to pay the new Single Property Tax as proposed by the government and put to public consultation. The rate of people who responded they would definitely fulfill their property tax obligations next year amounts to no more than 53 percent.

This comes as the survey, conducted every month, found that the level of pessimism among Greeks reached the highest point this year – 70 percent, from 68 percent in September. Optimists accounted for just 15 percent, from 18 percent in September.