ECONOMY

Greek property agents warn new tax will hit prices

Greece’s real estate agent association Omase warned against a possible collapse of the sector in big cities because of new property taxes in a controversial law submitted to parliament.

“In view of recession and taxes, this law leads to the collapse of the market instead of reducing the excessive taxation which has already stalled transactions,” said head of Omase Ioannis Revithis during a press conference.

Real estate prices have already dropped between 30 and 50 percent in recent years.

The law, which should be approved by parliament by the end of the week, includes a tax for all properties and an additional tax for properties worth more than 300,000 euros ($414,000).

For the first time, agricultural plots will also be taxed.

Until 2011, only owners of large properties were taxed.

But the crisis-hit country, under pressure from its international creditors to increase state income, needed to introduce a more comprehensive property tax.

“Over-taxation causes property devaluation, which works to the advantage of foreign investors who want to buy at very low prices,” said Omase member Michalis Georgiou.

“In 2014, which will be a crucial year for real estate, prices will further drop by up to 20 percent,” he added.

Investing in property is a tradition in Greece, as it is considered a fall-back against shortages in state welfare.

Greece has one of the highest property owner rates in Europe, with more than 70 percent.

The association further calls for tax exemptions for residential properties and workplaces that are currently without a tenant because of the crisis.

Omase also asks for an extension on a moratorium on home foreclosures, which protects the principal residence of debtors from outright seizure.

The moratorium is one of the stumbling points in the ongoing negotiations between Greece and its creditors. [AFP]