ECONOMY

Property tax is a burden for market and for GDP

The existing tax status of real estate properties constitutes a burden for the economy’s effort to recover, a counterincentive for investments and the main factor for the devaluation of properties, according to bank officials and real estate professionals.

A recent survey by the European Commission showed that Greece now has the fifth highest property taxation in the European Union, as in 2012 the state collected 2.8 billion euros from the various property taxes, i.e. 1.4 percent of the gross domestic product. Before the crisis that rate did not exceed 0.4 percent of the GDP.

Excessive taxation has contributed considerably in the major decline in house transactions, that in the second quarter of this year posted a further 43 percent decline year-on-year, while investment in new constructions went down by 41.3 percent in the same period.

Those developments have had a negative impact of almost 1 percent of GDP on the economy, following a 1.26 percent impact on the GDP during the first quarter of the year.