Real estate tax reform planned for March

Economy and Finance Minister Nikos Christodoulakis is considering the abolition of dozens of separate taxes that burden real estate as a second stage in his planned taxation reform, sources say. On Thursday, the government unveiled a series of tax reduction measures targeted at both businesses and individuals as part of a strategy to kick-start the domestic economy, create jobs and lessen the tax burden on lower-income groups, in the frame of a broader reform of the taxation system planned for completion by 2003. According to the same sources, Christodoulakis is targeting the rejuvenation of the real estate market by facilitating transfers. Ministry officials believe the rationalization of real estate taxes, mainly based on a sizable reduction in the property transfer tax which today amounts to as much as 13 percent, will provide multiple incentives for increasing the supply of new and old homes. The ministry is also studying the potential repercussions of a revision in inheritance taxes on real estate prices. Particular significance is attributed to the creation of a favorable framework for housing development projects, which to date have been hampered by an extremely complicated tax system. Christodoulakis is said to believe that the new framework can be ready by March, when the overhaul is projected to be announced. The ministry is even considering a revision of town planning arrangements that would free the market of the inflexibility that permeates it today. According to bank estimates, the volume of transactions for all types of buildings could easily triple if tax disincentives did not neutralize the benefits offered by the now low interest rates. Banks, which have large property holdings and have already set up real estate subsidiaries, are especially keen to see a revitalization of the market. The projected reform comes at a time when the uncertainty in the global and the domestic economy is fueling interest in real estate as a safe investment haven. -Economy and Finance Minister Nikos Christodoulakis to chair a broad meeting on the part-privatization of the Public Power Corporation (PPC). Development Minister Akis Tsochadzopoulos to confer with PPC officials.

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