ECONOMY

Tax-free threshold planned for ENFIA

tax-free-threshold-planned-for-enfia

The Finance Ministry is planning to introduce a tax-free threshold for the Single Property Tax (ENFIA) for next year, as well as to incorporate areas on mainland Greece and on the islands that have luxury mansions but very low property taxes into town-planning zones.

Sources say that the threshold will not exceed 20,000 or 30,000 euros and will exclusively concern owners of properties valued up to that amount. In 2016, over 6.1 million property owners will effectively pay a new property tax whose annual revenues will be the same as the current tax, at 2.65 billion euros. According to a senior ministry official, this is to ensure that any changes, including the new objective values to apply from September 2016, will not entail any reduction in the takings target, which is also dictated by the bailout agreement.

The owners of properties totaling more than 20,000-30,000 euros will be taxed from the first euro, so the planned measure will only concern owners of very small properties. Were the threshold to be set at 50,000 euros, the same ministry source said, 2.7 million owners would have been exempt from ENFIA, putting the achievement of the target at risk.

In case the threshold of 20,000-30,000 euros is introduced, all other exemptions that currently apply will be abolished.

The ministry now wants to include in town-planning zones parts of the country where luxury properties have been located and are taxed at a rate of just 1 euro per 1,000 square meters. This problem will be dealt with when objective values (property rates used for tax purposes) are adjusted next September.

The ministry will also amend the ENFIA calculation model via changes to the rates and the zone brackets. The aim is to reduce the burden mainly on owners of low- and medium-priced properties, whose objective values do not exceed 800 or 1,000 euros/sq.m.

The supplementary tax, imposed on owners whose properties are valued at more than 300,000 euros, will likely see its rates grow from the current range of 0.1 to 1 percent.

As for the 2015 ENFIA, the notices for 6.1 million property owners will be issued by October 15, and the first installment will be due by October 30.