Sale and leaseback is an activity that is expected to dominate the leasing sector this year. There is intense interest in this service among firms, many of which are currently asking leasing companies about possible uses. Interest in sale and leaseback is expected to increase further as a couple of weeks ago the government abolished the surplus value tax on property subject to a sale and leaseback contract, with retroactive effect to include contracts signed during 2003. This is the second major step after the abolition of the property transfer tax. «After the abolition of the surplus value tax and the property transfer tax, sale and leaseback is a tax-free transaction and becomes a major instrument for financing company investments. I predict the sales and leaseback market will expand impressively, especially in the property sector,» says Dimitris Kalatzis, general manager of the Credit and Marketing Department at EFG Leasing. Still, it would be premature to expect the signing of a large number of contracts ahead of the Easter holiday (which falls on April 11 this year), for two reasons. First, this financial service requires an exhaustive report on the credibility and creditworthiness of the interested parties. Second, there are general elections on March 7 and businesses’ interest in big investments tends to drop significantly ahead of elections. «I believe the positive effects of the legislation will become apparent later this year,» says Yiannis Mavrelos, managing director of Piraeus Leasing. All managers in the leasing sector share the conviction that the secondary investment market will flourish this year, thanks mostly to the Olympic Games and the infrastructure projects under way. As for sale and leaseback contracts, they expect a rise of between 30 and 50 percent. Last year, sale and leaseback contracts accounted for a quarter of total property leasing transactions, but their share will certainly increase this year. Managers agree that leasing companies ought to choose their customers with care in order to limit the risk of signing contracts that may prove to be non-performing. «Each leasing company should be very strict about a client’s creditworthiness before signing a property sale and leaseback contract. That said, we should note that the recent tax reform will be of immense help to Greek companies owning old buildings, whose only use was to mortgage them to get a loan,» says Aris Mazarakis, managing director of Attica Leasing.