The properties that have seen their value nosedive since the start of the crisis are also those that show the biggest gap between market prices and so-called objective values, i.e. the property rates used for tax purposes. Despite the adjustment of taxable rates a few months ago, which led to reduction of between 10 and 15 percent, most parts of Attica face a huge gulf between market and objective rates.
A Kathimerini survey conducted in cooperation with the Dimitris Kontopoulos notary office and the Binswanger Biniaris property services company, shows spreads reaching as high as 65.7 percent, illustrating the continued distortion in the market despite recent adjustments to objective values.
The difference between market and taxable rates is so high that in Kypseli, central Athens, for example, the going price of one 100-square-meter flat aged 25 years comes to just 35,000 euros, while its objective value is set at over 102,000 euros. To calculate the spreads, the survey focused on older properties (of 25 years) as a reference point, as it is these that have suffered the biggest loss in value without seeing this drop reflected in their objective rates.
Estate agencies estimate that the total decline in prices for older apartments has been around 50 percent since 2009, without their taxation reflecting it. The injustice against tax-paying property owners is even bigger when we add the fact that the new supplementary property tax will now apply to owners of properties worth up to 200,000 euros, down from 300,000 euros until last year.
Dimitris Biniaris, the head of the estate agents federation (OMASE), notes that the gap will continue to grow as prices are certain to continue sliding. Market professionals estimate that the new package of austerity measures introduced by the government will lead to a new cycle of declining property prices, meaning the end of the crisis in this market does not appear to be on the horizon. They stress that the new, even higher, tax bill on properties emerging from the bailout agreement will extend the duration and possibly increase the intensity of the recession in the property market.