The Greek economy has been deprived of foreign investment funds that could run up to 3 billion euros in the long term due to the imposition of a tax that fetches no more than 25 million euros a year.
This concerns the sevenfold increase of the tax unexpectedly introduced on property investment companies (AEEAP) in mid-2016, and as proven in multiple similar cases, the increase in taxation generates economic losses that are many times greater due to the containment of potential investments.
Speaking to Kathimerini, sector officials have described a failed intervention in one of the economy’s most dynamic markets in the last 18 months. In June 2016 the government decided to hike the tax rate on the entire set of AEEAP assets (properties and deposits) from 0.105 to 0.75 percent per annum. There was also an increase in the supplementary property tax, imposed on top of the Single Property Tax (ENFIA) for the properties that AEEAP firms utilize, amounting to 0.55 percent from 0.25 percent previously.
“If we had the tax framework we had up to mid-2016, considerable liquidity would have flowed into the Greek real estate sector,” Giorgos Chrysikos, managing director at Grivalia Properties, commented. “After two decades of AEEAP operation in Greece the value of their portfolios has come to 3 billion euros, while Spain has seen over 15 billion in investment in just four years,” he adds.