ENFIA cuts are not for everyone

ENFIA cuts are not for everyone

The government is planning a further shift of the tax load to medium-sized and large property ownerships as it has promised to ease the burden on less expensive neighborhoods. Yet even the owners in the latter areas will only see small cuts to their Single Property Tax (ENFIA) dues, amounting to no more than 70 euros per annum.

Prime Minister Alexis Tsipras said at the Thessaloniki International Fair on Saturday that “the structure of the [property] tax will change to become more proportionate and fair, lighter for [low-income homeowners], and therefore rather a large property tax than a poll tax” on the majority of people.

The declared reduction of ENFIA by 30 percent will take place in the next couple of years and will amount to 50 percent for small owners, as Tsipras said. In fact, the measure was voted through Parliament last year, with the aim of offsetting the reduction of the tax-free ceiling to 5,685 euros per year in 2020.

The ENFIA cuts have been capped at 70 euros per annum, which means that the full discount of 30 percent (up to 70 euros) will apply to owners who pay up to 233 euros per year. Therefore an owner who pays 400 euros would have qualified for a discount of 120 euros (30 percent), but the 70-euro ceiling means the ENFIA cut will only take his/her dues to 330 euros – i.e. a 17.5 percent discount. It is no coincidence that Tsipras only used the example of owners paying up to 233 euros in his speech.

The situation is much worse for owners who pay ENFIA in excess of 700 euros per year. The law deprives them of any discount, and due to the expected change of the structure of ENFIA into a Large Property Tax (known since 1997, when it first applied as FMAP), they may well have to pay even more for their assets.

Still, according Tsipras’s speech in Thessaloniki, the revenue target from ENFIA has been set at 1.8 billion euros for 2020, down from 2.65 billion euros today. It remains unclear how this 850-million-euro cut will be distributed and who will benefit from it.

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