ECONOMY

Property value gap grows between different zones

property-value-gap-grows-between-different-zones

The Finance Ministry’s blueprint for the adjustment of properties’ taxable rates (known as “objective values”) provides for hikes to the zone rates in the center of Athens and reductions in less well-off areas of the capital.

Sources say that ministry officials intend to lighten the tax load on property owners in districts such as Perama, Korydallos, Nikaia and Keratsini, while raising rates in Syntagma, Pangrati, Kolonaki and even Ambelokipi, due to the great increase in demand recorded over the last 12 months.

This is despite the fact that the existing objective values, adjusted last year, are in most cases higher than the market rates.

With this move, the government will continue to place a greater burden on the owners who are already paying the bulk of the Single Property Tax (ENFIA), while making ownership even cheaper in other neighborhoods.

However, the plan is awaiting the approval of the country’s creditors, who have asked the government to adopt last year’s recommendations by commissioned property surveyors that were not used after all during the 2018 adjustment.

The creditors are insisting on that because the rates proposed by the surveyors provided for hikes in several districts in the southern and western suburbs of Athens where the construction costs for new homes are above the ministry’s zone rates.

Likewise, the recommendations for zone rate hikes in several other cities and towns around the country were rejected to avoid an increase in ENFIA dues.

Ministry officials concede that the new rates are almost ready, but have not ruled out a significant delay in their publication, possibly around the end of the year’s third quarter.

Although the new values will only come into force in 2020, their upward adjustment is expected to offset to a great extent the benefit from the promised 30 percent reduction of ENFIA.

According to the government’s agreement with its creditors, the objective values will have to match market rates by 2020.

A recent European Commission report confirmed that the government avoided the adoption of the 2018 recommendations by surveyors to avert major ENFIA hikes.