ECONOMY

Single annual property tax to replace current 30 charges from 2003

The Finance Ministry plans to do away with all property taxes, estimated at about 30 in all, effective January 1, 2003, replacing them instead with a new annual tax. The new levy will be implemented in 2003 at the same time that the value added tax (VAT) on new buildings comes into effect. In the same year, the ministry also plans to jack up the objective values for real estate to today’s market values. A high-ranking Finance Ministry official said the proposed annual tax will determine the objective value of property. It is expected to amount to 0.2 percent of the value of the real estate. Property owners will be required to pay the tax when filing their annual tax returns. For example, based on the preliminary draft, the owner of a piece of property worth 100 million drachmas will be required to pay an annual tax of 200,000 drachmas to the income tax office. The ministry is also planning to abolish the present tax-free threshold, substituting it instead with a scale which would take into account the property owner’s marital status and the number of offspring. The official said the proposed tax measures would simplify property taxes without burdening taxpayers. The government, however, is still undecided on taxes relating to inheritances, donations and parental gifts. The prevailing thought is to reduce these levies dramatically. Another tax which the State has yet to decide on is that in regard to first-time house purchases. One levy that will be abolished is that governing high-priced real estate. The general secretariat of information systems is due to finish recording all expensive property by the first quarter of 2002. To date, it has already entered 22 million real estate properties into its computer files. By the end of March, it should have registered all land sales and purchases transacted this year. It stressed that the company’s ability to respond effectively to the situation came amid freezing weather in northern Greece as staff worked round-the-clock and through holidays in order to handle the hike in demand.