ECONOMY

New objective values by July 2021

new-objective-values-by-july-2021

By mid-2021 the process for the adjustment of the property rates used for tax purposes (known as “objective values”) will have been completed, according to the European Commission report in the context of the seventh enhanced surveillance report.

The Commission notes that the pandemic has frozen the procedures for data collection by surveyors, resulting in a delay in the updating of zone rates and the Single Property Tax (ENFIA).

However, the data collection that will lead to the determination of the objective values will be completed by the end of this year. The Finance Ministry agencies will then assess the valuations and implement the changes to the objective values where necessary across the country, along with the incorporation in the automatic values adjustment system of about 3,000 areas and their properties.

The report says that the agreed expansion of the existing zone-value system across the country should be implemented next year, with a scheduled deadline for mid-2021. This development, according to Brussels, has led to the use of the existing rates for this year’s ENFIA, setting the budget back by about 180 million euros, or 0.1% of gross domestic product.

If the objective values are updated as of July 2021, the government will proceed with the planned reduction to ENFIA. The ministry is expected to advance to the second stage of changes to property taxation with changes to ENFIA (that is supposed to undergo an average cut of 8%) and the objective values. The benefit for each owner will depend on the changes to the objective values.

The alignment of the zone rates with market prices as of July 2021 will determine whether the final ENFIA bill will indeed record that 8% reduction: In some cases the cuts will reach up to 20%, in others they will come to 10%-12% and there will be cases with a reduction that will be less than 8%. In areas where large hikes to zone rates are recorded, the 2021 ENFIA will undergo a big cut. The Pissarides committee has also recommended the abolition of the supplementary property tax.