ECONOMY

Property rates leak sparks row

The leaking to the press on Tuesday of Finance Ministry proposals for steep increases in the so-called objective property prices – on the basis of which transfers are taxed – drew a strong denial from the government and created a minor political storm yesterday. Economy and Finance Minister Giorgos Alogoskoufis accused the main opposition PASOK party of «a methodical attempt to create political capital» with false data. «Such attempts are harmful to society and give rise to confusion and speculation,» he said. «We have given instructions for an investigation to reveal those that play such games at the expense of citizens.» «PASOK-affiliated public servants had the temerity to leak in a coordinated manner to the media supposed proposals for increases in the objective values,» he added. PASOK’s parliamentary spokesman Haris Kastanidis retorted by asking Alogoskoufis why he had ordered an investigation if he had identified the culprits as being affiliated with the opposition. Alogoskoufis said the objective values will be officially announced in due course and will go up moderately in stages over the 2006-2008 period. «Our goal is to rationalize the private construction market and tackle tax evasion without upsetting the economy and the citizens,» Alogoskoufis said. «Besides, the draft bill we have already unveiled concerning the gradual introduction of value-added tax (VAT) on new constructions is based on precisely this logic, of the gradual implementation of policy.» Objective prices have not been upped for four years and lag considerably behind commercial values in some areas. According to the leaked document, they will be raised by up to 265 percent near some Athens metro stations and popular seaside resorts in Attica, such as Saronida and Anavyssos. In combination with VAT on new buildings, the higher objective prices are estimated to increase the property transfer tax by up to 600 percent. Market sources argued it is unlikely that the government will raise the objective values in 2008, which is an election year.