A host of tax breaks in bill due today
A tax bill due to be unveiled by Economy Minister Giorgos Alogoskoufis at noon today will include significant breaks for property owners and tenants. According to reports, as of the new year about 660,000 property rentiers will have 50 percent of expenses for repairs and maintenance, insurance premiums against fire and other hazards and legal expenses deducted from their taxable income. The measure seems to be designed to restrict tax evasion on house repairs and maintenance, as owners will now be considered more likely to ask for receipts. The present tax-deductable rate for such expenses is 15 percent. At the same time, the government is cutting the value-added tax (VAT) by 10 percentage points for the refurbishment of old houses. The rate that will apply from 2007 to 2010 will be 9 percent, and the ministry believes the cut will boost demand for such services. It will also hopefully provide an incentive for people to comply with VAT regulations, offsetting a significant part of revenues now lost. The bill also abolishes the 3.4 percent stamp duty paid by about 700,000 tenants. The centerpiece of the bill, already announced, is the raising of the tax-free ceiling by -1,000 euros to -12,000 for salary earners and pensioners and to -10,500 for the self-employed. From there, income brackets up to -30,000 will be taxed at 29 percent, and up to -75,000 at 39 percent. These rates will be reduced to 25 and 35 percent respectively in 2009. The benefits received by mothers of more than three children will be tax-free. The bill also includes tax breaks for disabled people, such as an increase of -500 euros to -2,400 euros of undocumented expenses deducted from taxable income and a reduction of VAT from 19 percent to 9 percent for certain appliances exclusively used by the disabled.