ECONOMY

Single real estate tax

The government is planning to impose a single annual property tax, promising owners that it will merge or abolish a patchwork of taxes imposed today, some of them through local authorities. «In the third stage of tax reforms, various taxes on real estate property will be substituted by a single low tax. This will allow for the simplification of the system and the lightening of the load for property owners,» said Economy and Finance Minister Giorgos Alogoskoufis. The competent Finance Ministry departments have submitted their proposals to the minister for the application of a single tax on real estate, to include such taxes as the Large Property Tax and the real estate levy. It will also incorporate the additional tax on income from properties, the owned residence tax and possibly various other taxes imposed by local authorities. The general aim is that taxation becomes more fair, broader and that the distortions created by the selective imposition of tax be reduced. The single tax will have a relatively low rate so that the tax obligation can be covered by taxpayers’ incomes, without forcing them to liquidate some of their properties to pay for the tax. There will also be tax-free ceilings, depending on the size of properties owned or the income of each taxpayer. Today all taxpayers have to pay various taxes imposed on real estate, and not just those who own large properties. Property taxes affect both owners and tenants who pay the real estate tax through their electricity bills. The new tax, according to a high-level ministry official, will be based on the so-called objective value of every property, that is, the price determined by the state for tax purposes. The rate to be used may well change depending on the area and on the size of each taxpayer’s overall property ownership. Small objective value properties may be exempt from the single tax. The ministry’s aim is to help the property market remain flexible and to smooth long-term negative impressions that dissuade foreign investors from investing in Greek properties, as well as to curb tax evasion.