New official property rates

After several delays, the government yesterday announced lower-than-expected official real estate tax rates – the so-called «objective» prices for tax purposes, which will come into effect on March 1. The average weighted increase for areas included on official town plans around the entire country is 16 percent, and for outside town plans, where rates have not been revised since the system was first introduced in 1999, rates remain at 37 percent. Deputy Finance Minister Antonis Bezas, who announced the new rates, said the government, in order to offset the resulting additional tax burden for prospective property buyers in 2007, had decided to raise the tax-free ceiling for first-time home buyers by 20 percent, as well as breaks for taxes on inheritance, gifts and parental transfers by between 20 and 33 percent. In some town zoning areas, particularly in eastern Attica, which has been quickly developing in recent years, and the upmarket districts, the increases in the objective rates vary between 38 and 87 percent. Realty market players describe the increases as on the whole reflecting social considerations, and view the increases in eastern Attica as expected. For instance, in the country’s most expensive district, Laimos Vouliagmenis, south of Athens, the top objective rate goes up to 8,800 euros per square meter, which equals the average current market prices. Eastern Attica In eastern Attica’s Polydendri, the top official rate goes up 86.67 percent to 1,400 euros, in Porto Rafti it is 40.7 percent and in Pikermi 40 percent. By contrast, the lowest increases in Attica, varying between 5.5 and 7.5 percent, are to be found in the areas of Marathon, Perama, Lavreotiki, Ano Liosia, Malakasa, Avlona, Oropos and Zephyri. Finance Ministry officials said the increases are designed to help rationalize the system, as market rates have diverged considerably from official ones. Indeed, in some areas the gaps have grown by up to 50 percent. The present increases in the official property prices complement last year’s in other areas, which averaged about 30 percent.