ECONOMY

First homes to be exempted from tax

First-time home buyers will be exempted from taxes, except municipal rates, for residences up to 250 square meters, Deputy Finance Minister Antonis Bezas said yesterday. «There will be a ceiling of 250 sq.m. that will be exempted from taxation, which will be increased by 25 sq.m. for every child after the third,» he told a press briefing at Alpha radio station. Bezas said the single property tax will be paid for the first time in 2008, replacing a multitude of existing levies, including the inheritance and parental transfer taxes. «These taxes will be abolished. The present tax-free ceiling will be retained, above which the single property tax will be 1 percent. This will include relatives of the first and second degree. These provisions will be included in the bill on fuel taxation and distribution, to be tabled within 10 days at most,» he said. Separately, Economy and Finance Minister Giorgos Alogoskoufis said one day after the tabling of the 2008 budget that the new provisions expanded the property tax base. «Of the additional revenue of -6 billion envisioned in the budget, -4 billion is not new taxes but taxes that are due on higher incomes. «The remaining 2 billion in new taxes we have calculated will come from fighting tax evasion, particularly from the plan to equalize the automotive and heating diesel taxes. «The rest will come primarily from property taxation, which will be expanded, and from a widening of the tax base,» he told Skai Radio in an interview. The budget draft provides for total property tax revenues of -900 million, up 275 percent from this year’s projected -240 million. Asked if his colleagues’ understanding had improved now, after the tabling of the budget compared to their demands before, he said, «This is a universal phenomenon in all countries before the budget is tabled.» «It is logical for every ministry and minister to want ever greater budget credits, but in the end the government, through collective processes, arrives at a budget draft which reflects its priorities as a whole,» Alogoskoufis said. Finally, he said the government will probably introduce the new, revised, table of official property values for tax purposes in the spring.