ECONOMY

Blanket tax on property

A committee of experts looking into the maze of property taxes will recommend to Economy and Finance Minister Nikos Christodoulakis the introduction of a blanket levy on all real estate items that will vastly increase revenues, sources say. The new, so-called property possession tax, will replace the existing Large Real Estate Tax (LRET) and the duty on real estate. The supplementary tax on property income and the tax on own use of real estate (exempting residences of more than 150 square meters in area) will also be abolished. The property transfer tax will remain and be reviewed next year if value added tax is introduced on new buildings. The sources said that the committee, which is to finalize its recommendations today, will propose that the property possession tax amount to 0.1 percent for residential uses and 0.05 percent for farming, industrial, commercial and professional uses. The tax will be levied annually, based on the officially determined property values according to area. Items valued up to 30,000 euros will be exempted. According to committee members, the new tax will reduce red tape but will also produce revenues which will be a multiple of today’s, as it will affect the vast majority of properties valued under 243,000 euros for single people – and scaled according to family situation – which are not subject to LRET today. In this sense, the tax, not being progressive, will favor large property owners. The Georgakopoulos committee, which released its report on an overhaul of the entire tax system last month, recommended that the tax be progressive. According to the latest detailed proposals, the new tax must be linked to income tax for reasons related to both control and management. Property owners will file a single form containing data for both taxes and allowing tax officials easier cross-referencing with the taxpayer’s income and other properties owned. According to a member of the committee, about 1 million taxpayers today are estimated to be liable to LRET but do not file separate property declarations. As part of the new measure, all property owners will be asked to file a special form declaring all properties in their possession and the tax department will use the list with all registered users of the Public Power Corporation for a proper implementation of the tax. DRY CARGO