ECONOMY

Surprise change to property tax

The Finance Ministry has taken hundreds of thousands of taxpayers by surprise with its emergency amendment to a bill regarding forests, as it blocks parents from passing on property to their children until the tabling of the tax bill in March. The amendment, tabled early yesterday, provides for the tax on property passed from parents on to their children to be temporarily calculated based on the current system (which is 1 percent of a property’s value that exceeds 95,000 euros), but for its final calculation to be made according to the new rates to be included in the bill that had yet to be drafted. This is an unprecedented clause that came into effect yesterday and practically involves the state suggesting to taxpayers that at some point it may tax them retrospectively, without informing them of the way in which this will be done or the tax brackets that will be created. In this unorthodox way, the ministry is trying to stem the massive flow of parental concessions seen over the last few months by taxpayers wishing to avoid paying the extra taxes that are likely with the change to the system in March. Papaconstantinou had warned about changes in property taxation when he took over at the ministry, but repeatedly stressed that the bill would be tabled in March, implying that taxpayers could make use of time until then to complete any such process. «The tax policy of a country, especially at times of financial crisis, cannot be announced in installments, with patchwork amendments,» said New Democracy spokesman Panos Panayiotopoulos. The amendment also included a 20 percent increase in consumption tax concerning tobacco and alcohol. Tax hikes on alcoholic beverages apply as of today, while cigarette price rises will come into effect on Tuesday. As written in the amendment itself, the tax increases are deemed essential in order to bolster public revenues and to deter consumers from using products that are harmful to their health.