ECONOMY

Tax spurs sale of private islands

The supply of private islands in the market has grown considerably in the last few months, although demand has been far smaller. Sources suggest that at least 27 islands and islets have been put up for sale at various points recently, although some of their owners have then decided to temporarily withdraw the «for sale» notice, hoping to see the economic climate improve or at least an organized plan for the tourist use of those pieces of land. The focus – as is usually in this segment of the market – is on the islands owned by the Onassis family, Athina Onassis in particular. They are the well-known Skorpios, as well as Kastri, Starti and Tsokari, which are next to the town of Nidri on Lefkada. Market sources argue that there have been certain proposals for the acquisition of some of these islands and negotiations are currently ongoing. Interested buyers are said to be major local entrepreneurs, offshore companies of Greek and foreign interests and even investors from the Middle East who would eye a private island for their own use. Other islands to have gone on the market are Atokos, which belongs to the Tsakos family, Patroklos (near Attica) of the Giatrakos family, Revmatonissi (in the Cyclades) owned by Dolly Goulandri and Carlonissi (in the Ionian) of the Vlastos family. Some, however, have now been withdrawn. Yet regardless of the prestige a private island offers its owner, the baggage that comes with it tends to be far greater. In the last couple of years demand for islands has been low in Greece, which has disappointed many owners, some of whom have inherited them and are unable to meet the tax costs of ownership of an entire island. The situation has become even worse for them recently given the lack of cash flow in the market, which has led to island prices dropping by 10 percent in the owners’ effort to attract buyers. Even so, the cost of a private island ranges between 5 and 10 million euros – sometimes more for the larger ones. The price depends on the location of the island, its distance from the mainland, its size and whether it can be developed. Mike Vassiliou, the head of FIABCI Greece, the local arm of the International Real Estate Federation as well as the director of NAI Real Estate company, suggests that «the most important thing for an island is its proximity to land, for easier connection with utility networks. «Another crucial factor is the existence of water on it, which can bear on an island’s value, while its natural ports for easier access are also significant,» he adds. There is another reason why buyers may be turning to private islands nowadays, and that is the forthcoming adjustment in the land prices used for tax purposes, as today’s buyers could reap significant capital gains in the future.