Circular on local taxes for homeowners withdrawn

The government was forced into an embarrassing climbdown on Thursday when it withdrew a circular to municipalities informing them that they could charge homeowners local taxes for illegally altered parts of their homes that had been declared over the last few months.

Deputy Interior Minister Giorgos Dolios informed Parliament on Thursday afternoon that the circular was no longer valid and he apologized to homeowners for any confusion.

The mix-up began on Wednesday when Dolios issued a circular to municipalities that said they could collect tax from homeowners for illegal parts of their homes that had been declared under a government scheme launched last year.

Dolios?s missive caused further confusion by saying the local authorities could charge the taxes, which cover such things as street lighting and refuse collection, retroactively for the last five years.

The circular proved extremely controversial because when the government passed a law last year allowing homeowners to declare illegaly altered parts of their properties, known as imiypaithrioi (semi-open spaces) in Greek, it stated clearly that those coming forward would not be liable for any further penalties or taxes.

Speaking to Skai TV on Thursday, Dolios suggested that his circular had been misinterpreted and that municipalities had always had the right to include illegally altered areas in the total size of a property, which is used to calculate local rates.

The Environment Ministry added to the confusion by saying that its law still applies and takes precedence over the Interior Ministry circular, suggesting that homeowners should not pay any extra municipal taxes.

Sources said that Prime Minister George Papandreou was angered by the mix-up and spoke to Interior Minister Yiannis Ragousis about it. Ragousis, a close aide of Papandreou?s, is said to have told the premier that he had not known about Dolios?s circular.

So far, some 500,000 people have come forward to declare their semi-open spaces and pay the relevant fine. The deadline for applications is the end of this month but it has been rumored the government will extend it for a second time because of holdups at town planning offices.

The initiative has raised more than 130 million euros for the Green Fund, which the government is using to fund the purchase of land that can be turned into public spaces by municipalities.

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