NEWS

Death of the Athens house

The overbuilt capital is in danger of losing its few surviving open spaces and modest buildings as land and homeowners rush to hand over their properties to developers in the wake of the government’s announcement that it intends to impose VAT on newly built buildings, experts told Sunday’s Kathimerini. The practice of landowners and people who own single- or two-story houses, often with gardens, in Athens transferring their property to builders in exchange for a share of the apartment block they build in its place has been going on since the early 1950s, when the law was first passed. This measure, known as antiparochi, led to the unchecked razing of swathes of traditional, neoclassical houses over the past 50 years to create high-rise buildings, obliterating most of the city’s architectural history. Antiparochi allows developers access to a piece of land at no initial cost – it is only once the apartment block is completed that they have to hand over a share to the person who owned the plot it was built on. Last month, Economy and Finance Minister Giorgos Alogoskoufis announced that he will submit in March a draft law imposing value-added tax (VAT) on new constructions and radically reforming the property taxation system. His decision provided a jolt to the property market, with landowners rushing to hand their plots over for development. Official figures show that there has been a substantial rise in the trend in central Athens – even in closely built-up districts, such as Kypseli and Patissia, where low, traditional buildings are a rarity – as well as in the suburbs. Dimitris Kapsimalis, president of the Building Constructors Association, told Kathimerini that after a 35 percent drop in construction in 2004, there is expected to be somewhat of a boom later this year as developers rush to get the appropriate licenses. The minister’s decision has given rise to fears of increases in the price of properties as well as construction prices. Alogoskoufis said that the imposition of VAT, at a rate of 18 percent from January 1, 2006, means that the objective value of properties must be readjusted upward to more closely reflect real market values. Economy Ministry officials have suggested a rise of 30 percent in the objective value of properties, for the purposes of transfer, and a wholly new system for the calculation of the objective value of new buildings.

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