OPINION

A warped system of tax on property

Plans to impose VAT on real estate transactions have seriously shaken an already distorted market. Combined with two other key factors, the situation is becoming unbearable, as well as typically Greek. The (illegally) delayed revision of the prices used by the tax office to determine the tax payable on properties (known as ‘objective values’) and a draft bill for a framework to regulate the proliferation of illegally built extensions to properties both serve to put potential house-buyers at the mercy of vendors and public services. Let us be clear that the imposition of VAT on property transactions is a way of reforming our tax legislation as well as meeting our obligations as part of a single market. Furthermore, the determination of objective values by the tax office – a measure whose implementation was delayed by the previous government – is a very good way of curbing illegal transactions. But steps should have been taken to discipline this semi-illegal regime to prevent homeowners from becoming hostage to the system. And the current government bears much of the blame, as it contributed to making an already corrupt regime even more degenerate. We know that tax on a property constitutes part of its price; it has a major influence on landowners and it guides the decisions of citizens and businessmen alike. The government has also suggested that it will push through additional changes regarding the tax paid on property. As a result, house prices have been blown out of all proportion by those seeking to make a profit.