Greece's new property tax

The Ministry of Finance announced on September 11 that a special tax would be assessed to all properties in Greece, raising an estimated ?2-3 billion to qualify for the next bailout tranche and avert default.

Original rates of ?0.50 to ?10.00 were doubled three days later to ?0.50 to ?20.00 under the assumption that many people will not pay, though the government was advised to keep rates low to increase the likelihood of payment.

The tax affects approximately 5.1 million properties and lasts two years, with 2012 rates climbing higher when the tax office readjusts property values.

Greece?s middle class is already struggling under the weight of increased VAT, salary cuts and solidarity taxes; and business owners complain that they are on the verge of closure.

IMF/ECB/EU representatives, collectively known as the troika, said that this measure alone is not enough and again postponed a return to Athens, after the most recent visit was cut short September 2.

*Article includes information from an amendment tabled Friday, September 16; and explains who is exempt, who pays how much and when, plus penalties for non-payment.

Who must pay

All persons who own commercial or residential? property in Greece, whether or not they live in Greece.

It is not a ?wealth tax,? as Forbes called it. The tax applies to all property owners, regardless of property value and income tax filing status. Thousands of unemployed will be required to pay this tax at the same rates required of wealthy elite.

Exempt

? Tenants renting or leasing a home: Tax will be assessed through the electricity bill, but anyone renting an apartment or house should pay the bill as scheduled and then deduct the amount of rent normally paid to the landlord. It does not matter whose name is on the electric bill. Work it out with the landlord/owner.
? Churches, monasteries and other religious buildings defined as places of worship and religious services; but not other residential or commercial properties owned by the Greek Church, one of the country?s largest landowners
? State-owned properties
? Embassies/consulates
? Non-profit and charitable organizations that use the property exclusively for a religious, artistic, educational or social needs purpose
? Factories
? Amateur athletic clubs, associations and federations, which have been legally recognized as sporting facilities
? Cemeteries, public burial places
? Historical or archaeological monuments
? Empty, abandoned, disused commercial property with no evident electricity supply

Electricity bills for communal areas of apartment buildings are excluded, so koinochrista or common expenses are unaffected.

*Note: Kathimerini English said hotels were exempt, but the official circular and Greek-language media sources did not.

OAED Card ? Image may not be reused

Unemployed, disabled and large families

Unemployed persons, disabled persons and large families (four or more children) are eligible for the lowest rate of ?0.50 per square meter, only if the property is:
a) less than 200 sq. meters
AND
b) located in non-affluent areas where property values (zone rates) are less than ?3,000 per sq. meter.

Surface area in excess of 200 sq. meters will be taxed at a higher rate.

If the property qualifies, there are two ways for the Ministry of Finance and power company to know if the owner himself/herself qualifies for the lowest rate.
a) If the owner resides in the property: Socially vulnerable groups should be registered for special rates offered by DEH/PPC and other power companies to large families, disabled, unemployed and other low-income households. See ?????????? ??????? ?????????.?

b) If the owner does not live in the property being taxed:
? Unemployed should be registered with OAED from January 1-August 31 in 2011 and January 1-April 30 in 2012, and this information will be passed to DEH/PPC or other power supplier.
? Long-term unemployed not collecting OAED subsidies must have a declared income of ?8,000 or less on their 2010 tax filing, and will need to submit an application via gsis.gr, which will be cross-checked and passed to DEH/PPC or other power supplier.
? Disabled should already be on record with a certificate issued by a public hospital.

The bill will be adjusted or a refund issued if tax was already paid.

*This section will be further clarified after giving the circular a third read and doing two interviews.

How much tax will I pay?

How much you pay depends on three factors:

1. Size of property

Total area is defined as all declared surface area with electricity supplied, including parking garages, storage rooms or balconies.

The size of your property in square meters (m?/??) or ????????? ????? (??) is listed on electric bills of all power companies. For DEH/PPC customers, on the same page as the perforated payment coupon, it is the number under ???? in the first box.

2. Location of property

Properties in Greece are assigned a zone rate or ???? ????? (timi zonis) according to location, with minimum and maximum values expressed in euros and square meters, i.e., ?1,800 per sq. meter. Eleftherotypia compiled tables for Athens, Macedonia/Thrace and other areas of Greece on the islands and mainland (in Greek).

The zone rate of your property will determine how many euros you will be charged per square meter.

To find the zone rate for your property, look for ???? ????? on the electric bill. For DEH/PPC customers, on the same page as the perforated payment coupon, the first box lists it under ????? ???????? ?????????? (???).

Zone rate	Euros per sq. meter
For vulnerable group	0.50
0-500	3
501-1000	4
1001-1500	5
1501-2000	6
2001-2500	8
2501-3000	10
3001-4000	12
4001-5000	14
5001 and up	16

3. Age of property

Properties between 0-25 years old will be assessed a surcharge of 5-25 percent, inversely proportional to age. The newer the property, the higher the percentage; the older the property, the lower the percentage. In tables published by the Ministry of Finance and Greek news, the percentage is expressed as a coefficient for multiplication purposes.

Age (Years)	Multiplier	Surcharge (%)
26 & older	1	None
20-25	1.05	5
15-19	1.1	10
10-14	1.15	15
5-9	1.2	20
0-4	1.25	25

As 64 percent of properties in Greece are more than 25 years old and only 2 percent built in the last five years, the surcharge is said to target those who can afford to pay.

How is it calculated?

Number of square meters ? ? ___? (based on zone rate) ? ___ surcharge (based on age of property)

For example: If your property in Halandri is 80 square meters, the zone rate is ?2000 per sq. meter and it?s 20 years old, the new property tax calculation would be:

80 ??6 ? 1.05 = ?504 for the year 2011.

Property values (times zonis) for 2012 will be adjusted higher, which will change the calculation and increase the amount of tax owed. So property owners can expect to pay more next year, and this article will be updated to assist you.

When can I expect a bill?

The annual tax is for two years and invoiced via electricity bills.

There will be two installments in 2011, with the first to begin billing in October and the second before February 2012 to show revenue on the books for 2011.

There will be four installments in 2012, billing from May to December.

*When I?m able to see what it looks like on an electric bill, I?ll add more details. Until then, I?m not a fortune teller and can only assume it will be in a box similar to that of the ERT tax.

Where do I pay?

You pay the electricity bill as you normally would.

What happens if I refuse to pay?

Anyone who refuses to pay or cannot pay will have their electricity cut.

DEH/PPC policy says interruption of service can occur in 44 days ? 30 days past the original due date of the ?Ekkatharistiko? (top right corner) and 14 days to pay after a courtesy ?final? notice. If the bill says ?Enanti,? then you technically have two (2) months plus 44 days before a potential power cut.

The state has also said it will seize and auction properties to pay outstanding tax debts, as required by law. Anyone with outstanding transactions pertaining to bankruptcy or selling and renting properties should make the necessary declaration at the tax office.

The electric company union (GENOP) has stated that it is ?not a state tax-collecting authority? and will not shut off power to households who cannot pay. However, the electric company has its own financial troubles with 175,000 disconnections since January, 450,000 to 909,000 delinquent accounts (depending on what source you believe) and ?135 million in arrears owed by the Greek government.

Locations

?List of DOY/eforia/tax offices in Greece?
?DEH/PPC Electric company offices in Greece?
?OAED offices in Greece?

Sources

In English
?Greece raises rates on new property tax? ? WSJ
?Few to get property tax break? ? Kathimerini
?Greek wealth tax: What a clever idea? ? Forbes
?Property values expected to jump 30 percent in 2012? ? Kathimerini
?Embattled Greeks plan legal action over property tax? ? Sky News
?Greek government warned to keep rates low? ? Kathimerini
?Greek property tax a band-aid, not a cure? ? Reuters
?Property tax details next week? ? Kathimerini
?Greek money running out amid opposition to new tax? ? Reuters
?Government heralds new measures? ? Kathimerini

*Only three sources were used for my article, but all were included for interested English-speaking readers

In Greek
??? ????????? ??????? ???? ??????? (Chart) ? Eleftherotypia
??????: ??? ?? ??????? ?? ????? ?? ?????? ??? ???? ???? ? Eleftherotypia
????????? ??????? ??? ??????? ??? 5,4 ???. ???? ?? 2 ???? ? Eleftherotypia
????? ?? 3 ????? ??????????? ?? ???????!? (Chart) ? Eleftherotypia
?????? ?????? ? ????
????????? ? ?????????? ??? ?? ?????? ????? ????????? kai PDF ? Ta Nea
??? ?????? ????? ???????? ?? ???????? ?? ???????, ???????? ?? ?????????? ? Ta Nea
?13 ?????????- ?????????? ??? ?? ???????? ? Ta Nea
???? ???????????? ?? ?????? ????? ??? ???????? ? Ta Nea
????: ???? ????? ????????? ?? ??????????? ?? ?? ??? ????? ????????? ? To Vima
???????? ???????: ???????? ?? ??????? ??? ?? ???????? (Chart) ? To Vima
????????: ??????? ?? ??? ?????? ??? ?????? ?????????? Naftemporiki

The Author

Kat is a well-traveled American journalist and author. To learn more, see ?About Me.?

• Livingingreece.gr was created in 2007 to present meticulously researched original articles that fill a gap left by traditional media, government portals and commercial websites/forums run by people without credentials.
• @LivinginGreece is a Twitter feed curated from recognized Greek and international news agencies to provide breaking news about Greece, plus real-time updates and insider tips mined from 13 years experience.

Please note my copyright policy and be aware that plagiarism and copyright violations will be pursued.

Shortlink: http://bit.ly/GRproperty

Source: http://livingingreece.gr/2011/09/19/new-property-tax-greece/

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