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Property Tax: Greece’s “unfair tax” based on property values of 2007, when prices down -40%

“Grace period” for Greek paying extra taxes is over. The Greek Finance Ministry will send the Unified Property Tax notifications to millions of property owners in a couple of days. For one more time, Greeks will be called to dig in their pockets and pay one unfair tax. Unfair because the FinMin calculations are based on the objective value of the properties, values that were valid in 2007! A real thief-approach as property values dropped by 40% in the last 5 years of the economic crisis.

The Greek justice had ruled in summer that “the objective values” had to change and be customized to the real values of 2015. The government had ‘promised’ reductions of up to 30% for the ENFIA. But short before the elections, former Deputy Finance Minister Nadia Valavani told media that the ENFIA cannot be based on the new objective values as this could cause the tax to “increase in low-income and downgraded areas”, while it would decrease in the more privileged areas.

The ENFIA will come in five installments with the first ought to be paid around October 20th and the last one in February 2016.

ENFIA reductions are foreseen as in 2014 for the unemployed, large families or families with 3 children, orphans and persons with disabilities over 80%. However, also for these categories additional income and property value criteria will be taken into consideration.

The ENFIA was introduced in 2011 as a “temporary tax” for 2 years. But nothing is more permanent than the temporary in a country that needs to strip off its citizens to pay back debts and interest rates.

It is one more tax not calculated according to the payment abilities of the tax payers but on fictitious property values that have stopped to be valid 4-5 years ago.

This fictitious property value calculation could cost the property owner some extra hundred euros. But who cares? Every lender thinks that Greeks have a euro printing machine at home. Total revenues expected from the ENFIA are fixed in the 3.bailout as 2.65 billion euro. Every year.

If I am not wrong, the last ENFIA-2014 installment Greeks paid was in March 2015. ENFIA-2014 was in six installments, ENFIA-2015 is in five and that means that the monthly amount to be paid will be higher.

Oh, yes! They need money asap.

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  1. Is this tax “unfair” because the property prices did not come down evenly since 2007 across all properties/areas? Maybe, this is what Ms. Nadia Valavani meant when she stated that people in low-income will need to pay more (presumably, because the prices of their properties did not come down as much as in the “more privileged areas”).

    In the end, no tax is “fair” because the government takes from the citizens their hard-earned money… except for the harsh reality of the last sentence – governments “need money asap”. The first question of fairness is how much money the government should collect in taxes overall (since some citizens will pay more taxes than others). The second question is how this overall amount should be distributed between different types of taxes. Higher proportion of that amount collected through VAT favors the savers. Higher proportion collected through income tax favors the low-income people. Higher proportion collected through property / wealth tax favors the poor. Only after determining how much property tax overall should be collected the government has to decide what percentage of the home assessment should be collected. For example, if in a year the prices of all the houses go down by 50%, but the government collects 2% instead of 1% of the assessment in property tax, the same amount of taxes will be collected.

    • keeptalkinggreece

      you’re right. yet, all taxes are unfair when they are on unreal values and unreal incomes. and they get even unfairer when they do not return to taxpayers in terms of infrastructure and services.

  2. René Henri Pasche

    You are right as far as the “normal” house owners are concerned. But beside that you have the many speculators and profiteers that bought the houses of those who couldn’t pay their mortgage. Should they profit twice?

  3. Surely in 2007 objective values were still lower than sales values in most cases and these were the values used to calculate sales purchase tax at very high rates (compared to other EU countries). I belive it is only since the sales purchase tax was reduced that objective values have been raised inline with sales values.
    As Plamen says, Tax must be colllected somehow and Greek property taxes, plus the small amount for ‘dimarkeio’ on electricity bills, are generally far less than (eg) British Council tax on equivalent homes.

    • keeptalkinggreece

      at the very end, GR never manages to equal objective values & commercial values

    • Giaourti Giaourtaki

      Tax “must be collected somehow” only to build hospitals and streets to then sell them to rich money-suckers until they’ve sucked dry enough so that they can buy their 3rd Ferrari and another Yacht for the cocktail parties the politicians hope for to get invited to have a free coke, and hospitals and streets have collapsed and need to be renovated with tax-money.

  4. Well, like it or not, at the last election, the majority of the Greek voters effectively voted for more austerity.
    That’s democracy.

    • keeptalkinggreece

      majority? I remember 35,36% for SYRIZA, 3,42% for ANEL =39,89%. where in the world is 40% more than 60%?

      • Yes but ND also support the austerity measures.

        • keeptalkinggreece

          of course. and PASOK and Potami. so what was the alternative for the voters?

          • Only KKE I suppose, but not really an option for pro Europeans.
            It really was Hobson’s Choice then.
            Greece has the highest proportion of self employed in Europe at 30.4% compared to the EU average of 13.5%.
            Collecting income taxes from the self employed is notoriously difficult throughout the world, whereas property tax is relatively easy.
            Whatever politicians might promise I doubt any government will scrap it once implemented.
            Ilook forward to being proven wrong.

          • Giaourti Giaourtaki

            “Europeans” might wonder that without the historical forerunners of KKE there wouldn’t be the modern Greek language of today but we’ve also had to learn taught by “Europeans” that Greece is not Europe but a “ghetto” anyway because most Greeks are so unfriendly and refuse to write in Latin or Cyrillic dialects of Greek.

          • “Greeks are so unfriendly”?
            I don’t believe that at all. I’ve found from my own experience they are mostly very friendly and hospitable.
            Greece not Europe?
            Where is it?

          • Giaourti Giaourtaki

            Where it is? In your post “pro European” as if KKE or anyone against EU wouldn’t be Europeans.
            So any anti-austerity must be anti-European and the rest you will find in any Troika bastard that is since 6 years refusing to learn Greek and complains about the Greek language as an unfriendly problem for “investments” and Greece as a self-made ghetto that is not refraining from her funny language.
            It’s just like Germany wants to teach all refugees German instead of themselves and them Greek or Italian so that both sides could learn something real and not this copy of a copy of a copy that is so complicated because these jerry jerkoffs never thought of a difference in writing and speaking ancient Greek and just copycat their dullness.

          • I am sorry , you misunderstood my post.
            Perhaps I should have been more clear in what I was saying. Does this help:-
            The KKE was the only anti-austerity party but not an option for pro EU voters.

          • Giaourti Giaourtaki

            I’m sorry too for my misunderstanding but I didn’t have written that Greeks are unfriendly, btw.
            The main problem still remaining is that only 19.5% of all voters voted Tsipras.
            That the KKE is not voted has more to do with their Stalinist background than with their program, as was manifested in the last big anti-austerity riots on 12/2/12 that took the title: “The treaty of Varkiza is broken”

  5. I believe this tax is pretty fair. Many many properties are the result of money laundering, tax evasion or black market money. By the way, Greeks have an incredible property rate. Most people I know owe at leats 2 our 3 properties while complaining how poor they are. Since it’s nearly impossible to raise tax on a normal way, there is no other solution than strict real estate taxes.