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- More people to fall into the annual Property Tax gathering net from early 2011.
July 30, 2010 -- To generate more tax income from inheritance tax and real estate taxes, the Greek Government will revise upwards the "objective" values on property and land from the tax year, 2011. The tax year in Greece runs from January 1 until December 31 each year, as designated by the Economics Ministry.
These rises, on average will be 50 per cent, while some top end real estate will attract more than a 200 per cent increase. These moves will mean the tax net will widen to bring between 60 and 70 per cent of property owners in Greece into the real estate tax net. A special one off home owners property tax was already introduced in 2009.
What is Objective Valuation of property?
"Objective Value" is the value of buildings and land calculated for each administrative area on which to base the annual tax rate. Traditionally objective values are far below the commercial transaction price. Greece is still the only country in Europe, except Albania that is without a fully computerized land registry (Cadastre). It is currently going through a massive project to change this situation, known under the name of "Ktimatologio", in effect a cadastre* project. The disparity between objective value and market price for a given piece of property can be very high. This difference has been an advantage to buyers of property in a transaction as the tax office uses the objective value on which to access how much tax has to be levied.
Explanation of the Planned Objective Value Changes
The objective value changes being planned, and those that have been imposed in recent years, by the Economics Ministry are an attempt to close the disparity in value calculation. In other words the tax offices around the country want to collect more taxes, hence the need to increase the tax base by increasing values of property and land and bring more taxpayers into the net by narrowing the gap between the two rates.
This is a new "blanket property tax" but will likely include exceptions. The "one off" special property tax imposed for the tax year 2009 appeared to exclude some poorer rural areas where objective values fell below the national average.
Please let us know if you paid the special property tax in 2009 when you completed your tax form at some point between January and May 2010.
The status of the real estate market in Greece in 2010:
- is subdued due the much tighter lending criteria imposed by banks on home buyers;
- has seriously slowed due to Greek consumer concerns over the impact of the revised Objective Values on property on their wallets from 2011;
- the recently introduced tightened Inheritance Taxes will impact on the average Greek family which traditionally builds their homes for future generations, and not for general resale on the market, and
- the new "general" real estate tax based on revised objective values will impact on homes (and commercial premises) left empty for long periods (for example: for the first time, many family houses left unoccupied and often derelict in home villages cross Greece are expected to be taxed.)
*Cadastre or Cadaster means a register of measured and surveyed area, a property showing the extent, value, and ownership of land for taxation. It is believed the words are taken from old French and the classic Greek word, "katastikhon" meaning list or register.
NB: This information has been compiled by BritsinCrete from Greek Press reports during July 2010 of how Greece is asking home owners to make greater contribution to national taxable income through increased property taxes.
More Useful Articles for Expats in Greece for Both UK and Greece Taxation - From BritsinCrete
- January 1, 2009, Greece Tightens Tax Collection.
- Advice on UK Tax Issues and how to Leave UK and leave your obligations behind!
- Impact of UK's 2008 Finance Act Changes on Brit Expats Working/Living Abroad
- Expats Living in Greece and/or with Property - Guide to Their Obligations to the Greek Tax Man.
- Greek Inheritance Tax 2006-2007 onwards Useful General Reference.
- Almost Total Abolition of Greek Inheritance Tax from 2008 onwards.
- Amendments to Greece Tax Code from January 1, 2009 onwards (This Page).
- Major Changes in Inheritance Tax from January 19, 2010 onwards.
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