New twist in prop­erty tax saga

Coun­cil of State forces gov­ern­ment to ad­just ob­jec­tive val­ues, which will im­pact on 2015 tax rev­enues

Kathimerini English - - Focus - BY NIKOS ROUSSANOGLOU

A Coun­cil of State decision yes­ter­day that forces the gov­ern­ment to ad­just the so-called ob­jec­tive val­ues of prop­er­ties within six months will lead to a fresh change to prop­erty tax­a­tion next year.

The ver­dict from the coun­try’s high­est ad­min­is­tra­tive court means that the prop­erty prices used for tax pur­poses will have to change around the coun­try by May 2015, while the gov­ern­ment’s plan­ning had pro­vided for the com­ple­tion of the new elec­tronic sys­tem for the ob­jec­tive de­ter­mi­na­tion of prop­erty val­ues no sooner than Jan­uary 2016.

Cru­cially, the decision cre­ates an ad­di­tional headache for the Fi­nance Min­istry as the sin­gle prop­erty tax (ENFIA) and the sup­ple­men­tary prop­erty tax are cal­cu­lated on the cur­rent ob­jec­tive val­ues. Bud­get pro­vi­sions for next year’s rev­enues also take into ac­count col­lec­tions of prop­erty tax cal­cu­lated with the ex­ist­ing ob­jec­tive val­ues.

De­spite state­ments by gov­ern­ment of­fi­cials about try­ing to bring the ob­jec­tive val­ues down to the ac­tual mar­ket rates, that would have been quite un­likely be­fore 2017 ac­cord­ing to a deal with the coun­try’s cred­i­tors – i.e. 10 years after their last re­vi­sion in 2007. The min­istry’s ar­gu­ment is that mar­ket prices will have to sta­bi­lize and trans­ac­tion vol­umes in­crease for a suf­fi­cient sam­ple to be­come avail­able for all of the coun­try’s re­gions – which does not ap­pear likely to hap­pen any time soon given the cur­rent eco­nomic con­di­tions.

The is­sue was taken to the Coun­cil of State by 13 prop­erty own­ers from var­i­ous parts of the coun­try who com­plained about the min­istry’s re­fusal to ad­just ob­jec­tive val­ues. They were sup­ported in court by lib­eral party Drasi. Yes­ter­day’s ver­dict said that the state has ne­glected to per­form the nec­es­sary ad­just­ments to the ob­jec­tive val­ues, which ac­cord­ing to a law dat­ing from 1982 must be ad­justed ev­ery cou­ple of years.

A few days ago a Bank of Greece an­a­lyst had stated that the ob­jec­tive val­ues of prop­er­ties cur­rently stand at about 15 to 20 per­cent above mar­ket rates.

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