Prop­erty value re­view a hard task

Kathimerini English - - Focus - PROKOPIS HATZINIKOLAOU

The govern­ment is fac­ing a daunt­ing task in ad­just­ing the so-called ob­jec­tive val­ues (the prop­erty rates used for tax pur­poses) to mar­ket lev­els by the end of the year, as its bailout agree­ment dic­tates.

The huge slump in transactions and the forced sales of prop­er­ties due to their own­ers’ debts do not lead to any safe con­clu­sions for the val­ues per area. One in four sales are con­ducted with prices that lag the ob­jec­tive value by 60-70 per­cent, and the prices of 2008 by 7080 per­cent.

The Fi­nance Min­istry must over­come all the ob­sta­cles to bring to Par­lia­ment all the nec­es­sary ad­just­ments and reg­u­la­tions. More­over, once the ob­jec­tive val­ues are brought in line with mar­ket rates, the govern­ment will have to main­tain the same amount of rev­enues from the Sin­gle Prop­erty Tax (ENFIA) ei­ther by rais­ing the tax’s rates or by in­tro­duc­ing a new tax in the form of the old Large Prop­erty Tax.

Fur­ther­more, once the ob­jec­tive val­ues are re­duced by 40-50 per­cent to match the go­ing prices, banks’ may see prob­lems with their cap­i­tal ad­e­quacy, as lenders will in­cur losses by hav­ing to re­vise the col­lat­eral they get. Mort­gage loans in Greece amount to 59.44 bil­lion euros, of which 42 per­cent, or 25.4 bil­lion are non­per­form­ing.

One in four sales are con­ducted with prices that lag the ob­jec­tive value by 60-70 per­cent.

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