Ad­just­ing ob­jec­tive val­ues is prov­ing a tough nut to crack

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

The Fi­nance Min­istry is set­ting up lo­cal com­mit­tees around Greece with the ul­ti­mate aim of har­mo­niz­ing so-called “ob­jec­tive val­ues” (the prop­erty rates used for tax pur­poses) with mar­ket prices.

The min­istry is tak­ing this step be­cause the com­mit­tee it had orig­i­nally tasked with find­ing a new for­mula to cal­cu­late the rate in each zone failed to come up with a work­ing model. Ac­cord­ing to min­istry of­fi­cials, although the plan that task force pre­sented was tech­ni­cally com­pe­tent, it could not be im­ple­mented as in most ar­eas in the coun­try prop­erty trans­ac­tions range between zero and very few, and for that sys­tem to work it was vi­tal to have data from ac­tual trans­ac­tions.

One hun­dred com­mit­tees will be set up around the coun­try with the ob­jec­tive to ad­just 10,000 zone prices to mar­ket rates. Be­sides tax of­fi­cers and es­tate agents, com­mit­tees will also con­sist of prop­erty sur­vey­ors and of­fi­cials from the Bank of Greece and the Hel­lenic Sta­tis­ti­cal Author­ity (ELSTAT). They will have to de­liver their fi­nal pro­pos­als to min­is­ter Eu­clid Tsakalo­tos within De­cem­ber.

They will come up against the same prob­lem as the task force: the lack of data due to the low num­ber of trans­ac­tions. It is there­fore quite pos­si­ble that the com­mit­tees will be forced to give up and tell the min­istry they can­not de­ter­mine the new zone prices – in which case the min­istry will likely again ask for the post­pone­ment of the ad­just­ment of the ob­jec­tive val­ues to 2019.

Sources say the min­istry has ruled out the op­tion of a hor­i­zon­tal re­duc­tion in ob­jec­tive val­ues over fears of law­suits by ci­ti­zens; that was the case last year, re­sult­ing in the can­cel­la­tion of the val­ues the min­istry had set in six ar­eas of the coun­try. Ac­cord­ing to a se­nior min­istry of­fi­cial, “the big prob­lem is that in most ar­eas of Greece trans­ac­tions are very few, so set­ting zone prices will be dif­fi­cult, while it will be even more dif­fi­cult to mon­i­tor the mar­ket so that the new on­line plat­form the min­istry wishes to cre­ate with the val­ues of prop­er­ties can be fed with new data.”

He also points out that the trans­ac­tions cur­rently tak­ing place are mostly by peo­ple who ur­gently need the money, so sale prices may well not re­flect ac­tual mar­ket val­ues.

It is quite pos­si­ble the new com­mit­tees will find they can­not de­ter­mine the new zone prices – in which case the min­istry will likely again ask for the post­pone­ment of the ad­just­ment of the ob­jec­tive val­ues to 2019.

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