Con­fu­sion over ENFIA re­duc­tion for prop­er­ties above 60,000 eu­ros

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

Par­lia­ment may have voted late last month for the av­er­age tax­payer to pay 10 per­cent less in next year’s Sin­gle Prop­erty Tax (ENFIA), eas­ing the load on small prop­erty own­ers, but the Fi­nance Min­istry has still not pub­lished the for­mula ac­cord­ing to which the tax is cal­cu­lated, so no one is able to ac­tu­ally plan how much money they’ll need to put by for it.

The clause that was voted pro­vides that if the to­tal value of an in­di­vid­ual’s prop­erty as­sets comes to 60,000 eu­ros, “the ENFIA due is re­duced 30 per­cent, and for ev­ery 1,000 eu­ros of value above 60,000 eu­ros the dis­count is re­duced by 0.70 eu­ros, and can­not ex­ceed 100 eu­ros.” Nei­ther pro­fes­sion­als in the real es­tate sec­tor nor ac­coun­tants un­der­stand the clause, par­tic­u­larly how the dis­count is re­duced for prop­er­ties worth more than 60,000 eu­ros.

Data show that some 3.49 mil­lion own­ers with as­sets val­ued at up to 60,000 eu­ros will save 55 eu­ros each on av­er­age, while tax­pay­ers with larger prop­er­ties will see the dis­count re­duced un­til it comes to zero for own­ers of as­sets worth at least 200,000 eu­ros.

In fact, those min­i­mal re­duc­tions for small prop­erty own­ers may even come to noth­ing given that next year (as well as in 2020), the tax­able rates of prop­er­ties (known as ob­jec­tive val­ues) will be re­vised, lead­ing to sig­nif­i­cant changes to the cal­cu­la­tion base.

The clause has a num­ber of gray ar­eas too: The re­duc­tion de­cided by Par­lia­ment will only con­cern next year, and not 2020, which means that by law the ENFIA due in 2020 will be the same as this year, with­out next year’s dis­count. The gov­ern­ment may have promised a fur­ther re­duc­tion to ENFIA for 2020, but it has not yet pre­pared a clause to that ef­fect, as it has done with the re­duc­tion of the cor­po­rate tax, which will be re­duced by one per­cent­age point ev­ery year from 2019 to 2022. The fact that the gov­ern­ment has stopped short of act­ing in this di­rec­tion for the years af­ter 2019 gen­er­ates a num­ber of ques­tions, in­clud­ing whether this is a prom­ise to prop­erty own­ers that has not been green-lighted by the coun­try’s cred­i­tors.

No­tably, 2020 is sup­posed to see the full align­ment of the ob­jec­tive val­ues used for tax pur­poses with mar­ket rates, so many own­ers could be in for a nasty sur­prise.

The gov­ern­ment may have promised a fur­ther re­duc­tion to ENFIA for 2020, but it has not pre­pared a clause to that ef­fect, as it has done with the re­duc­tion of the cor­po­rate tax.

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