Greek government’s inability to reach fiscal goals set by the EU and the IMF led Mr. Venizelos to prescribe, once more, a fast relief painkiller for a country that is currently in the intensive care unit and urgently needs a long term cure. The new property tax is alive and kicking after the Greek parliament passed the relevant legislation last night and the Greek Dream of ownership for crisis hit-Greeks has turned into a nightmare of property taxes growing out of control.
But amid Mr Venizelos’continous tax delirium- before we even recover from the property tax shock yesterday he anounced that from now on we will need to collect more receipts we will be taxed even more-most of us haven’t really understood how much Mr. Venizelos’ outragious taxation-some would call it daylight robbery- is going to cost us. So here are ten burning questions for all (poor) property owners in a country that has clearly moved from being a state of law to a state of pure insanity: Greece.
1. Who will pay?
Everyone. The tax is aimed at ALL property owners and will be imposed through the electricity bill. It doesn’t matter if you live in Greece, America or Zimbabwe for that matter, you still have to pay tax. In the case of joint ownership, the tax is split equally among the owners. If you are a renter and not an owner, you can hold back the amount paid for the property tax from the rent (good luck with that).
2. Will I have to pay for the country house as well?
Oh, yes. All built properties that receive electricity, including “the house at the village” the majority of Greeks have inherited from their parents and grandparents and visit once a year will be subjected to the new tax. Only communal areas of apartment buildings or community buildings like embasies and cemeteries are exempted (till now that is, but with Venizelos’ tax addiction you never know).
3. How much will I have to pay?
The amount you will pay depends on your property’s price zone as well as its surface area. Properties older than 26 years are free of any additional burden, while new properties can pay up to 25 percent more. For example, someone who owns a newly constructed home of 80 square meters in the Athenian suburb of Chalandri, where the maximum price per square meter in that zone is 1,900 euros, will pay 600 euros in property tax (80 sq.m. x 6 euros x 1.25).
4. Will I be able to pay in installments?
For 2011 you will pay the tax together with the electricity bill in two equal installments from October 2011 to January 2012. For 2012- since you will probably have no money left- there is a provision you will pay in four equal installments from May until December 2012. Should you wish to increase the number of installments you can apply to DEI or other electricity providers and see if they will accept such a request.
5. What if I don’t pay?
Public Power Corporation (DEI) or other electricity providers will stop the supply until you actually pay the bill. And even if you’ve decided you don’t really need electricity and prefer alternative ways for heating such as burning woods, DEI will scratch you right off its list of customers and inform the state, which will then take further measures to collect the tax! And do not bother of going to DEI and stand in the line in order to cut off electricity as the new tax applies for all property owners who cut off the electricity supply after the 17th of September! Switching to another electricity provider also won’t help much as the law clearly provisions you are not allowed to change suppliers until you actually pay the tax!
6. Is anyone exempted from this tax?
In an act of humanitarian solidarity Mr. Venizelos decided that those who have been jobless for more than a year and do NOT receive the extraordinary Greek unemployment benefit of four hundred euros, will be exempt. However, unemployed people who have an annual income of 12,000 euros are considered pretty well off and thus have to pay!
But Mr. Venizelos compassion doesn’t stop here. Families with three children and more, as well as disabled people (!) will have a discount and pay a rate of 0.50 euros per square meters IF that is they have an annual family income of fewer than 30,000 euros. If not, they will be taxed as everyone else! All three exemptions do not apply if the property in question is worth more than than the astronomical amount of 150,000 Euros (!) or if the property is in an expensive zone priced at above 3,000 euros per sq.m.
7. My property is located in an area where no official value has been set. How am I going to be taxed?
Don’t worry. The legilslator has provisioned a solution for you. It’s pretty simple: The area of your property will be multiplied by three, i.e. a 100 square meter property will be taxed 300 euros!
8. For how many years will homeowners be obliged to pay this property tax?
There is a Greek saying ¨Ουδέν μονιμότερον του προσωρινού” (nothing is more permanent than the temporary) that pretty much describes the Greek tax landscape for the past 35 years. While the bill mentions that the tax will be levied via the electricity bill only for 2011 and 2012, it is being proposed that from 2013 and on it will replace the present main property tax!
9. Will shops and other business properties be taxed?
Yes. Only properties used exclusively for agriculture, livestock farming, industrial production and manufacturing will be exempted. Greek hotel owners are planning a legal challenge against the new tax as the bill does not take into account that most Greek hotels are closed in the winter season and those that are actually open, like those in the historical center of Athens, are basically out of work due to crime.
10. What about the Church? Are they going to pay?
The Church will pay tax but only for the property used for commercial purposes (which is pretty small). For once again the Church, one of Greece’s biggest tax dodgers is not being forced to pay tax on its real property worth up to 700 billion Euros despite the fact that Greek state pays the salaries and pensions of all Greek Orthodox clerics.