The Haratsi Is Here To Stay

ppcbill_390_1311-300x1861A special property tax levy that doubled the amount due, and which was put into electricity bills in 2011 – for what was supposed to be a one-year only payment – will be rolled into a single package with the primary bill and continued and is likely to be increased again, putting a heavier burden on Greeks already buried under three years of unrelenting austerity measures.

The so-called “haratsi,” a scornful tag from taxes during the Ottoman Occupation, was introduced in 2011 by then finance minister Evangelos Venizelos, the PASOK Socialist leader who jumped at the chance to become Deputy Prime Minister and Foreign Minister with his party fading fast in the polls. He joined Prime Minister and New Democracy leader Antonis Samaras’ coalition government to give it a majority in Parliament.

When the haratsi was put into property tax bills it came with a condition that it must be paid or homeowners would have their power turned off. The new unified tax means that homeowners in areas with official valuations of more than 2,000 euros ($2,600) per square meter will pay higher taxes in 2014, but those in less expensive areas will have their burden lightened, according to the latest rates approved by the Troika, but that all rates will be increased if the country fails to meet its fiscal targets demanded by international lenders, as it almost always has.

As it is also moving to let banks foreclose on homes if people can’t afford to pay their mortgage, the government said it’s also considering confiscating properties of people who can’t pay the state.

The Finance Ministry’s planned single property tax will be calculated on the basis of 33 zone rates which will be scaled from 2 euros/sq.m. for properties in areas with valuations up to 500 euros/sq.m. to 23.10 euros/sq.m. in areas where valuations exceed 8,500 euros/sq.m.The final amount to be paid will result from a multiplication of the respective valuation rate by the area of the property by its age coefficient.

The total to be paid by property owners in 2014 has been set at 4.15 billion euros, some $5.5 billion. Even in areas with valuations below 2,000 euros/sq.m. owners will have to pay more if their assets include undeveloped land or farm plots, as these are being taxed for the first time. The respective land rate is seen ranging between 10 and 600 euros per hectare, which is about 2.47 acres.

Everyone will have to pay as there will be no threshold for exemption from the tax but the long-term unemployed and those earning incomes below the poverty line will not be liable to pay. The changes will be included in a draft bill to be prepared by the beginning of September and which will be subject to negotiation with the Troika which has already said it wants the tax kept.

Besides the single property tax that will integrate all existing dues – such as the emergency property tax collected via electricity bills and the Real Estate Tax – which will come into force next year, the bill will also provide for the abolition of the property transfer tax. Changes in existing provisions regarding inheritance taxes and parental transfers cannot be ruled out and are likely targets of the state to get into taxpayers’ pockets again.

Despite all those higher property taxes, that come along with big pay cuts and slashed pensions and with record unemployment and many banks pushing for customers to pay their bills in full without restructuring loans and mortgages, the government is also reportedly going ahead with a plan to let even primary homes be foreclosed upon and seized if people can’t afford to pay.

The taxation base is being extended to commercial, industrial and farm properties, which will shoulder an estimated 25-30 percent of the total burden and which farmers said will hurt the country’s agricultural base, one of its most important export-drivers.

As a large number of properties built in the past have not been declared to the inland revenue department, the Finance Ministry plans to use the records of the Public Power Corporation (PPC) to identify their owners. Sanctions for nonpayment will include confiscation of properties. The new tax is set to run for three years and then revised.


  • Deep_Sea_Diver

    Three weeks ago, I read, that properties valued at less than 200,000 would be exempt from this haratsi tax, but now “Everyone will have to pay as there will be no threshold for exemption from the tax”.
    “will be increased if the country fails to meet its fiscal targets demanded by international lenders, as it almost always has”.
    “even primary homes be foreclosed upon and seized”.
    Why, once again do the suffering people of Greece have to pay for it’s government’s incompetence by NOT meeting the targets that they agreed.

    Are you all sure that the troika are not trying to force Greece out of the Euro? Just how much more misery can any nation take, especially the proud Greeks, which seem to be sleeping, at the moment anyway.

  • ibid

    Force Greece out of the euro? They want to keep her in until she has no sovereignty left and then they can absorb her into the European superstate. You mention a Greek exit like it’s a bad thing. On the contrary a Greek exit is the only hope for the country surviving as an independent state.

  • Deep_Sea_Diver

    “On the contrary a Greek exit is the only hope for the country surviving as an independent state”.

    I agree wholeheartedly & have said this right from the beginning of this sad mess the Greek politicians have caused. The thing that REALLY puzzles me, is, the two parties that have caused ALL this grief, are still in charge, it’s crazy

  • Tony Belluci

    The whole developed world has property taxes. Even with this new tax planned on property in Greece the rate of taxation is still relatively fair. I know they are in crisis but it is a necessary tax. Here is Canada in the more larger cities and wealthier provinces the tax on a home works out to be 8-10% of the assessed value by the local government. The true market value of your home is typically more but at average home prices of nearly $500,000 plusthat is killer here even in relation to household disposable income. So the tax in Greece is still small amd just and is a good way for government to improve tax revenues. But being Greece if only the can manage to collect.

  • Alithia

    Hilarious! Did anyone expect otherwise?

    For the last decade, I’m no tax economist but I KNEW that the only way they are going to collect a lot of taxes from Greeks is to go after assets. You can’t hide houses and land, So if you own it or want a roof over your head, you got to pay.

    So here we are. I just wished that I took my own advice and got rid of everything except my main house.

  • Alithia

    Don’t confuse taxes put on homes in US and Canada with what Greece is doing. There, it’s to pay for local services and schools. In Greece, it’s for general revenues AND the cities/town put another direct services tax on top. The services tax is not as big because it does not contain any education tax on it.

    If you own a home in US/Canada, you will find that the vast majority of it is for school taxes.

  • Alex

    fyi – alleged “Greek” Tonto references the Skopians as “Macedonians” (aka he’s another false flag trolling us).

    New handle “Deep_Sea_Diver” mods him up

  • Alex

    And who do you propose Greek vote for them? Communist Syriza perhaps?

  • ibid

    Disgracefu! The selling of something so special to the highest bidder. Money, money, money. That’s all they care about.

  • Alex

    Many Greek leftists in a nutshell.

    They rant about not enough services… then complain when we have raise taxes to pay for the services we currently have.

    They rant about government corruption… then many cheat on their taxes.

    They rant about rising violent crime….they apologize for masses of illegals that are responsible for much of that violent crime,

    They rant about “fascism”… then largely turn a blind eye to fascists in FYROM

    They rant about business…. then wonder why our economy is going down the tubes

    Its almost like they are trying to commit suicide. The positions they hold run contrary to reason.

    One thing you can trust a leftist to be consistent on…. blame everyone else but themselves for their own economic problems. Bankers, troika, Germans, EU, elite, government, Illuminati, “society”, space aliens… its always someone else’s fault. Never their own.

    According to leftist ideology they seemingly play no role whatsoever in their circumstances. The blame for their lives is always on the backs of someone else.