Temporary Greek Property Tax Surcharge May be Permanent

ATHENS – Of all the new slew of taxes imposed on Greeks to help the country from going bankrupt, perhaps the most hated – the so-called “haratsi,” or Turkish tax, a second property tax, that is being put into electric bills – will be imposed again next year although it was supposed to have been just for this year, interim Prime Minister Lucas Papademos has confirmed. Papademos, a former European Central Bank Vice-President who is heading a temporary government whose time in office is uncertain, said he wants the tax applied fairly but that it’s here to stay for now.
The tax is aimed at raising $2 billion, a pittance against the country’s $460 billion debt, and until the government changed its mind, could have resulted in people having their power cut off, wages garnished or properties seized for non-payment. Under pressure, Finance Minister Evangelos Venizelos, who imposed the tax along with new levies on the poor, said there would be a review to determine whether vulnerable groups, such as the poor and disabled, would be exempt, and to examine whether some bills that consumers said were arbitrary and wildly over-inflated could be reduced. The government, however, is planning to sharply reduce benefits to the disabled, the head of a group representing them said.
Papademos told Parliament that, “One of my main intentions when I took over as prime minister was to look for ways so that the application of this measure would not burden those most in need,” said Papademos. “I did not want to announce these intentions. I would like the government to speak through its actions rather than its promises.” According to a Finance Ministry circular, those who are more than 80 percent disabled will be taxed at a lower rate. Also, the Public Power Corporation (PPC) will not cut the power supply of property owners who do not pay the levy in cases where the taxpayers have serious health problems. The same will apply to those who do not have any form of income or other assets apart from the property in question.
Responding to a question from Communist Party leader Aleka Papariga, Papademos revealed that the property tax, would not be withdrawn at the end of the year but that efforts were being made to find a fairer way of levying it. “It is not possible for this measure to be withdrawn,” he said. “It was deemed absolutely necessary to ensure that public finances did not deviate from the targets that have been set.” The prime minister suggested that next year the tax, which ranges between 67 cents to $267.78 per square meter, would not be levied through electricity bills and would not be demanded as a lump sum but in 12 months installments.
The Council of State, Greece’s highest administrative court has begun hearing a series of appeals by groups and individuals claiming that the property tax is unconstitutional, as has already been indicated by some European Union officials. It is one of a barrage of new taxes, along with pay cuts, slashed pensions, and scores of thousands of layoffs being demanded by the Troika of international lenders from the EU-International Monetary Fund-European Central Bank providing Greece with a $152 billion bailout and planning a second of $175 billion to keep the technically bankrupt country from officially going under and defaulting on its debts.