Farmers vs. Homeowners On Property Tax

farming_350_2611Just a day after Greek Prime Minister Antonis Samaras, the New Democracy Conservative leader and his coalition partner and Deputy Premier, PASOK chief Evangelos Venizelos said they would make changes to an onerous property tax bill that was causing an alleged rebellion among their lawmakers, the government decided to push it through anyway – only to reverse position again.

The news that there would at first be no fixing of the bill prompted the major opposition party Coalition of the Radical Left (SYRIZA) to say the objections from as many as 70 lawmakers from the two ruling parties was a “fake” staged publicity stunt and that they would vote for it anyway but wanted to give the appearance they were really against continuing a heavy tax.

The government, which said it would stop a temporary 100 percent property tax surcharge that Venizelos imposed when he was finance minister in a previous PASOK government, reneged on the promise and said it had no choice but to continue it because of demands from international lenders, the same rationale it uses every time it objects to more austerity measures but then bends to them.

What’s supposedly wrangling the lawmakers is that the tax will be rolled into the regular property tax and made permanent and will put new burdens on farmers. Finance Minister Yannis Stournaras first said unless they could find a way to replace the revenues that would be lost by easing the tax on farmers then they should shut up.

He gave them until Nov. 4, when envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) may return to propose an alternative revenue-raising or cost-cutting plan or to sit down and vote for it.

Within hours, he changed his mind and told reporters that his ministry would make “the necessary improvements” to the bill while sticking to the revenue targets pledged to Greece’s foreign creditors. He said he hoped the revised bill would be finished by the end of next week.

As for reports suggesting that the troika had postponed its visit, Stournaras denied it. “They’ve asked to meet me on Tuesday. What else can I tell you?” he said. That continued a week of flip-flopping and changing positions by the government.

Greece must raise 3.5 billion euros ($4.74 billion) from property tax next year, according to the draft budget. Under the current plan, 2.2 billion euros ($2.98 billion) would come from taxing urban properties and the rest from levies on farmers.

A senior ministry official said there were only two ways of reducing the burden on farmers: change the brackets for farmland taxes, reducing the levy for those with smaller plots but keeping the overall revenue target; the other is to reduce the overall target for revenues from farmers and shift it to the target for revenues from urban properties.

The prospect of more taxes on city properties prompted an angry response from homeowners but also associations representing lawyers, notaries and other professionals who say that farmers are under-taxed.

The ministry has insisted that the new unified property tax must be approved to replace the current tax on property, which was introduced as an emergency measure in 2011, and levied via electricity bills, before being extended. Under that, homeowners can have their power turned off for not paying property taxes although the two aren’t related tariffs.

Commenting on the response by government MPs to the draft property bill, the spokesman for leftist opposition SYRIZA, Panos Skourletis, described it as “fake.” “Let’s see what they do when they come to Parliament,” he said.