Property Tax Divides Greek Government, Confuses Creditors



enfiaA conflict within the Greek government was generated over the potential continuation of the single property tax (ENFIA). According to the creditors, the continuation of the ENFIA tax is included in the list of proposed reforms, while the government spokesperson flatly denies it.

Government spokesman Gavriil Sakellaridis stated on Monday evening on Greek television that the ENFIA tax is “unfair” and will be abolished, so it will not be collected in 2015. It will be replaced by a large property tax, he said. Sakellaridis also denied that there was a conflict within the Greek negotiating team and particularly between Finance Ministry advisor Elena Panaritis and head of Council of Economic Advisors (SOE) Giorgos Chouliarakis. Both parties have denied allegations of conflict between them.

Sakellaridis’ statements came after an alleged leak from the Finance Ministry that the collection of ENFIA tax in 2015 is included in the list of reforms presented to the Brussels Group, the group of lenders’ representatives who evaluate the proposed reforms. They claim that revenues from ENFIA are calculated in the 2015 budget.

Prime Minister Alexis Tsipras has repeatedly stated that ENFIA will be abolished and will be replaced by a new tax for large properties. There is no mention of ENFIA or a new property tax in the Finance Ministry leaks, according to the government spokesperson.

Deputy Finance Minister Dimitris Mardas in statements to Greek television said the implementation of the law that will replace the sigle property tax is postponed for a while. “Another solution is being sought,” Mardas said, adding that this solution will be beneficial to low income households.

However, Finance Ministry officials say that it is impossible to implement a new property tax within 2015. Analysts say it might be necessary to collect the ENFIA tax for another year in order to balance this year’s budget.