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Miscellaneous See other Miscellaneous Articles Title: Greek new property tax ratified by legislators, receives mixed reviews by taxpayers ATHENS, Dec. 22 (Xinhua) -- A much anticipated unified tax law on property in Greece promoted as part of marathon efforts to address the three-year debt crisis, was ratified by Greek lawmakers this weekend. With a razor thin majority of 152 votes in favor, the draft passed the 300-member strong parliament, opening the way for the more balanced and fair taxation of all Greeks starting from the new year, according to the government. However, the new law which replaces a series of previous taxes on real estate and aims to expand the tax base and raise some 2.5 billion euros (3.4 billion U.S. dollars) in 2014, received mixed reviews by Greek taxpayers, depending on whether they are amongst "winners" or "losers", with the majority considering themselves among the latter. According to a statement released by the Finance Ministry the main idea behind the new tax is to have more people making a small contribution so that eventually all Greeks will win from the reform of the taxation system, which is also for years one of the key demands for changes by international creditors who support the debt-laden country with bailout loans. According to the government, the new tax is by an average 16 percent reduced compared to the previous main real estate tax, while it applies to more taxpayers. The new property tax unifies the regular property taxes and the "emergency property tax" imposed in 2011 originally for two years only to owners of property with electricity connection as part of efforts to raise revenues to fill fiscal gaps. The new tax is imposed to all properties, regardless of whether they have power connection or bring any profit, including farm plots and agricultural buildings for first time. Real estate properties are taxed starting from the first square meter and the first euro in commercial value with criteria such as age, floor or whether they are within city zoning plans. For buildings, including apartments, offices, stores, the basic tax ranges from 2-17 euros per square meters. For land plots, the tax ranges from 1-3 euros per acre and accountable for taxation are also barns and chicken coops. Owners of properties worth in total more than 300,000 euros will be paying an extra tax, while there are 50- 100 percent exemptions for socially vulnerable groups, such as unemployed, people with disabilities and families with low income. For critics of the law, including opposition parties and analysts, given the fact that eight out of 10 Greeks own real property, the reform adds more tax burden on the average Greek taxpayer who is suffering after six years of recession and three years of tough austerity which have trimmed his income by one third. With the add of plots not included in residential areas which bring no profit and farmland, the total worth of assets of each taxpayer is increasing and therefore from 2014 will be paying more in overall taxes, analysts noted in financial newspapers which printed lists of such examples. In a characteristic comparative example published in "Eleftheros Typos" (Free Press) daily, the owner of a 50-square-meter apartment in central Athens built in 1993 in a zone with official valuations of 1,000 euros per square meter will pay 215 euros down from 233 euros in tax. He will be among the "winners" of the reform, unless he owns plots which were tax exempt until today in his village. The owner of a 250-square-meter villa on Mykonos island built in 2003 in a zone with official valuation of 3,700 euros per square meter who was paying 2,932 euros only for the part of the plot which has power supply, will now pay 3,363 euros for the building and an extra sum for the plot. Real estate agents warn that increasing taxes on property could further damage a sector which has been hit hard during the three-year debt crisis. Prices have declined by 32 percent during the crisis due to low demand amidst recession, the Central Bank of Greece estimated in its last annual report published a few days ago. In the first wave of protests ahead of the vote, the protagonists outside the parliament were farmers who until today were taxed only on their income. They denounced the tax as an unbearable burden which will be destructive for the sector. Inside the parliament, the objections of a group of deputies of the ruling coalition culminated in the expulsion from the conservative party's parliamentary group of a deputy who voted against the bill in a development which left the government with 153 seats in the 300-member strong assembly. (1 euro = 1.36 U.S. dollars) Post Comment Private Reply Ignore Thread
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