Reduced property tax for 1.5 mln owners

It is extremely likely that around 200,000 to 250,000 property owners who saw a large reduction in their income last year will pay a 50% reduced Single Property Tax (ENFIA) this year, while many will be completely exempted, according to an amendment submitted to Parliament by the Finance Ministry.

This means that the total number of owners who will pay 50% less ENFIA will rise to 1.5 million from more than 1.2 million already paying a discounted amount.

The categories of taxpayers who have seen their incomes slashed last year include private business owners, private sector workers who have had their contracts suspended and the unemployed. These reductions also mean they now meet the income criteria set out in the ENFIA exemption legislation.

Beneficiaries of the amendment, as well as the country’s overall 6.3 million property owners, will find out how much tax they will be required to pay in mid-September. 

According to data on ENFIA liquidations for 2020, a total of 1,220,476 individuals were exempted from 50% or even from the total ENFIA that corresponded to their real estate assets.

Under the new legislation, a 50% reduction or full write-off of ENFIA presupposes that the total taxable family income of the previous tax year does not exceed 9,000 euros. This threshold increases by 1,000 euros for a spouse and each dependent member. Total taxable family income is considered to be the sum of the total taxable income of the spouse and dependent children.

The total taxable family income and the number of dependent children are obtained from the income tax declarations of the relevant year. If the spouses file a separate declaration, the largest number of children declared in one of the two declarations is taken.

A complete exemption from ENFIA is granted to families that have three or more children or people who are disabled to at least a degree of 80%. In these cases, the total annual net family income of the preceding year must not exceed 12,000 euros, plus 1,000 euro for the spouse and each dependent member.

What’s more, the total area of the property – of which the person liable to submit an income tax return, the spouse and the dependent children have full or partial ownership or usage rights – must not exceed 150 square meters.