Tax trap for property owners

The Single Property Tax (ENFIA) may obtain new calculation rates that offset the effect of the new taxable property prices (the “objective values”), but the maintenance of the same rates for the establishment of taxpayers’ actual earnings through their property assets will lead to higher income tax for thousands of people.

The upward shift of objective values as of January 2022 will therefore have a direct impact on the taxable value of taxpayers’ assets used to establish their real incomes, known in Greek as “tekmiria,” thereby raising their tax dues in many cases for this year onward.

For instance, in areas where objective property values have climbed above the rate of 2,800 euros per square meter, the tekmiria based on the residences used for the determination of people’s taxable incomes will grow by 40%. In areas where objective values have grown above the rate of €5,000/sq.m., the houses’ tekmiria will expand 21.43%.

Such cases are the 3rd district of the City of Athens (including Petralona, Metaxourgeio, Thiseio etc) where zone rate rise from €2,300/sq.m. to €3,200/sq.m., as well as the 1st district of Thessaloniki, and areas in Piraeus and Palaio Faliro in Attica. On Santorini and Mykonos, where objective values have soared above €5,000/sq.m., property owners will likely face a significant income tax hike too.

The tax administration regularly compares the taxable assets of taxpayers to their declared income to establish whether the incomes justify the maintenance or acquisition of the properties. If someone’s tekmiria are too high for their declared income, there is a separate set of rates imposed on the income estimate, taxed according to the salaried labor taxation or the rates from business activity. That also leads to the payment of the solidarity levy.

Last year as many as 2,032,887 taxpayers fell into the tekmiria trap, and were assessed to have an extra income of €6.35 billion, with their income tax dues rising accordingly.