Buying a house gets harder

Greece ranks 13th among the 38 countries in the Organization for Economic Cooperation and Development (OECD) in terms of housing taxation, as 7% of tax revenues come from property, 2020 data has shown.

This rate has been reduced by 1-1.5 points after the new cuts in the Single Property Tax (ENFIA) applying from this year. The OECD country average is 6%.

The report also shows that the Greeks lead the OECD in home ownership at a rate of 72%, while 80% of their assets are in realty.

Property taxes typically represent a small source of revenue for OECD countries. Recurring property taxes are the most important source of property tax revenue in the majority of OECD countries and, on average, account for 62% of countries’ total property tax revenue. However, these revenues are mainly attributed to local government.

The report also shows that housing tax revenue is not keeping pace with increases in house prices. The steady rise in real estate values ​​over the past decades should have been accompanied by a corresponding increase in property tax revenue. However, property taxes are often levied on significantly outdated and undervalued property values ​​that do not reflect real price trends.

In recent years, the increase in housing prices has made the purchase of real estate unaffordable, especially for young people. Real property prices, after subtracting inflation, rose in Greece by around 10% in the first two years of the pandemic (from the fourth quarter of 2019 to the third quarter of 2021) compared to an average of 13% in OECD countries.

The purchase of a 100-square meter home in 2020 corresponded to approximately 13 years of income for an average Greek household compared to approximately 11.7 years in 2000. In fact, Greece is in the sixth highest position in this category in the OECD.

The percentage of Greeks up to 34 years who own their own home, without having inherited or received a property with a parental allowance, is only 13%, one of the OECD’s lowest.