Property tax to change and affect owners of foreign-based assets

Alternate Finance Minister Tryfon Alexiadis announced on Wednesday that the government will change the Single Property Tax (ENFIA) next year and begin to tax properties that Greeks own abroad.

Addressing the Prodexpo conference in Athens, Alexiadis said the government is examining an Italian law, introduced by former prime minister Mario Monti, whereby Italians with properties in other countries had to pay the difference between the tax they paid to the state where the property was located and that charged by the tax authorities at home.

He added that it is unfair for the owner of a property in Greece with a market value of 50,000 euros to pay the ENFIA tax while the Greek owner of a house worth 5 million euros in London pays nothing to Greece. The Finance Ministry has already received two lists from the British tax authorities of Greeks’ properties in London, Alexiadis noted.

Kathimerini understands that the new tax the government intends to charge owners of properties abroad will be entirely different to the existing ENFIA tax. The ministry will in effect impose a tax on Greeks with foreign-based assets, which for now will not concern securities etc. If the property tax in the country in which the asset is located is the same as that charged by Greek authorities, perhaps the owners will not be charged extra.

On ENFIA, Alexiadis said the new way the property tax will be structured has not yet been determined, but will be more proportionate and fairer, as the government believes that the ENFIA tax has run its course. The changes will take into account the adjustment of the so-called objective values, i.e. property rates used for tax purposes, expected to be completed by September 2016. The ministry will create a system that automatic adjusts the property rates so that they are closer to the (far lower) market prices.

The government also intends to introduce a tax-free threshold of 50,000 euros in the new ENFIA, aimed at exempting the owners of small properties. If that is indeed the tax-free threshold, more than two-fifths, or 41.7 percent, of owners will pay no property tax as their assets do not exceed 50,000 euros, according to the present objective values.