Foreclosures at actual property market rates to start in a month

Apartments, plots of land, stores and office buildings belonging to people or businesses with debts to the tax authorities will soon be auctioned at prices below those used for tax purposes (“objective values”) as the law dictates foreclosure sales at market rates instead of objective values, as in the case of debts to banks.

Finance Ministry sources say everything will be in place for property auctions at market prices to begin by the end of November and that Minister Euclid Tsakalotos and Independent Authority for Public Revenue chief Giorgos Pitsilis will issue a joint decision in the next few days on how to determine the price of properties to be auctioned off for debts to the state, below the objective values.

Tax officials say that foreclosures will begin on properties of 2,000 debtors who owe the tax authorities more than 50,000 euros each.

The tax authorities also intend to clear out the stock of confiscated properties, which will go under the hammer on the new online platform from December. Based on the latest available data, there are 4 million debtors with debts to the state, and assets have already been confiscated from 900,000 of them. The tax administration says it is ready to expand those forced measures to another 1.6 million debtors.

While the government has to date been unable to determine the market rates of properties, it will employ surveyors to calculate the values of the assets to be auctioned. Some 10 days ago Deputy Finance Minister Katerina Papanatsiou admitted the inability of the state, notaries, estate agents and the Bank of Greece to establish the going rates given the fact that hardly any sales are taking place at the moment.

The ministry has put off the creation of an automatic system for the harmonization of the objective values with market prices as its agencies have been unable to identify the going rates, with most sales conducted far below the assets’ value due to the fact that they are only taking place because the owners are in desparate need of cash to make other payments.

It is noted that most taxes related to property are calculated on the basis of the objectives values, which are on average some 40 percent above the market rates. These include the Single Property Tax (ENFIA), the Supplementary Property Tax (for large properties), the transfer tax, the parental concession tax etc.