Ownership tax on all real estate and no tax-free limit

 

If the measure ultimately gets applied in the form it was presented at the bipartisan committee, it will provide for a new property tax that will replace all existing real estate taxes and will be enforced from 2013 without a tax-free limit and from the first euro of the objective value and the first square of the surface.

 

The new tax will include all owners and property, integrate the special charge on property through the PPC with FAP and its goal will be to generate revenue of up to 3 billion euros.

 

All property owners will pay at least 1 to 1.5 billion euros whether their property falls within or outside urban planning, and land owners and companies about half a billion each.

 

The new tax will be imposed on all properties, homes, shops, offices and buildings, and for the first time on land parcels too. Government officials who were present at yesterday’s meeting at the Finance ministry are considering two scenarios regarding this tax:

 

-       the main scenario does not provide a tax-free limit but meets strong opposition from political parties. It provides that for property value of 0 -100,000 euros the tax rate will be 1/1000, for a value of 100,000 to 300,000 euros the rate will be 2/1000 and for higher values there will be larger rates

-       in the second scenario, the first 100,000 euros of the property’s value will remain tax-free, for a value of 100,000 to 200,000 euros the rate will be 1/1000, for 200,000-300,000 it will be 2/1000 and for larger value even higher

 

In order to tax land parcels, owners will be asked to resubmit a tax statement in early 2013. But a question still remains as to who will declare them and how, since the State has no safe ways to crosscheck earlier statements via the Land Registry.

 

A lot of weight will be lifted for businesses as they are looking at a FAP rate increase of 6/1000 for commercial use, and 1/1000 for personal use. The expected benefits are estimated at 500 million euros.

 

Officials point out that the target of 3 billion euros will be covered with difficulty, since the vast majority of the property has a low objective value. According to KEPYO data, 74% of all properties have an objective value of up to 100,000 euros, 16% up to 200,000 and only 10% of the properties are over 200,000 euros.