POMIDA TO THE MINISTER OF FINANCE AND THE MINISTER: PROPOSAL TO RESTORATE THE DEDUCTION OF INSURABLE BUILDINGS FROM TAXABLE INCOME!

This is why POMIDA, in a letter to the Ministers of Finance and Development, puts on the table the restoration of the deduction of building insurance premiums from taxable income, which abolished years ago by the Troika, in order to once again create a strong incentive to insure them in the private sector.

The text of the letter is as follows:

To the Minister of Finance Mr. Christos Staikouras

The Minister of Development Mr. Adoni Georgiadis

The Deputy Minister of Finance Mr. Apostolos Vesyropoulos

COMM.: To the President of the Association of Insurance Companies of Greece, Mr. Alexandros Sarrigeorgiou

In this 23.5 .2021

SUBJECT: Proposal to restore the deduction of building insurance premiums from taxable income.

Dear Mr. Ministers

The new tragedy of the fire in Schino, Attica once again urgently brings to the fore the need to insure private buildings against the risks that threaten them.

The state budget is burdened with huge sums every year to cover the damages from all kinds of natural disasters. In addition, the part of the damages covered by the state aid never corresponds to the real costs of their full restoration, while the bureaucracy involved often forces the beneficiaries to forgo it altogether.

“The only possible solution to the problem, especially at a time when nature itself and climate change are constantly sending us warning messages (bad weather “Medea” and “Ianos”, deadly flood in Mandra, cyclone Halkidiki and also seismic activity in across the country etc), isto encourage building owners to take out private insurance en masse.

To do this, absolutely a necessary incentive is, in the planned reform of income tax to restore the deduction of building insurance premiums from the annual taxable income! This arrangement will relieve the State of significant and unforeseen burdens, and not only will not deprive of revenue from the budget but on the contrary it will increase them, for the following reasons:

1. The minimum insurability of Greek homes will essentially increase from 17% of the total which is today, where unfortunately the vast majority of insured people do so out of their contractual obligation as borrowers, and without being aware of whether they are properly insured.
2. The State will collect a 15% tax on all insurance premiums paid .
3. Fire Branch insurance policies have positive profitability. Therefore, the State will also collect a significant income tax on the profits of the insurance companies.
4. The increase in profitability will bring new investments in assets and a vibrant workforce in the insurance industry, which will increase employment.

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5. The amounts of insurance compensations for the restoration of buildings are not statically saved but “fall” directly on the market and are distributed to society as a whole.
6. In total, according to ELSTAT, there are 6,371,901 residences in our country out of of which only 1,074,053 are insured (EAEEE data at the end of 2017). If 200,000 new homes are insured with an average annual premium of €155, the revenue for the state budget will approach €10 million only from insurance premium tax and tax on the profits of insurance companies, without calculating the additional benefits for the economy, the market and society in general.
7. The reinstatement of this exemption will activate the insurance consciousness of the Greek, showing him the path of his personal responsibility towards the protection of his assets, and not the path of pressure towards the government to allocate tax revenue for the restoration of the respective losses, burdening the taxpayers.

At your disposal for any clarification and cooperation

At your disposal for any clarification and cooperation