The main negative elements of the new regulation for taxpayers are:
The imposition of a new type of “supplementary tax” per property, of unknown amount and escalation, on properties worth more than 400 thousand euros, instead of its complete and final abolition in any form, as POMIDA has persistently requested.
The non-existence of a “cutter” in the fee increases for taxpayers with real estate in areas where significant increases in pre-applied objective values were imposed.
The retention of the additional tax for legal entities.
The non-existence of a deduction for those taxpayers pay the tax by the deadline of the first installment, as is the case for income tax.
In general, it seems that a serious attempt was made to rationalize an “indigestible” tax incompatible with the Greek reality. But the final and real conclusion for the new ENFIA, the moment of truth for each individual taxpayer, will be the time and only when his tax return is opened…”
Position of the Minister of Finance Mr. Christos Staikouras on the real estate taxation reform
The Government of New Democracy has set, from the beginning of her term, as one of her main priorities, the reduction of taxes and social security contributions.
Her Financial Staff, this priority , despite the adverse conditions, he consistently specializes and implements it.
Today, he takes another decisive step, regarding ENFIA.
<p style "text-align: justify?" reduction is made in the context of a comprehensive reform in real estate taxation.
A reform that drastically changes the structure of the tax, as:
- objective values are readjusted, most of which were increasing,
- new areas are added,
- zones of objective property value determination are expanded,
- the coefficients for determining the basic tax are significantly reduced and
- the supplementary tax is integrated into the basic tax.
This reform, according to our estimates, achieves 4 main objectives:
1th Goal: The Government exceeds the pre-election commitment to reduce the ENFIA, for natural persons, by 30%.
Within 2.5 years, under the current government of New Democracy, the total reduction of the ENFIA amounts to 34% in relation to 2018.
That is, natural persons will pay, starting this year, a total of 920 million euros less from 2018!
The total assessed real estate tax, from 2022, in a permanent way, without the zone extensions whose elements we expect to be integrated, is further reduced by 13% compared to 2021, i.e. reduced by 860 million euros compared to 2018.
In particular, from 2022, the total amount of justification is estimated to be 2.23 billion euros, reduced by 350 million euros compared to 2021.
It is recalled that the Budget included a provision for reducing the certified debt by 70 million euros.
Added finally another €280 million!
So, we achieved much more relief for households, especially the middle class class, in relation to both the Budget and the pre-election commitments.
2Objective: The tax is reduced for the vast majority of citizens.
Specifically, 8 out of 10 citizens, the80% of natural persons who will pay property tax in 2022, i.e. approximately 5 million taxpayers will see, starting this year and permanently, an even greater reduction in ENFIA.
The 14% will pay the same tax as last year.
And all this is achieved despite a significant increase in starting prices in the majority of objective determination zones, leading to an increase in the value of these properties.
Small number of property owners, about 6 % of the total will see an increase in ENFIA.
For about half of these owners, the annual increase will not exceed 50 euros.
And this increase is due to the significant increase in the value of their properties.
Indeed, in most of these – few – cases, the value of the property increases by more than 50% and in some it is doubled based on the new objective values, taking into account the inclusion of new zones.
3th > Goal: With our interventions, social justice and cohesion are strengthened.
Specifically:
- The 30%tax deduction that applies – today – for real estate up to 000 eurosis extended /em>, at 100,000 euros, now covering 65% of taxpayers, against 54% until before.
That is, for 733,000 natural persons, mainly the lowest and middle incomes, the percentage of the deduction increases.
- Increases, from 20%to 25%, the tax deduction for taxpayers with a property value of 001 up to 150,000 euros.
That is, at least an additional 400,000 medium-income taxpayers will have a larger discount.
- Significantly reduced basic building tax rates, with an emphasis on lower and medium value zones, so that 65%of old zones have a reduction, 34% to remain stable and only the 1% to see an increase.
At the same time, several low and middle band scales are consolidated at the lower scale levels.
- Basic land tax rates are reduced – even more , so that 91%of the old zones have a decrease, 7% remain stable and once the 2% to see an increase.
The basic land tax certificate is reduced, now, weighted approximately by 50%.
- Additional tax is incorporated – for natural persons – in the basic tax, in a way that corrects distortions and injustices of the past, which burdened too much a section of society.
No changes are coming on the additional corporate tax.
4th Objective: The new, even more reduced ENFIA, will be paid in more installments.
It is estimated that the certifications will be issued by the end of April, and the payments will then be able to are made in 10 installments.
The largest number of installments given to real estate tax.
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In conclusion, New Democracy keeps its pre-election commitment. The property tax is significantly and fairly reduced.
ENFIA, in total, is reduced by 1/3, or 860 million euros, compared to what we received from the previous Government.
8 out of 10 citizen-owners will see a reduced ENFIA. Mainly the lower and middle layers of society.
This result is the result of intensive and methodical work by the Ministry of Finance.
I thank the service and political officials for their contribution to this positive development.
New Democracy, demonstrating consistency of pre-election speeches and post-election projects, achieves a significant and permanent relief of tax burdens, in a socially just way.
New Democracy proves that it has deep roots in the Greek people, that it serves them with responsibility, away from populism and elitism.
Deputy Minister of Finance Mr. Apostolos Vesyropoulos for the real estate tax reform
As the Prime Minister has mentioned and the Minister of Finance has pointed out, this Government, consistent with its commitments, is proceeding with a new reduction of the ENFIA on a permanent basis.
The Government is proceeding with a new reduction of the ENFIA, which amounts to approximately 13% for natural persons.
In combination with the first initial reduction of the ENFIA by 22% on average in the summer of 2019, the Government of Kyriakos Mitsotakis, within the first 2.5 years of its term, will have proceeded to a total reduction of the ENFIA of more than 30% on a permanent basis .
We are talking about a reduction of around 860 million euros.
80% of citizens, i.e. 8 out of 10 taxpayers, will see a new reduction of the ENFIA in their accounts.
We are talking about about 5 million taxpayers.
2,200,000 of these taxpayers will see a reduction of more than 20%, and in particular 900,000 will see a reduction of more than 30%.
Approximately 14% of taxpayers will not see any change in ENFIA.
An increase will be noted only for 6% of taxpayers, the vast majority of whom are property owners either in areas with a large increase in zone prices or in areas that joined the objective determination system for the first time and whose taxation has been very low until now.
But even for 50% of them, the annual increase does not exceed 50 euros.
Let me remind you that we received an ENFIA with a total tax certificate of 3, 1 billion euros.
The new objective values, which apply from 1th January, despite what is widely disseminated, do not lead to increase in ENFIA.
They would even lead to a large increase, for the majority of citizens, if we did not proceed with the interventions we present to you today.
Because I have mentioned many times and I repeat it now: at the core of our policy always remains the reduction of tax burdens.
With the changes that we will present to you today, we are proceeding with a reform of ENFIA that will directly benefit the citizen.
We are dealing with the effects of the readjustment of the objective values so as not to burden the citizens:
1one. With a new reduction in ENFIA, even for taxpayers with real estate in zones where prices increased,
2on. By abolishing the additional tax for natural persons and integrating it into the main tax and
3one. With a more rational and proportional tax, correcting distortions and injustices.
In detail, with the new objective values, prices increased in 60% of the zones.
Thanks to our interventions in the basic building tax, in 65% of the pre-existing zones there will be a reduction, in 34% the tax remains unchanged and only in 1% of the zones there will be a tax increase .
-align: justify;”>The supplementary tax for natural persons is also abolished, as we promised, and integrated into the main tax.
The supplementary tax is currently calculated on the total value of the property, as long as it exceeds 250,000 euros.
This tax for natural persons is abolished and a tax is now imposed on the value of the property , provided that the property is worth more than 400,000 euros.
In addition, the rates of the main tax are reduced and scales are consolidated, for small and middle zone prices in the buildings.
At the same time, the rates are reduced in all tax calculation scales of the plots.
These changes concern both natural and legal persons.
For example, the rate of the basic building tax for a zone price from 1,051 to 1,500 euros /sq.m. is set at 2.80 euros/sq.m. instead of 3.70 which applies today, i.e. a reduction of 27%.
For a zone price from 1,501 to 2,500 euros the rate is 3.70 euros/sq.m ., while with the current regime for zone price from 1,501 to 2,000 euros the rate is 4.5 euros/sq.m. and from 2,001 to 2,500 is 6.
Even greater are the tax reductions on land plots.
Indicative, for plot value from 75 to 100 euros per sq.m. the rate is set at 0.0375 instead of 0.1850, i.e. reduced by 80%.
At the same time, there is a significant increase in personal tax deduction rates for the small and medium-sized property.
Specifically, the discount is set at 30% for property up to 100,000 euros, instead of property up to 60,000 euros that applies today, and at 25% for property over 100,000 euros and up to 150,000 euros, instead of the current 20%.
Only through the latest intervention, an additional 1,100,000 taxpayers benefit.
I am quoting some examples, so that everyone can understand the reality and also the substantial size of the new reduction of ENFIA on a practical level.
First example
Apartment in New Philadelphia, 1st floor 120 sq. .m., twenty years old, with a zone price of 1,200 euros, paid a tax of 372.96 euros in 2021.
In 2022 the zone price increased to 1,500 euros and the corresponding tax is 282.24 euros. While the property value increased by 25%, the tax decreased by 24.32%.
Second example
Apartment in Xanthi, 1st floor 100 sq.m., twenty years old, zone price unchanged at 750 euros, paid tax in 2021 220.50 euros , while in 2022 he will pay a tax of 147 euros, i.e. reduced by 33.33%.
Third example
Apartment in Kaisariani, 1th floor 100 sq.m., twenty years old, with a zone price of 1,100 euros paid tax in 2021 310 euros.
And while in 2022 the zone price is 1,350 euros, he will pay a tax of 220.50 euros.
So , with an increase in property value of 22.73%, the tax is reduced by 29.05%.
Fourth example
Apartment in Aegaleo, 1st floor 100 sq.m., twenty years old, zone price 1,100 euros paid tax in 2021, 310.80 euros.
In 2022, with the zone price set at 1,300 euros, he will pay a tax of 220.50 euros.
That is, while the value of the property increases by 18%, the tax decreases by 29%.
Fifth example
Apartment in Thessaloniki on Nea Egnatia Street, 1st floor 150 sq.m., twenty years old, zone price 1,100 euro paid tax in 2021, 466.20 euro.
In 2022, with the zone price set at 1,350 euro, he will pay tax of 352.80 euro.
That is, while the value of the property increases by 22.73%, the tax is reduced by 25%.
Ladies and Gentlemen,
I could cite millions more examples, as well as the benefiting citizens.
Things are clear and cannot be disputed.
The Government is proceeding with a new reduction of the ENFIA for the vast majority of citizens.
Citizens will see this reduction on their bills.
I want to thank the team that worked for to achieve this result, the General Secretaries and the executives of the Ministry of Finance.
In a difficult situation, the new reduction of the ENFIA is not only a practical act of consistency in our commitments, but also a substantial measure of support for citizens.
I would like to point out that tax deductions are still valid for taxpayers with financial inability to pay, as well as in People with disabilities, as provided by law. P>
i. Skylakakis: The new ENFIA is fairer and more economically productive
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Starting, to say that the new ENFIA is fairer, more economically productive and mainly reduces weight in the vast majority of citizens but also on the most unjust by this taxation. Property and the property of a very large number of citizens. Remember, ENFIA has about 7,200,000 taxpayers, ie 7,200,000 owners. We are the country with most, perhaps, owners, per capita, or the first in Europe. And the fact that this property increases its value is positive because it means that wealth in the country is growing. However, the fact that wealth is growing does not lead to an increase in the state’s share on this wealth. On the contrary, with our intervention today, it leads to a reduction in the share of the state on this wealth, the vast majority of Greek citizens. I also think of the vast majority of Greek households. One of the great injustices that existed in ENFIA to this day was the issue of land. They had very high burdens, and the ability to get revenue from a simple plot is limited and is mainly timeless. That is, you do not know when you will be able to sell it or use it and you had to pay too much money, just to keep it. And there were cases where for urban planning, commitments or others you could use the plot, or because there was no market at all, that is, there were areas that no one bought the plots on them, at this burden of ENFIA. So this great injustice, which exterminated a number of families, is largely lifted, with the intervention we make today. To do it concerns the budgetary burden. The tax certificate is reduced – as Finance Minister, colleague Mr. Staikouras, said – by € 353 million. The budgetary burden will be significantly lower because we expect two things to happen. First, there will be an increase in collection. There is no chance of such a great intervention that it corrects injustices, not to achieve a significant increase in tax collection. Commonly, people will be able to pay their taxes and we see that in recent years we have lightened ENFIA, the more the collection has increased. So we are sure of it. And secondly, the development potential this tax creates. Since in practice the first year you get part of the ENFIA certified, not all. You get another big piece in the time of 2, 3, 4, 5 and then. The development potential we believe will be created will bring very significant revenue so that in the coming years we can cover this significant tax reduction from healthy revenue. > In conclusion, I would also like to praise the excellent work of all the services, of all those involved, of the minister, who is apparently responsible for the matter of the relevant Deputy Minister, Mr. Vesiropoulos. And on our side, the State Accounting Office, let’s say that we also contributed, especially with the effort of our Secretary, Thanos Petralia, too, in this case.
