Greek Annual Property Taxes and the Greek Elections

Talk of the impending General Election dominates the news, fuelling intense debate in every taverna across the land, as the parties lay down their manifestoes for escaping the economic doldrums. Greeks love talking about politics and they love elections even more, although that may be due to the extra holiday given for voting and for recovering from the ordeal.

This election is far more important than the last, because it will determine the course that Greece takes to avoid financial chaos. Kostas Karamanlis’ conservative ND party claim that Greece needs to continue with the belt tightening and ride out the storm. George Papandreou’s left-of-centre PASOK suggest putting more money into the pockets of the average Greek, with a 3bn Euro stimulus package.

So far, the polls suggest that PASOK has a 7% lead over ND, so should manage a comfortable majority on October 4^th. However, Karamanlis is making a desperate gamble and hoping that the leftist party, SYRIZA, drains votes from Papandreou’s party, allowing his government to remain in power.

How will the Greek Election Affect Greek Annual Property Taxes?

For the vast majority of property owners, the Greek elections throw up some interesting news, with PASOK promising some sweeping changes to the property taxation structure. Before continuing, remember that such promises always come with the usual proviso that politicians promise anything before an election; whether they deliver is a completely different matter.

George Papandreou - Promising to Reform Greek Annual Property Taxes

In a televised debate, the PASOK leader stated that he was going to implement a different property taxation regime within 100 days, if voted into office. This scheme, part of a five-point plan to stimulate the economy, is based upon relieving the taxation burden of normal homeowners and shifting it towards the large property owners and real estate holdings. Interestingly, he included the Greek Orthodox Church in this, as one of the largest property owners in Greece.

Currently, the taxation level in Greece is set at €243 000, at which time you will pay a rate of between 0.3% and 0.8% of the total value of your property, every year. This cut-off is measured against the value of the house as determined by the tax office, which is generally significantly lower than the market value. Finally, this tax-free figure incorporates the total value of all your properties, not every individual property

Whilst this level ensures that many homeowners do not pay Greek annual property taxes, there are still significant numbers falling on the wrong side of the cutoff, especially if they own more than one property. For many foreign property owners, who tend to buy properties in expensive hotspots near the coast or in the cities, this level is not so generous.

If PASOK, as predicted, do gain a majority, then there is a chance that this level could increase and save you a little money. Of course, if you are an investor or speculator, with a portfolio of rental or sale properties, then you may be praying that Kostas overcomes the odds and at least prevents PASOK from gaining an outright majority.

Whichever way the election goes, Greek property prices have remained steady, and it is one of the few countries in Europe that has not seen process plummet during the economic crisis. For an overview of the global property market and the economic crisis, Property Investment – The Credit Crisis and – The Future Part One is an excellent article.