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Greek Lawmakers Pass Unpopular Property Tax

by Ulrika Lomas,, Brussels

29 September 2011

Overcoming a significant hurdle, the Greek parliament has narrowly adopted by 154 votes to 142 the government’s highly controversial and hugely unpopular new property tax.

Despite a clear rift within the Prime Minister George Papandreou’s embattled ruling Socialist Party (Pasok) over the new austerity plan, and against a backdrop of protests and planned strike action, all Pasok members finally rallied, voting in favour of the new levy.

The Greek parliament must also back further controversial fiscal measures aimed at appeasing the Troika (the International Monetary Fund, the European Union and the European Central Bank) in the coming weeks to secure the release of a new EUR8bn (USD11bn) tranche of international aid.

Alluding to the commitments taken by Greece within the framework of a second international aid plan, Greek Finance Minister Evangelos Venizelos referred to the decisions of July 21 as an institutional 'bible', noting that, as agreed, Prime Minister Papandreou now aims to submit to international money lenders a written guarantee that it will implement the measures announced. A new visit by inspectors will then take place.

Expected to yield around EUR2bn for the state this year, the new tax aims to enable the government to meet its 2011 budget deficit target. The levy will be collected through electricity bills instead of via the usual tax collection mechanism and will range from EUR0.50 to EUR10per square metre, depending on the location of the property.

TAGS: tax | investment | economics | real-estate investment | property tax | fiscal policy | real-estate | budget | Greece

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