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New Greek Property Tax Passes Into Law

by Lorys Charalambous,, Cyprus

26 December 2013

The Greek Parliament has narrowly ratified legislation that introduces a new unified property tax, although one coalition lawmaker was expelled from his party for voting against the measure.

The Government hopes that the tax, which will be applied to vacant lots, sports fields, farms and agricultural land as well as to residential and commercial properties, will raise around EUR2.6bn (USD3.55bn) per annum. However, former Minister for Public Order Vyron Polydoras described the tax ahead of the vote as "heavy and unbearable" and refused to toe his party's line.

The tax was debated in Parliament as police clashed with farmers outside the building. Minister of Finance Yannis Stournaras argued that up until 2010 real estate in Greece had been undertaxed, and that it was unfair to say that land was now being overtaxed compared to other European countries. He also explained that the tax is designed to relieve the current burden on homes, shops, and businesses by imposing the tax in "a reasonable and proportionate way" on other land, in the interests of Greece's financial objectives.

Under the new law, real estate properties are taxed by size and by other factors such as age or zoning. However, there will be exemptions for low-income households.

A hundred and fifty-two out of Greece's 300 lawmakers voted for the tax, which has the approval of the "Troika" of the European Union, the International Monetary Fund, and the European Central Bank.

TAGS: tax | property tax | ministry of finance | legislation | Greece | tax reform

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