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Property tax bill delayed

07/07/2015 11:31
The bill for the the single tax on properties at the rate of 1 per thousand will be referred to next September due to a delay in its submission by the government. The House has no time to examine the bill due to the summer vacation.

The tax department disagrees with the enactment of the bill after the summer, because as the Taxation Superintendent Yiannakis Lazarou said, the department needs four months to collect the relevant taxation.

The Union of Municipalities and Communities asked for the submission of the bill to the plenary otherwise it will send the relevant taxes to citizens based on 1980 prices.
It also asked to collect the taxes themselves.

The opposition parties reacted to the single tax rate.

General Manager of the Interior Ministry Costas Nicolaides said that if municipalities send taxes in 1980 prices, 30% of the real estate will not be taxed.

Today it was decided, however, to discuss the bill on reducing transfer fees by 50%, which will be led to the plenary on Thursday.

Minus €20mn from single tax

Presenting the bill package on the tax reform in the property sector, Interior Minister Socrates Hasikos said he expected that €150 mn will flow to the state coffers from the single tax on real estate at the rate of one per thousand.

Last year the state collected €170 mn from both the property tax and the taxation of the municipalities.

As he said, the imposition of a single rate is fairer based on 2013 values while the tax base is at €150 bn, adding that the revised tax base will bring a fairer distribution.

“In 2015”, he said, “we will collect €120 mn while from transfer duties we will collect another €35mn”.

He added that “in 2014 the government collected from property tax €104 mn from a total of €135 mn issued tax while the municipal taxes amounted to €13.4 mn.

He indicated that in 2014 the total revenue was €171 mn, while in 2015 there will be a decrease in revenues of €20 - 21 mn, noting that the Finance Ministry assured them that the fiscal situation is manageable.

According to the minister, the aim of the bills is to modernize the fiscal framework, a more equitable tax burden allocation and the adoption of values based on current market valuations (1/1/2013).

He said that the bills provide for the imposition of a single tax rate, the abolition of municipal and community fees, the reduction of transfer duties by 50% by the end of 2016, the imposition of property tax 1 per thousand and assignment of the mechanism for the imposition and collection from the tax department.

We strengthen, he said, the position of the municipalities and the government, the municipalities must become autonomous and the municipalities must be financially supported.

Mr. Hasikos noted that with the updating of the 1980 values, prices rose by six times for flats, 20 times for residential land, 6 times for shops and 6 times for houses.

He assured that the Land Registry will update prices every two years.

The Taxation Superintendent Yiannakis Lazarou said that the value of the tax base is €151 bn with a compliance of 80%.

“Revenues from the property tax in 2014 amounted to €104 mn from €135 mn.

The interior minister expressed his discontent at the decision of the House Finance Committee not to forward the bill on trapped property owners to the plenary on Thursday.