Greece mulls 8 pct cut to Enfia real estate tax; Property high on TIF agenda

Greece is looking to reduce its Enfia property tax by eight percent in 2022 as tourism growth and the country's rebounding economy boost state revenues.

A cut to Enfia is seen helping support further price hikes in housing as confidence increases in the sector amidst strong construction activity, despite ongoing uncertainty from the pandemic.

Talk of a possible cut to the real estate levy is being floated by government officials as the tax office gets ready to send the annual Enfia bill to some 6.3 million home owners in coming weeks.

Finance Minister Christos Staikouras told Open TV last week that any changes to the tax will be decided upon in November, when the government has included the new land tax values in its calculations and the impact they will have on government revenues.

Although Staikouras said that final decisions have yet to be made, Prime Minister Kyriakos Mitsotakis may use his annual keynote speech at the Thessaloniki trade fair (TIF), scheduled to take place September 11-12, as a way to announce the tax cut.

The annual policy speech from Greek prime ministers at TIF is used as a platform to flag upcoming economic decisions and is closely watched for any handouts. Government officials say that the real estate sector is likely to among the top topics to be addressed by Mitsotakis.

Staikouras said that so far government revenues are two billion euros higher than last year’s levels, describing it as a good situation in which tax cuts could be delivered.

"Industrial production and tourism are on a good path,” he said.

When the Finance Ministry has a more complete picture and we put together the draft budget for 2022, then the fiscal space for tax cuts or reductions to social security contributions will be decided, he added.

With Greece’s tourism industry drawing an unexpectedly high number of visitors (estimated at some 6 people so far this summer) the economy looks to be performing better than expected. The Finance Ministry is likely to revise higher in comings month its growth forecast for 2021 which currently stands at 3.6 percent.

Think tank IOBE sees Greek GDP expanding by 5-5.5 percent this year, while National Bank of Greece sees that figure at 5.7 percent.

2021 Enfia bill

Notifications for payment of this year’s property levy are scheduled to be sent out to taxpayers in the second half of September.

Property owners will be able to pay the amount in six monthly payments. It is still unclear when the first monthly payment will be due as that will be determined by the date the Enfia notices are sent out.

The government will earn some 2.5 billion euro from the levy that had been initially introduced in 2011 as a temporary tax by the Finance Minister at the time – Evangelos Venizelos - as a means to help prevent the country from going bankrupt during its debt crisis.