Real Estate: The six changes for owners expected during Fall

New model for the extension of the “cut” rents which is accompanied by a bonus-tax for property owners, who willingly will decrease the rents in business properties, update all the lease contracts, new objective values in 10.500 areas in all the country and their extension in at least 3.000 new regions, a cut in ENFIA of 2021, as well as electronic transfers, parental grants and property donations from the notary’s office compose the new scenery in properties and the taxies which burden the immovable property from the Fall.

According to information, the financial staff of the government has concluded regarding the system implicated for the preservation of the measure of mandatory decrease of 40% of the rents for fields who are struggling due to corona virus crisis, such as tourism, food catering and is simultaneously preparing tax-deductions earned by property owners, who will agree with their lessees a rent decrease up to 40%. Towards the end of the year, the property evaluators are expected to get back to work, who shall define the new objective property values which will be activated during summer 2021. As soon as the “parenthesis” of pandemic is finished, the government will proceed to a new ENFIA decrease of an average of 8%-10% , which had been scheduled for the present year but stayed “in the drawer” of Ministry of Finance due to the coronavirus spread.

More specifically, the new landscape which is shaped for property owners is composed by the following changes:

1.      Rents

A new system for the maintenance of “Cut” rents is being prepared by the Ministry of Finance, as the following Monday is the expiration date for the mandatory decrease of 40% of rents in fields of food industry, tourism, transportation, culture and athletics. For the fields which are intensely affected by the coronavirus crisis, such as tourism and food catering, and potentially other fields, the regulation extension is mandatory. For as long as the mandatory rent decrease lasts, property owners shall be entitled to a tax return equal to 30% of the income losses they have suffered.

“We aim to extend the mandatory decrease for a large time period”, as Christos Staikouras mentions, in order to report that the government is being oriented to a “mixed” system of mandatory and voluntary rent decreases in specific fields. The measure shall regard the business property leases and not residences and more specifically, it is under examination for cases where an agreement exists between owner and lessee, in order to grant a motive to owners to proceed to the reduction of rents. According to information, the owners who agree with lessees on the rent reduction, shall earn a tax deduction. The percentage of the deduction shall be defined by the “Cut” agreed between owners and lessees on the rent. It is noted that ΠΟΜΙΔΑ has suggested to fully abolish the mandatory 40% rent reduction which is applied today until the end of August in food industry, tourism, culture and transportations, and to continue the support of 30% of income loss for any owners or lessees agree to a voluntary reduction of up to 40%.

2.      Lease Contracts

The tax payers who are leasing properties shall submit to the platform of AADE, until 30th of September 2020, a declaration of validity or expiration of all their current lease contracts, declaring for the first time the lease agreements which were contracted before 2014 and never declared. The declarations are submitted without consequences.

3.      Objective values

The coronavirus appearance “froze” the readjustment exercise of property objective values which had initiated during the beginning of the year by the Ministry of Finance along with the help of property evaluators. The following year, and according to the updates on the pandemic front, the plan of equalization of objective to market values will run. The private evaluators will be required to re-write the zones prices in various regions of the country, as the pandemic has reversed the landscape of land market, by grounding the values of properties to lower levels. The suggestions delivered by the evaluators regarding new objective values in more than 10.000 areas of the country will not be binding for the financial staff. The suggestions will be filtered by the special working group which was established in Ministry of Finance. The new prices will be valid for the calculation of ENFIA during 2021, and from 1st January 2022 for property transfers.

4.      Expansion of zone prices

Zone prices are expected to be established for the first time in at least 3.000 areas within the country, which shall appertain for the first time to the objective evaluation system. This regards mainly areas which have been domestically or touristic developed but are being treated – in tax matters- as outside of plan and settlement, viz. with the lower land parcel values. Following their inclusion to the objective system, the taxable material is expected to rise significantly in them and a fiscal area will emerge, in order to fund to a great extent the “cut” in ENFIA.

5.      ENFIA (Unified Property Ownership Tax) 2021

During the summer of the following year, the new decrease of ENFIA at 8-10% is expected to be activated, in combination to the new objective values, which was scheduled for this year but was paused due to the pandemic. The new ENFIA decrease is expected to delete the tax burdens which shall emerge from the increases in the objective property values in multiple areas of the country where the “cute” amongst prices implemented by Tax Authority and commercials is still large and following the readjustment of June 2018. In any case, a key-role for the height of the bill of the property tax of the proximate year will be played by the new zone prices. Burdens shall be expected for taxpayers who owner properties in best areas, viz. islands and tourist areas which will be included for the first time in the objective evaluation system. This regards mainly taxpayers who currently own properties of high values in Mykonos, Santorini, Corfu as well as expensive areas amongst of which even Attica, and are almost non-taxpayers or pay ENFIA equal to a taxpayer who owns an apartment in Kallithea.

6.      Electronic property transfers

Following the end of queues in Tax Offices set by the AADE (Independent Authority of Public Revenues) regarding property transfers, parental grants and declaration submission to IRS via e-mail, courier or registered mail, the next step is scheduled for 2021. All property transfers shall be completed electronically by the Notary’s office with full digitalization of the capital tax declarations.

 

Source: https://www.b2green.gr/el/post/83248/akinita-oi-exi-allages-pou-erchontai-to-fthinoporo-gia-tous-idioktites%CE%91%CE%BA%CE%AF%CE%BD%CE%B7%CF%84%CE%B1

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