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In 1996 the Greek government came up with a new tax. This despite emphatic pre-election promises of a "no new tax" policy. I must admit, though, that they introduced this new tax with a minimal amount of political cost. They labelled it as the "Tax on Large Real Estate Owners". The name infers that only wealthy people with huge holdings would be affected. The vast majority of Greek voters and tax payers would be exempt. Indeed an ingenious scam. This tax is paid by those persons who have property holdings in Greece which are collectively worth more than 60 million Greek drachmae (approximately US $20,000.00). This can hardly be considerred to be the threshold beyond which one can be deemed "wealthy". Today over 25% of the Greek taxpayers are now obliged to pay this tax. Are all those people "wealthy"? I sincerely doubt that. In order to implement this new tax a new tax form called the "E-9" was created upon which all real estate holdings are to be itemized. Who is required to file the new "E-9" tax form: 1. All persons who are obliged by law to file Greek income tax returns automaticaly acquired the obligation to file the "E-9" form as well. Even if that person has no real estate to report he or she is still required to submit it with the indication that he or she does not own any property. 2. All persons who own or partially own any real estate in Greece are required to file the "E-9" form in which they must list each piece of property in detail. As a result these persons automaticaly acquire the obligation to file the "E-1" regular Greek income tax returns as well. Even if those persons have no income to report in Greece they still must file both forms. How do you know what your property is worth? Here is the beauty of this new tax. The market value of your property is assessed by the tax authorities using their own rather unique mathematical formulas and criteria. Because of the relatively low amount of new revenues generated, the government has increased their value assessments every year since it's initial application. Initially their value assessments were lower than the actual market value but since then they have slowly brought the assessed value to either a par or, in some cases, even higher value than that which the market will offer. If you feel that their assessment is too high you can contest it but you have only 30 days from the day you receive your tax assessment to file a protest. Otherwise all bets are off. What if I just ignore this problem? Because the Greek bureaucracy is a standing joke and is only worthy of pity, you can ignore this problem and it will never catch up with you unless they actualy get organised and efficient. Excuse me while I laugh! Hades will probably freeze over first. If you never do anything with your property, i.e. sell or build on it, then you don't have to deal with this. But, your heirs will have to mess with it later when and if they try to inherit the property. If you don't care about the hastles they will endure then go back to whatever else you were doing. If you or your heirs do decide to make use of the property then you will have to face the following scenario: a. A 50,000 drachmae penalty will be applied to each year you failed to file the E-1 and E-9 forms. (This amount may be amended upwards every year). b. If your property would have been taxable then that tax amount will be assessed along with an additional penalty of up to 100% of the assessed tax amount. c. Interest will be applied to the assessed tax and penalties at a rate of 2% per month compounded monthly. d. No action concerning any of your property will be allowed until all back taxes have been paid. What can you do? 1. Put together any and all paperwork you may have which pertains to your property in Greece. 2. Head on down to your nearest Greek embassy or consulate and get from them the necessary forms and any assistance they might be able to provide. Need more help? If your Greek is lacking or if you can't get the necessary paperwork done from where you live I can hook you up with a qualified accountant and lawyer who will be able to straighten out your case for an appropriate fee. Contact me Many people may suspect that the Greek government is intentionally refraining from making an effort to inform the millions of property owners who live abroad. It is easy to assume that the Government is secretly hoping to confiscate property upon which back taxes are owed by people who don't have a clue. I, though, doubt this theory. Not because I think they have any scruples but rather because they lack the inteligence needed to devise such an elaborate plan. I believe that due to their inherent lack of imagination, their amazing lack of foresight, and their dazling overall ineptitude, they simply did and continue to do nothing (which is something they are alarmingly good at). Regards from sunny Athens, Tom |
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