Prime Minister Kyriakos Mitsotakis announced a three-year suspension of value-added tax (VAT) payments on any new building permits, including unsold properties built after January 1, 2006, on Wednesday.

Addressing the Economist’s 23rd Roundtable discussion with the Government of Greece, he said that the VAT would be suspended “as it is for older permits issued after 1 January, 2006”, hence all new constructions and properties built in the last 14 years that have not been sold yet would be exempt from the tax. The exemption would also applied to cases of ‘antiparochi’ where owners provide their land to builders in exchange for a number of future apartments. A simple application will be set up to claim the exemption.

Mr Mitsotakis said the real estate market is recovering following the property boost during the debt crisis. Property prices in Greece increasing by 7.7 per cent in the second quarter of 2019. He said courageous measures were needed to boost construction activity.

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He said Greece is as a country that “is no longer asking its partners for favours”.

“Greece talks to its partners and is no longer a mere listener, but also a creative interlocutor,” he said.

The omnibus draft bill on development is expected to be voted in by Greek Parliament on Thursday. “The aim is for growth to come from investments and to unblock major investment projects plagued by bureaucracy,” Mr Mitsotakis said.

“Our program also extends to infrastructure and energy policy, as 30 per cent of Athens International Airport is being privatised and 10 ports nationwide will be developed with the participation of private funds,” Mr Mitsotakis said, adding that thousands of state-owned buildings will follow the same route.

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“Greece’s reliance on lignite for electricity production will end entirely by 2028,” he said. “A pilot implementation of electronic bookkeeping in companies has begun and soon it will be compulsory across the spectrum and for everyone.”

Mr Mitsotakis also spoke of the European Commission’s approval of Project Hercules – the government’s plan to provide almost 9 billion euros in state guarantees to help banks reduce their debt, with the money coming from a buffer of some 40 billion euros worth of citizen’s tax payments.