Greek taxpayers will be able to pay off the newly introduced unified property tax (ENFIA) in six instalments, while revisions to the tax rates for 4,000 residential areas around Greece will also be made, the government decided this week, offering some clarity to one of the most controversial issues recently.
Meeting in Athens, Prime Minister Antonis Samaras, his deputy and coalition partner Evangelos Venizelos, and Finance Minister Gikas Hardouvelis also decided that owners of property currently not rented out, or not connected to the electricity grid, would not be granted any ENFIA discounts for this year.
The revisions to ENFIA, which replaces the so-called Real Estate Property (FAP) tax and a levy paid via electricity bills, is to be tabled in parliament any day now, with the objective of relaunching the new tax in mid-September following a disastrous first attempt several weeks ago.
Taxpayers around the country were alarmed by ENFIA amounts well above expected levels. The government swiftly acknowledged that numerous calculation errors had been made. It put tax payments on hold, advising people to wait for corrections to be released as well as new payment deadlines.
Based on the revisions decided earlier on this week, the deadline for the first of six monthly ENFIA instalments was extended by a month, until the end of September, with the final instalment to be expected by the end of February.
In other revisions, exemption procedures for vulnerable social groups, including the disabled, will be simplified, it was announced. Also, properties on the Ionian island of Kephalonia, which was struck by a major earthquake in February, have been exempted from the new ENFIA property tax for a year. The same will also apply to properties in other parts of the country affected by other earthquakes and consequently put out of use.
Following the latest revisions, the 2014 ENFIA is worth 3.2 billion euros, although the government is targeting the collection of 2.65 billion. While the revisions made to the 4,000 residential areas reduced the final tally by 165 million euros, the government anticipates it will benefit from an increased collectability rate, now estimated at 88 per cent, from 82 per cent initially.
The government, through its Finance Minister Gikas Hardouvelis, also stated that it will commit itself to a gradual reduction in the future payments of ENFIA, as long as Greece’s tax base widens.
At the same time, the minister made clear that the matter of ENFIA discounts on properties not connected to the country’s power grid – one of many issues that have surrounded the new tax this summer – would be examined at a later date.