When 64 year-old Melburnian Jim Apostolopoulos built his dream home in Koroni, he never thought that dream would turn into a nightmare, with the Greek taxman playing the lead role.

Originally from Koroni, Jim migrated to Australia in 1966 and lived and worked in Melbourne until his recent retirement. When he could afford it, he would return to Greece for holidays and to catch up with friends and family.

In 2004 he replaced the old barn on his family’s plot with a brand new home – a place to holiday with his wife Lambrini and their children. Jim and his family have spent around three months at the house every year since then, apart from 2010. He has never earned income through renting out the property, he has always paid the standard regular expenses – rates, water, and electricity, and owns a 1995 Nissan Pulsar, which he leaves garaged when not in Greece.

Two months ago, ‘A’ for Apostolopoulos meant Jim was first in-line to receive an assessment for the contentious new levy on foreign owners of Greek property. Jim’s tax liability for the financial year ending 2010, was according to the Greek tax authorities,1146 euros. The calculation was based on a valuation of his ‘earned income’, relating to the size of his house, his car, and his tekmarto – the assumed level of ‘income’ the tax authorities now apply to foreigners who own property in Greece.

The assessment was even more of a shock for Jim, because in 2010, he and his family had not even visited Greece. Even though he had not used the house or his car, had recieved no income from the property, and had not set foot in Greece during the twelve months in question, the new laws meant that Jim was liable.

Like many in his position, Jim is frustrated and feels the tax is simply unjust.

“I’m upset and appalled by the new system. If I fall sick, I pay my own way there and I don’t use the public health system,” says Jim, “why should I pay taxes? I go to Greece for a holiday. Why should I have to pay tax if my property isn’t generating a income through rent? I cannot even claim the expenses on it.”

With help from his his Greek tax agent, he was able to claim some exemptions. “We produced a copy of the electricity bill from DEH, showing there was no electricity used in this period we got exempted nearly 700 euro, but because we did not deregister the car during the year (and hand in the number plates) and they assumed 5000 euro as tekmarto, (they said this was the minimum level that could be applied) – I had to pay 450 euro in the end”.

Apostolopolos says that he plans to write to Greek Deputy Foreign Minister Dimitri Dollis, to raise the matter of the property tax in the Greek Parliament. “I’ll say to him, this is not right. We come here, we spend money, we don’t cost anything, not a cent”.

International tax lawyerTony Anamourlis at LAC Lawyers in Victoria, says there are major implications for Greek Australians with assets in Greece. “The new regulations mean that all property owners must now file an annual income tax-return irrespective of whether the property generates income, and the Greek taxman will calculate your tax libility on three basic calculations – the internal area of your property -your tekmarto (assumed income), and if you have a car in Greece, this will also be a tax liability.”

Anamourlis says the new legislation cannot be avoided, though there are measures you can take to reduce the amount you will have to pay. “The only way anyone is going to be able to reduce their tax libility is to follow Jim’s example – make sure you get electricity bills which confirm non-use of electricity in the months you’re away from your property, de-register your car when you’re not there, and for the tekmarto, it will help to declare at the airport when you come into the country an amount of foreign currency that you are bringing into Greece to cover your living expenses”.

The Greek Government intends for the new law to generate millions of much needed euros for the economy. The downside may be that foreign investors will find the new taxes discouraging and this could ultimately lead to a downturn in the property sector.