The Prime Minister of Greece has recently announced changes to the Greek property tax, ENFIA, which could see as many as 80% of Greek property owners paying less tax.
Explaining how the tax cut will work, Greece PM Kyriakos Mitsotakis said: “Under the new rules, eight out of ten property owners will pay an even lower rate, a fair share will pay the same contribution, while a small minority, around 6%, will see a reasonable increase.”
The 13% reduction in ENFIA will equate to around €350 million, much higher than the €70 million allocated in the 2022 budget.
Lowering the ENFIA tax is a major move towards the government’s framework to totalling reform the property taxation in Greece.
Mitsotakis described the move as a “fair decision for society and beneficial for the economy”, adding that it did not exceed the fiscal margins. He stressed that “every step forward must be taken in such a way that it does not lead to two steps back.”
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What is ENFIA?
ENFIA stands for Uniform Real Estate Property Tax. It is an annual tax levied on all real estate properties in Greece that belong to natural or legal persons.
There are two different elements of ENFIA:
- Primary tax – levied on each property and determined by the location, area, use, age, floor and number of façades of the building.
- Secondary tax – for individuals, the tax is levied on the total value of the owner’s property exceeding €200.000. There is another secondary tax for the excess amount. It ranges from 0.1% to 1.15%. For legal entities, the tax is levied on each owner’s property’s total value. It is 0.55% of the total value of all the properties. The tax rate for immovable property is 0.10% for properties used for conducting/producing business activities of all kinds.
Who will be the winners and losers of this tax cut?
While many property owners will see a reduction in their annual tax bill, around 180,000 property owners will see an increase, mainly due to the ‘zone’ that their assets are located.
Middle and lower value zones will see the greatest benefit, with some zones seeing a reduction of up to 50% of the secondary tax. Properties worth up to €100,000 euros will see a 30% relief.