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Greece: Government Introduces New Special Tax on Real Estate

(Sept. 22, 2011) In order to deal with the ongoing financial crisis in Greece, the Greek government has imposed a number of austerity measures in an effort to increase revenues. On September 16, 2011, an amendment was introduced in the Parliament that will impose a special surtax on real estate.(Amendment for Special Tax on Real Estate to Parliament, ANA-MPA DAILY NEWS BULLETIN, Issue No. 3892 (Sept. 17, 2011), at 3, via email from The Public Power Corporation (PPC) will collect the tax through electricity bills sent to consumers; the PPC is required to cut off the electricity of consumers who fail to make payment. The PPC must also inform the tax authorities of those consumers who refuse to pay the tax. The amendment provides for a fine to be paid by the PPC if it refuses to cut off the electricity. (Id.)

Individuals who are unemployed, who have an annual family income of less than €8,000 (about US$10,942), and who do not receive unemployment benefits are eligible for the lowest real estate tax rate, which amounts to €0.5 per square meter, provided that they apply electronically for the purpose of having their financial records cross-checked.

The amendment exempts properties owned by the Greek Orthodox Church or other religious legal entities that are used for educational, religious, or philanthropic activities or as places of worship. It also exempts large hotels. (Id.)

The government anticipates raising close to €2.6 billion through the new tax proposal if it is adopted and fully implemented. However, the measure has been met with strong opposition from the Coalition of the Radical Left (SYRIZA), which has called it unconstitutional and objected to making PPC employees tax collectors. The General Confederation of Employees of Greece also criticized the measure for leaving out of its scope large hotels, which, it stated, “already enjoy enough privileges.” (Id.)