• ALALOUM

Govt mess with calls to align objective values with real property prices

A retroactive shift in objective values would affect a number of other taxes and factors

The Plenary Council of the State ordered the change of objective property values so that these are based on actual commercial prices in 2015, causing a mad scramble by the government to avoid returning taxes or result in the state losing  2.65 billion euros from the single property tax (ENFIA) in 2016.

The problems that would be caused by an alignment of objective property values to their actual worth are manifold due to the fact that:

– The decision would be retroactive from May 2015;

– The ENFIA rates as well as those of dozens of other taxes and duties would be changed as a result;

– Auctions would be blocked as the new starting prices are recalculated;

– Home sales would be affected as prices and fees would be recalculated based on new data.

The adjustment, apart from economic problems, would give rise to political problems as can be seen by the first meetings of committees on objective price values that have already been created around the country. If objective prices reach commercial prices, then residents in privileged districts would pay less while the burden would be shifted to poorer residents.