The Ministry of the Interior is preparing changes to the way municipal fees are calculated and collected, aiming to reduce the financial burden on most property owners and tenants.

The first step was taken last Friday in the Plenary Session of the Hellenic Parliament, with the passage of the new Local Government Code. The legislation provides for the incorporation of the existing Tax on Electrified Spaces, known as FOT, and the Real Estate Tax, known as TAP, into a new Local Development Fee, or TTA.

The new charge, described by some as a “municipal ENFIA” — a reference to Greece’s main annual property tax — will take effect on January 1, 2027.

For the vast majority of properties, it is expected to bring annual reductions ranging from €26 to €72. However, newly built apartments in areas with very high objective values, such as Kolonaki in central Athens, are expected to see increases ranging from €38 to €160 per year.

A second phase is expected to follow one year later, on January 1, 2028, and will provide for the full decoupling of municipal fee collection from electricity bills.

The regulation promoted by Interior Minister Theodoros Livanios provides for the issuance of a Presidential Decree that would establish a new payment system for municipal fees, separate from the Public Power Corporation, with the agreement of the Central Union of Municipalities of Greece, known as KEDE, and the Ministries of the Interior, Digital Governance and Finance.

According to reports, responsibility for collection will most likely be assigned either directly to municipalities or, if that proves unworkable, to the Independent Authority for Public Revenue (AADE). The change would meet a long-standing request from both local authorities and electricity providers.

Under the plan, the new system would resemble ENFIA: the fee would be issued once a year and could be paid in 12 instalments.

Correcting long-standing distortions

The philosophy behind the Ministry of the Interior’s plan is based on two main objectives: significant reductions for properties more than 20 years old in areas with low or medium objective values, and higher fees for newly built, large apartments in areas with very high objective values.

The aim is to correct a long-standing distortion under which, for example, a 100-square-metre, 40-year-old apartment in Agios Panteleimonas or Acharnes may be charged the same municipal tax as a newly built home of the same size near Kolonaki Square, despite the obvious difference in their objective values.

Under the new system, the owner of a 30-year-old, 120-square-metre apartment in Ano Patisia will pay an annual “municipal ENFIA” of between €45 and €63, depending on the rate chosen by the municipal authority. Today, the same owner pays €71.10.

By contrast, a newly built 160-square-metre apartment in Kolonaki is expected to face an annual increase ranging from €38.40 to €160.

How the new fee will be calculated

From January 1, 2027, the Local Development Fee will be imposed on all property owners, replacing TAP and FOT.

The new fee will be calculated using a rate set by each municipality, ranging from 0.3 to 0.7 per thousand, applied to the value produced by multiplying the surface area of the property by the relevant objective zone value per square metre and by the property’s age coefficient.

In practical terms, the calculation will be based on: square metres × age coefficient × zone value × municipal rate.

Today, TAP is imposed at a rate of 0.25 to 0.35 per thousand on the value produced by multiplying the property’s surface area by the objective zone value and the age coefficient. FOT is estimated at around 50% of TAP on average.

Which properties are affected

The Local Development Fee will apply to all types of real estate located within an approved city plan, within the boundaries of settlements that existed before 1923, or within the boundaries of settlements with fewer than 2,000 residents.

It will also apply to buildings outside approved city plans and outside the above settlement boundaries. In these cases, the municipal council will calculate the value by taking into account the value of the structures, as well as the value of land equal to twice the area occupied by the structures.

The fee will also apply to the right of future construction, often referred to in Greece as “air rights”, provided this right is included in a real estate transfer contract.

Who will be responsible for payment

The fee will be payable by the owner, usufructuary or possessor of the property.

If the electricity bill is issued in the tenant’s name, the tenant will initially be liable for payment. However, the amount of the TTA will then be deducted from the monthly rent.

If the liable party refuses to pay the fee by failing to pay three consecutive monthly bills or one quarterly bill, the electricity supplier will be required to disconnect the property. Power will not be restored until the amounts owed to both the supplier and the municipality have been paid in full.

If the debtor does not request reconnection, the electricity supplier will notify the relevant municipality while removing the debtor from the list of consumers, allowing the municipality to proceed with collection of the outstanding TTA.

The Ministry of the Interior is preparing changes to the way municipal fees are calculated and collected, aiming to reduce the financial burden on most property owners and tenants.The first step was taken last Friday in the Plenary Session of the Hellenic Parliament, with the passage of the new Local Government Code. The legislation provides for the incorporation of the existing Tax on Electrified Spaces, known as FOT, and the Real Estate Tax, known as TAP, into a new Local Development Fee, or TTA.The new charge, described by some as a “municipal ENFIA” — a reference to Greece’s main annual property tax — will take effect on January 1, 2027.For the vast majority of properties, it is expected to bring annual reductions ranging from €26 to €72. However, newly built apartments in areas with very high objective values, such as Kolonaki in central Athens, are expected to see increases ranging from €38 to €160 per year.A second phase is expected to follow one year later, on January 1, 2028, and will provide for the full decoupling of municipal fee collection from electricity bills.The regulation promoted by Interior Minister Theodoros Livanios provides for the issuance of a Presidential Decree that would establish a new payment system for municipal fees, separate from the Public Power Corporation, with the agreement of the Central Union of Municipalities of Greece, known as KEDE, and the Ministries of the Interior, Digital Governance and Finance.According to reports, responsibility for collection will most likely be assigned either directly to municipalities or, if that proves unworkable, to the Independent Authority for Public Revenue, known as AADE. The change would meet a long-standing request from both local authorities and electricity providers.Under the plan, the new system would resemble ENFIA: the fee would be issued once a year and could be paid in 12 instalments.Correcting long-standing distortionsThe philosophy behind the Ministry of the Interior’s plan is based on two main objectives: significant reductions for properties more than 20 years old in areas with low or medium objective values, and higher fees for newly built, large apartments in areas with very high objective values.The aim is to correct a long-standing distortion under which, for example, a 100-square-metre, 40-year-old apartment in Agios Panteleimonas or Acharnes may be charged the same municipal tax as a newly built home of the same size near Kolonaki Square, despite the obvious difference in their objective values.Under the new system, the owner of a 30-year-old, 120-square-metre apartment in Ano Patisia will pay an annual “municipal ENFIA” of between €45 and €63, depending on the rate chosen by the municipal authority. Today, the same owner pays €71.10.By contrast, a newly built 160-square-metre apartment in Kolonaki is expected to face an annual increase ranging from €38.40 to €160.How the new fee will be calculatedFrom January 1, 2027, the Local Development Fee will be imposed on all property owners, replacing TAP and FOT.The new fee will be calculated using a rate set by each municipality, ranging from 0.3 to 0.7 per thousand, applied to the value produced by multiplying the surface area of the property by the relevant objective zone value per square metre and by the property’s age coefficient.In practical terms, the calculation will be based on: square metres × age coefficient × zone value × municipal rate.Today, TAP is imposed at a rate of 0.25 to 0.35 per thousand on the value produced by multiplying the property’s surface area by the objective zone value and the age coefficient. FOT is estimated at around 50% of TAP on average.Which properties are affectedThe Local Development Fee will apply to all types of real estate located within an approved city plan, within the boundaries of settlements that existed before 1923, or within the boundaries of settlements with fewer than 2,000 residents.It will also apply to buildings outside approved city plans and outside the above settlement boundaries. In these cases, the municipal council will calculate the value by taking into account the value of the structures, as well as the value of land equal to twice the area occupied by the structures.The fee will also apply to the right of future construction, often referred to in Greece as “air rights,” provided this right is included in a real estate transfer contract.Who will be responsible for paymentThe fee will be payable by the owner, usufructuary or possessor of the property.If the electricity bill is issued in the tenant’s name, the tenant will initially be liable for payment. However, the amount of the TTA will then be deducted from the monthly rent.If the liable party refuses to pay the fee by failing to pay three consecutive monthly bills or one quarterly bill, the electricity supplier will be required to disconnect the property. Power will not be restored until the amounts owed to both the supplier and the municipality have been paid in full.If the debtor does not request reconnection, the electricity supplier will notify the relevant municipality while removing the debtor from the list of consumers, allowing the municipality to proceed with collection of the outstanding TTA.