As the Greek Government focuses on cutting down their immense debt a new bill drafted in by the Greek Parliament will see British people who own homes in Greece hit with new taxes and fines.
The new bill will introduce surcharges of up to 20 percent on any properties that have new extensions or rooms added on. Greece has long been a popular destination for British holiday makers, many of whom own properties in areas such as Santorini, Crete, Rhodes and Mykonos, and these homeowners now face unsightly charges that could run into the thousands.
Another group of citizens who may suffer due to the new bill are the Germans as they also have a strong presence of second-home owners in the Greek isles. This will no doubt annoy Germans as they are already opposed to bailing-out Greece from its financial woes, let alone being forced to via taxes. On the flipside though it is thought that internally Greece sees Germany’s powerful economy as a key tool to aid them as they bid to climb out of their deep debt.
George Papandreou, the Greek Prime Minister, is tasked with the chore of finding €20bn by the end of 2010, €11.6bn of which must be raised by the end of May, so that he can cover Greece’s ever-maturing debts.
Current property laws state that all home owners must pay taxes in accordance to the size of the rooms that are inside the home. Unscrupulous builders often help people evade this rule by making outdoor spaces that are then closed up after the land inspection has been and gone. This will lead to foreign investors getting an unexpected bill as they may be unaware of the ‘secret room’ and will thus be aware of the original tax amount.
Tax will vary from home to home depending on the size and the amount of rooms. A small two bedroom place with an undeclared room may incur tax of up to £600 whilst a more traditional holiday home, like a spacious villa, would incur larger costs going into the thousands.
These new laws are being enforced due to the economic crisis that is having a harrowing effect on Greece. The Greek government are now doing everything in their power to save the country from defaulting on its debt without having to rely on a eurozone bailout.
However, a worry is that the new tax could simply drive away foreign property investors who may see the tax as an unnecessary increase.