The statement of Prime Minister Kyriakos Mitsotakis last summer from Astypalaia that: “a mistake was made with ENFIA. This is an injustice that will be corrected” was not an evasion to avoid the reactions of the municipal authority.
With a bill that is in public consultation, it is foreseen to review the zone prices in all areas that recorded excessive increases and that led to an unrealistic ENFIA. The Municipalities are therefore invited to proceed with objections until the end of the year and present their own opinion on the objective values that apply from January 1, 2022 in their area.
The draft law also freezes the VAT on real estate, the capital gains tax on real estate, while the discount on real estate renovations is maintained for another two years. The reduced VAT rates on transport, catering and coffee are also extended until June 2023. In particular, the tax bill provides for:
1. With article 34 of the bill, municipalities have the possibility, from 1 to 31 December 2022, to submit objections and submit their opinion on the objective values that apply from 1 January 2022 in their area. Based on the evidence submitted by the Municipalities, the Ministry of Finance will proceed with a redefinition of the objective values with the aim of reducing the prices in the areas where it will be established that the objective values are higher than the actual values. The corrections to the objective values will also lead to the reduction of the ENFIA. For example, the zone price in Astypalea from 650 euros per sq.m. jumped to 800-2,150 per sq.m.
2. The 24% VAT on real estate is frozen until the end of 2024. At the request of the building developer, the application of VAT on real estate is suspended, compulsorily until 31.12.2024, and real estate transfer tax is imposed. The suspension concerns all of the developer’s unused real estate. Suspensions granted with effect until 31.12.2022 are extended until 31.12.2024. It is noted that it is extremely possible that from 2025 the VAT on real estate will be zero or reduced.
3. The imposition of capital gains tax of 15% on the purchase and sale of real estate is suspended until December 31, 2024. The measure has been suspended since 2015 as difficulties and heaps of problems were found in its implementation that would cause serious side effects in the real estate market. Capital gains tax results from the sale of property at a price higher than the purchase price. The goodwill is determined based on depreciation rates depending on the years the taxpayer has held the property.
4. The 40% tax deduction for the costs paid by citizens for the energy, functional and aesthetic upgrading of their buildings is extended until the end of 2024. In particular, the personal income tax deduction is provided for building upgrade costs incurred up to and including December 31, 2024, instead of the planned date of December 31, 2022, distributed equally, as is currently the case, over a period of 4 tax years and for a maximum total amount of costs up to 16,000 euros. A necessary condition for the tax reduction is their proof through legal documents and their payment by electronic means of payment. The regulation is part of the incentives provided for the green transition of the economy and society.
5. The control by the Tax Administration is abolished in every case of the submission of an amending declaration of real estate transfer tax or an amending declaration of inheritance, donation and parental benefits tax resulting in a tax reduction of more than 300 euros, as well as in any subsequent amending declaration, regardless of the amount tax reduction. By decision of the AADE governor, the instruments, the conditions, the criteria, the manner, the procedure and any other necessary detail will be determined for the verification of the correctness and completeness of the submitted amending declarations of capital taxation, by which the taxable value is reduced.
6. VAT is reduced on transport, catering, coffee. Specifically, until June 30, 2023, the reduced VAT rates for certain goods and services are extended. The measure concerns:
– Transportation of persons and their luggage. The reduced VAT covers train, metro and tram tickets, city and intercity buses, air tickets, passenger ship tickets, transport by a combination of road, air and sea means.
– Public catering
– Non-alcoholic drinks (coffee, soft drinks) and sparkling water
– Hemodialysis materials, defibrillators, masks, antiseptics, personal hygiene and protection
– Cinema tickets,
– Zoo tickets,
– Services of gyms and dance schools.