The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
You pay taxes on income earned by real estate (such as rent) where the above limit does not apply. This income is added to your total income (after deducting 10% for amortization) and has an additional charge of 3%. For example, if you gain a rent of 10,000 euros per year, 9,000 of them are added to your total taxable income and are taxed with your marginal rate (which might be from 0% up to 40%). Then you pay another 270 euros (3%) irrespectively of your marginal tax rate. So for a rent of 10,000 euros you might pay a tax of 3,870 euros (9,000X40% plus 3%).
You also pay two kinds of local government taxes. That depends on the municipality you leave but you should expect around 300-400 euros per year for a flat that can accommodate a middle-class pair and one or two children. Usually the one who lives in the flat pays this tax (be it home-owner or renter).
Then you pay a transactions tax when you buy real estate, which is quite a lot at 13% of the estimated value of the property.
The problem with real estate in Greece is not that it is not taxed, because there are quite a lot of taxes. It is that it is used to launder money by tax evaders. A provision of the freshly announced measured re-inforce that because for the next two years you won't asked where you did find the money to buy new housing property.
To conclude, you pay 13% of the estimated value of your property when you buy it, then you pay 1/1000-1/100 on its value per year afterwards, and of course you pay income taxes on rent earned (up to 40% but for middle incomes it is between 26% and 36%) plus local government taxes.
I hope that explains why real estate worth (estimated worth for tax purposes, to be precise, which might differ from commercial value) under 400,000 euros was not exempt from "large real estate tax".
"Eurozone leaders have turned a €50bn Greek solvency problem into a €1,000bn existential crisis for the European Union."
For comparison, the annual property tax on real estate in Colorado for a private house valued at about $230,000 is around $1200. This is on the low end of the tax scale in the U.S. There is no transaction tax involved in purchasing a house (other than some small fees), but if it increases in value during your ownership of it then you have to account for capital gains tax after selling.
Real estate scams here involve getting your property listed as agricultural or unimproved land, which have very low tax rates. This generally involves a shady deal with the local tax office, and is quite common.
Our transaction taxes in NY are relatively high. it takes about $8k to close, but most of those are fees for title searches, surveys, appraisals and the like. Only $2k of that goes to the state as tax.
Lastly, I believe federal law has changed now and homes that sell for under half a million are no longer subject to capital gains.
by Frank Schnittger - Mar 22 10 comments
by ARGeezer - Mar 17
by Frank Schnittger - Mar 17 15 comments
by gmoke - Mar 15 3 comments
by Frank Schnittger - Mar 8 21 comments
by Luis de Sousa - Mar 6 4 comments
by Frank Schnittger - Mar 9 25 comments
by Frank Schnittger - Mar 3 6 comments
by Frank Schnittger - Mar 2210 comments
by THE Twank - Mar 21
by ARGeezer - Mar 17
by Frank Schnittger - Mar 1715 comments
by THE Twank - Mar 172 comments
by gmoke - Mar 153 comments
by THE Twank - Mar 13
by Frank Schnittger - Mar 925 comments
by THE Twank - Mar 92 comments
by Frank Schnittger - Mar 821 comments
by Luis de Sousa - Mar 64 comments
by THE Twank - Mar 5
by Frank Schnittger - Mar 36 comments
by THE Twank - Mar 15 comments
by THE Twank - Feb 27
by ATinNM - Feb 2616 comments
by Frank Schnittger - Feb 2310 comments