8 ms·

Let's get facts straight. The state property tax in Greece is calculated on a nominal value far removed from market value. This means that a 300K nominal value

by cgio 10y ago

Let's get facts straight. The state property tax in Greece is calculated on a nominal value far removed from market value. This means that a 300K nominal value property cannot sell today for 150K (I know, I have tried.) In practice, as the article mentions property value approaches zero as the market is incredibly shallow. Recalculate on the basis of that and then make the comparison.

flexie 10y ago
I didn't pretend to describe all the rules in detail. In Denmark, property taxes are also calculated based on values that are not the current market value. Currently, 95% of Danes pay the state property tax based on a 2001/2002 value assessed by the tax authorities.
- mfukar 10y ago
  No, you just pretended that the state property tax is very close to 0%, without mentioning WHAT is taxed at "very little" 0%.
  - flexie 10y ago
    I didn't pretend anything. Even if your property is taxed at €500k although it's worth €250k, you are still paying very little compared to Denmark. And actually, it is close to zero. Many of my friends, all middle class, pay €5-10k per year in property taxes for what is really modest 100-150m2 apartments or houses in or around Copenhagen. Are you anywhere close to that in Athens?
    - mfukar 10y ago
      Yes, easily more than €5k/year for a 120m2 house. (not me actually, my parents, but I doubt they lie to me about how much they spend) Like others have already mentioned in other threads, land & property valuations are defined by the state, and are way inflated and unrealistic. On top of that, there's all these ridiculous things that contribute to the property tax, like how many streets neighbor the building, etc.
- cgio 10y ago
  2001/2 value assessment I would expect to be lower than current market price in Denmark?
  - flexie 10y ago
    It's really hard to say these days. Often it's lower, of course, sometimes it's higher.
  - mvindahl 10y ago
    In the larger cities, prices have surged over the past 15 years, in more remote areas, they have fallen slightly. There are plans on the table ATM to bring taxation in better line with valuation. As one may predict, this is not popular with city folks who imagined the tax rebate to be a perpetual thing.
charlesdm 10y ago
Sounds like a bargain. Why shouldn't I pick up a property in Athens, right now? Are you talking about prime property locations in Athens?
- kkapelon 10y ago
  Yes if you have the money now it is a good time to buy houses in Greece if you think that at some point the country will recover
- mikeash 10y ago
  For one thing, it sounds like you'll be paying taxes on an assessed value far in excess of what you actually paid to buy the property.
  - kkapelon 10y ago
    Exactly! I should better rephrase it "If you have money to burn now" and can wait until the country recovers.
  - charlesdm 10y ago
    I would assume one can challenge that valuation with the tax authority or through the courts. A building isn't actually worth €300k if it can't be sold for €300k. If I buy something from a third party for €100k today, it's worth exactly that.
    - mikeash 10y ago
      If it were that easy, everyone would do it and the problem would go away. Tax authorities are often unreasonable when it comes to property valuations.
      - charlesdm 10y ago
        Tax lawyers are expensive. If people can't even pay the tax, how would they afford a tax lawyer? I have achieved beneficial settlements with unreasonable tax collectors with a good lawyer, so often it is that easy.
guitarbill 10y ago
Who determines this "nominal value"? Sounds like a great business opportunity if it's far removed from market value...
- sliverstorm 10y ago
  If the market is perverted or highly irrational, it does make some sense. For example, just because there are no buyers on the market, doesn't mean your home has no value. (Think of black markets. It's hard to find a buyer, but the item definitely has value) And many governments depend in part on property taxes, it would be a double crisis if a perverse stagnant housing market also bankrupted your government. The scheme for a fair nominal value assessment does seem challenging to come up with, though. Perhaps you anchor your valuations in a past year, e.g. "what this house would have sold for in 2002".
  - notahacker 10y ago
    If it's a pure property tax (as opposed to a LVT) the simplest way to do it is to either (i) let the government set the taxable valuation but oblige them to buy the house at that price (plus a premium) if the owner disputes it or (ii) let the owner value the house but grant the government the right to buy the house at that valuation (plus a premium) if they dispute the valuation. Both options have the side effect of potentially adding a bit of liquidity to the housing market in a downturn.

by cgio 10y ago

flexie 10y ago

I didn't pretend to describe all the rules in detail. In Denmark, property taxes are also calculated based on values that are not the current market value. Currently, 95% of Danes pay the state property tax based on a 2001/2002 value assessed by the tax authorities.

mfukar 10y ago
No, you just pretended that the state property tax is very close to 0%, without mentioning WHAT is taxed at "very little" 0%.
- flexie 10y ago
  I didn't pretend anything. Even if your property is taxed at €500k although it's worth €250k, you are still paying very little compared to Denmark. And actually, it is close to zero. Many of my friends, all middle class, pay €5-10k per year in property taxes for what is really modest 100-150m2 apartments or houses in or around Copenhagen. Are you anywhere close to that in Athens?
  - mfukar 10y ago
    Yes, easily more than €5k/year for a 120m2 house. (not me actually, my parents, but I doubt they lie to me about how much they spend) Like others have already mentioned in other threads, land & property valuations are defined by the state, and are way inflated and unrealistic. On top of that, there's all these ridiculous things that contribute to the property tax, like how many streets neighbor the building, etc.
cgio 10y ago
2001/2 value assessment I would expect to be lower than current market price in Denmark?
- flexie 10y ago
  It's really hard to say these days. Often it's lower, of course, sometimes it's higher.
- mvindahl 10y ago
  In the larger cities, prices have surged over the past 15 years, in more remote areas, they have fallen slightly. There are plans on the table ATM to bring taxation in better line with valuation. As one may predict, this is not popular with city folks who imagined the tax rebate to be a perpetual thing.

charlesdm 10y ago

Sounds like a bargain. Why shouldn't I pick up a property in Athens, right now? Are you talking about prime property locations in Athens?

kkapelon 10y ago
Yes if you have the money now it is a good time to buy houses in Greece if you think that at some point the country will recover
mikeash 10y ago
For one thing, it sounds like you'll be paying taxes on an assessed value far in excess of what you actually paid to buy the property.
- kkapelon 10y ago
  Exactly! I should better rephrase it "If you have money to burn now" and can wait until the country recovers.
- charlesdm 10y ago
  I would assume one can challenge that valuation with the tax authority or through the courts. A building isn't actually worth €300k if it can't be sold for €300k. If I buy something from a third party for €100k today, it's worth exactly that.
  - mikeash 10y ago
    If it were that easy, everyone would do it and the problem would go away. Tax authorities are often unreasonable when it comes to property valuations.
    - charlesdm 10y ago
      Tax lawyers are expensive. If people can't even pay the tax, how would they afford a tax lawyer? I have achieved beneficial settlements with unreasonable tax collectors with a good lawyer, so often it is that easy.

guitarbill 10y ago

Who determines this "nominal value"? Sounds like a great business opportunity if it's far removed from market value...

sliverstorm 10y ago
If the market is perverted or highly irrational, it does make some sense. For example, just because there are no buyers on the market, doesn't mean your home has no value. (Think of black markets. It's hard to find a buyer, but the item definitely has value) And many governments depend in part on property taxes, it would be a double crisis if a perverse stagnant housing market also bankrupted your government. The scheme for a fair nominal value assessment does seem challenging to come up with, though. Perhaps you anchor your valuations in a past year, e.g. "what this house would have sold for in 2002".
- notahacker 10y ago
  If it's a pure property tax (as opposed to a LVT) the simplest way to do it is to either (i) let the government set the taxable valuation but oblige them to buy the house at that price (plus a premium) if the owner disputes it or (ii) let the owner value the house but grant the government the right to buy the house at that valuation (plus a premium) if they dispute the valuation. Both options have the side effect of potentially adding a bit of liquidity to the housing market in a downturn.