9 September 2010

'Foreigners' tax?

Several of the well known Corfu blogs are full of messages about a 'foreigners' tax, and whilst I would never say that something is firm and definite in Greece, we did make some enquiries from accountants and lawyers, who presumably know what they are talking about, and this was the end result:

This is a tax aimed at the multi-home owning set who declare miniscule incomes, NOT specifically at foreigners.

Property taxes are one of the few ways that the government can directly tax people who otherwise avoid taxation.

When you buy a property here you provide pink slips to prove that you brought the money into Greece legally and it is not laundered or the product of working here 'black.'

If you own a property you will be bound to prove that you have the money to support it, either legally earned and imported from your home country, or earned here via legal employment, or earned here from a legal EOT endorsed rental situation.

If you have a home here which you barely use, then your utility bills will support this, and you can provide them with your tax return.

If you declare income from your villa rental in your home country you should consult both a local accountant (which EVERYONE should have anyway) and an accountant in your home country, so that you do not end up with double taxation.

What we did not definitely establish was if this is ALREADY a law and will apply for the 2010 tax return, or if it will probably become law and therefore apply in 2011, or if it is still in the 'before parliament' stage - research into this continues.

The people who will have a problem are those who have bought properties and who support themselves entirely on income obtained here through casual labour, with no IKA or validated paperwork.

I cannot help but feel that people should expect some kinds of taxation on properties - Greece has never taxed property, which might be one of the reasons it has never managed to get a fair shake from all its citizens. Now the system will be that if you own property here, you will have to declare enough documented income to prove that you can support all your houses/cars/boats/swimming pools etc. It does not matter what nationality you are. In other European countries people always expect to pay some sort of property taxes, Greece is just catching up.

Research into the details of this is still in progress, but it is certainly not something which is just aimed to 'fleece' foreigners which seems to be the theme of some of the articles on blogs we have seen recently.