Jump to content
House Price Crash Forum
Sign in to follow this  
newbie

Property Tax

Recommended Posts

The Greek property tax passed today. In summary, it seems to have the following features. (Useful link)

1. It will range from EUR0.50 per square metre per annum to EUR16.00 per square metre per annum depending on the neighbourhood.

2. The age of the property will influence the rate, with new properties being taxed up to 25% more. So the maximum rate for a new build in a top area will be EUR 20 per metre.

3. it will cover all other residential or commercial buildings that receive electricity (so there's an option to opt out if you generate your own or prefer candles).

4. It will be collected through electricity bills so the sanction for non-payment will be having one's electricity cut-off.

5. It won't apply to state offices, embassies, religious buildings, monasteries, non-profit organisations, charities and amateur sports clubs. It also won't apply to farms and factories.

6. Long-term unemployed will be exempt from the tax, if their family income doesn't exceed 12,000 euros a year and the value of their property does not exceed EUR 150,000.

No doubt it will be passed straight on to renters under any well drafted lease.

Is this the model for future property taxes elsewhere?

How would you feel about something similar in the UK if it come down to a choice between this or more VAT or more income tax?

Edited by newbie

Share this post


Link to post
Share on other sites

The Greek property tax passed today. In summary, it seems to have the following features. (Useful link)

1. It will range from EUR0.50 per square metre per annum to EUR16.00 per square metre per annum depending on the neighbourhood.

2. The age of the property will influence the rate, with new properties being taxed up to 25% more. So the maximum rate for a new build in a top area will be EUR 20 per metre.

3. it will cover all other residential or commercial buildings that receive electricity (so there's an option to opt out if you generate your own or prefer candles).

4. It will be collected through electricity bills so the sanction for non-payment will be having one's electricity cut-off.

5. It won't apply to state offices, embassies, religious buildings, monasteries, non-profit organisations, charities and amateur sports clubs. It also won't apply to farms and factories.

6. Long-term unemployed will be exempt from the tax, if their family income doesn't exceed 12,000 euros a year and the value of their property does not exceed EUR 150,000.

No doubt it will be passed straight on to renters under any well drafted lease.

Is this the model for future property taxes elsewhere?

How would you feel about something similar in the UK if it come down to a choice between this or more VAT or more income tax?

No doubt they will try, and no doubt they will fail.

Taxes can't just be passed on by consumers to producers. Both sides take a hit, and in the case of a proper LVT, it is the landlord who pays the majority.

No, it doesn't matter who actually fills out the check to the tax man, and it certainly isn't something that can be drafted into a contract.

Having said that, I think this tax sounds disastrously badly planned.

Exemption for farms and religious buildings? Nothing ambiguous about that then!

Share this post


Link to post
Share on other sites

The Greek property tax passed today. In summary, it seems to have the following features. (Useful link)

1. It will range from EUR0.50 per square metre per annum to EUR16.00 per square metre per annum depending on the neighbourhood.

2. The age of the property will influence the rate, with new properties being taxed up to 25% more. So the maximum rate for a new build in a top area will be EUR 20 per metre.

3. it will cover all other residential or commercial buildings that receive electricity (so there's an option to opt out if you generate your own or prefer candles).

4. It will be collected through electricity bills so the sanction for non-payment will be having one's electricity cut-off.

5. It won't apply to state offices, embassies, religious buildings, monasteries, non-profit organisations, charities and amateur sports clubs. It also won't apply to farms and factories.

6. Long-term unemployed will be exempt from the tax, if their family income doesn't exceed 12,000 euros a year and the value of their property does not exceed EUR 150,000.

No doubt it will be passed straight on to renters under any well drafted lease.

Is this the model for future property taxes elsewhere?

How would you feel about something similar in the UK if it come down to a choice between this or more VAT or more income tax?

I was listening to a story about this tax on National Public Radio (I am American and live in the US) today. Everyone over there is quite unhappy about it. A spokesman for an electric company was interviewed and said that a publically held electric company should not be forced by the government to act as a tax collector. Many workers in Greece have recently had their pay cut by a third or more during austerity cuts and thus they cannot afford to pay this new tax along with their mortgage.

I assume that Greece did not have a property tax before this. Please correct me if I am wrong. According to this, if one owns a 1,000 square foot residence, they will pay a property tax of about 2,000 euro per year. I believe that this is quite a hefty tax for the people there to pay, and is quite out of the ordinary for Europe as European property taxes are generally much lower than those in the US annd Canada.

The UK has a property tax, does it not? Why do you ask if something similiar were to be imposed in the UK instead of a VAT increase?

Edited by james7

Share this post


Link to post
Share on other sites

If this happened here I'd start looking at solar panels and going off grid. That or start my own religion, the cheeky uckers.

What do you mean IF?

Share this post


Link to post
Share on other sites

The UK has a property tax, does it not? Why do you ask if something similiar were to be imposed in the UK instead of a VAT increase?

No. UK business has property taxes, but for residential the nearest is "council tax", which is loosely tied to occupation (not ownership) of property, and is particularly iniquitious because it rewards hoarders of empty property.

Share this post


Link to post
Share on other sites

I already pay £140 per month in council tax. 2k Euros would be close to a prob for us at the moment. That would double the council tax.

Then again the Greeks dont pay tax so this is a way of collecting tax. Then again you need to be earning enough money to pay tax.

This is what I think is wrong with all these "austerity" measures, they need to be sliding - not just put on straight away without any ability to plan for it.

Share this post


Link to post
Share on other sites

No doubt they will try, and no doubt they will fail.

Taxes can't just be passed on by consumers to producers. Both sides take a hit, and in the case of a proper LVT, it is the landlord who pays the majority.

No, it doesn't matter who actually fills out the check to the tax man, and it certainly isn't something that can be drafted into a contract.

Doesn't have to be in the contract - effectively it's just a big increase in the electricity bill, which the tenant would be paying anyway.

I would expect landlords to be totally unaffected, with tenants paying the full amount.

Share this post


Link to post
Share on other sites

I already pay £140 per month in council tax. 2k Euros would be close to a prob for us at the moment. That would double the council tax.

Then again the Greeks dont pay tax so this is a way of collecting tax. Then again you need to be earning enough money to pay tax.

This is what I think is wrong with all these "austerity" measures, they need to be sliding - not just put on straight away without any ability to plan for it.

Sure they'll be sliding. The creditors will force hikes when it proves to have worked.

Share this post


Link to post
Share on other sites

If this is levied on the plot, then they are going to have more riots on their hands. A not unreasonable 500 sqm family home could cost 10K euros a year - that is a lot of coin to find overnight. Even a fairly small 250 sqm plot in a decent area will cost 5K euros. If it is on the floor area of the house, then it will be smaller, but it is still equivalent to doubling the council tax.

The electricity bill is madness. In Greece (where the sun shines for most of the year), I would instantly go off grid and install about 10 kW of Solar - would probably cost about 25k eur, and I'd probably start to supply the neighbours as well.

This is also politically insane. They are going to default, no doubt about it, so this money is just going to pay the ECB. They would have a better chance of public support if they did this after defaulting.

Share this post


Link to post
Share on other sites

If this is levied on the plot, then they are going to have more riots on their hands. A not unreasonable 500 sqm family home could cost 10K euros a year - that is a lot of coin to find overnight. Even a fairly small 250 sqm plot in a decent area will cost 5K euros. If it is on the floor area of the house, then it will be smaller, but it is still equivalent to doubling the council tax.

Not a problem, just knock down and rebuild the house, grand designs stylee

hsvspace.jpg

Edited by Tamara De Lempicka

Share this post


Link to post
Share on other sites

Doesn't have to be in the contract - effectively it's just a big increase in the electricity bill, which the tenant would be paying anyway.

I would expect landlords to be totally unaffected, with tenants paying the full amount.

No. As has been explained many times before, it never works like this.

Alternatively, a marginal tax on consumption will shift the demand curve to the left; when other things remain equal, this will increase the price paid by consumers and decrease the price received by sellers by the same amount as if the tax had been imposed on the sellers, although in this case, the price received by the sellers would be the new market price. The end result is that no matter who is taxed, the price sellers receive will decrease and the price consumers pay will increase.

Depending on the price elasticities of demand and supply, who bears more of the tax or who receives more of the subsidy may differ. Where the supply curve is more inelastic than the demand curve, producers bear more of the tax and receive more of the subsidy than consumers as the difference between the price producers receive and the initial market price is greater than the difference borne by consumers. Where the demand curve is more inelastic than the supply curve, the consumers bear more of the tax and receive more of the subsidy as the difference between the price consumers pay and the initial market price is greater than the difference borne by producers.

Link

If this were not the case, then business would not care about government taxation of their products.

Share this post


Link to post
Share on other sites

6. Long-term unemployed will be exempt from the tax, if their family income doesn't exceed 12,000 euros a year and the value of their property does not exceed EUR 150,000.

I heard from news report that even surgeons and lawyers in Greece only have reported income of E12000.

I am curious how many will pay up..

Share this post


Link to post
Share on other sites

I heard from news report that even surgeons and lawyers in Greece only have reported income of E12000.

I am curious how many will pay up..

same as in Italy. That includes goldsmiths and everyone with a family business.

******ing bastards.

Share this post


Link to post
Share on other sites

3. it will cover all other residential or commercial buildings that receive electricity (so there's an option to opt out if you generate your own or prefer candles).

4. It will be collected through electricity bills so the sanction for non-payment will be having one's electricity cut-off.

How would you feel about something similar in the UK if it come down to a choice between this or more VAT or more income tax?

Solar electric to soar in Greece then.

In a way this will be good for Greece - getting them really into solar.

Share this post


Link to post
Share on other sites

Lol on paper every greek makes 12k on paper, they just did this to get more bailout money until the next time. Oh to be greek, retire early after a nice cosy job and live out my life in the sun like a politician but without the sun.

Share this post


Link to post
Share on other sites

No. As has been explained many times before, it never works like this.

Indeed, increased costs/taxes tend to dissapate amougst all parties involved in a transaction chain. Its a kind of Economic osmosis caused by everyone always trying to squese thier costs and maximise thier revenue.

In this case affordability of rents will go down in some proportion to a renters increased cost of living such that both parties end up taking a hit.

Really it annoys me that such simple concepts have to continually spelt out to supposedly intelligent HPC readers.

Edited by goldbug9999

Share this post


Link to post
Share on other sites

Indeed, increased costs/taxes tend to dissapate amougst all parties involved in a transaction chain. Its a kind of Economic osmosis caused by everyone always trying to squese thier costs and maximise thier revenue.

In this case affordability of rents will go down in some proportion to a renters increased cost of living such that both parties end up taking a hit.

Really it annoys me that such simple concepts have to continually spelt out to supposedly intelligent HPC readers.

Just to continue some thoughts in this direction ... its the same reason why it doesnt actually matter who pays taxes in any given transaction chain i.e. corporates/companies vs employees or consumers. The most effecient way to tax is at a single point in the chain and the economic osmosis do the cost spreading. For example abolish VAT and have a single consumer sales tax. Abolish employers NI and move it to income tax etc etc

Share this post


Link to post
Share on other sites

No. As has been explained many times before, it never works like this.

Link

If this were not the case, then business would not care about government taxation of their products.

I totally agee the economic effect if a normal good is taxed, but here I'm not so sure - since there is no substitute good as both renting and buying are being taxed.

As the tax is proportionate to property size, the incentive is that people are encouraged to rent or buy smaller properties, so arguably that's good news for landlords of small properties, bad news for landlords of big ones, but is it neutral to landlords overall?

I'll think on it further...

Share this post


Link to post
Share on other sites

Indeed, increased costs/taxes tend to dissapate amougst all parties involved in a transaction chain. Its a kind of Economic osmosis caused by everyone always trying to squese thier costs and maximise thier revenue.

In this case affordability of rents will go down in some proportion to a renters increased cost of living such that both parties end up taking a hit.

Really it annoys me that such simple concepts have to continually spelt out to supposedly intelligent HPC readers.

More than likely the landlord will end up eating all the costs, they'll already be charging full market rates so the tenant won't be able to afford any more.

Think of it like business rates, the price of commercial property in the UK is depressed in comparison to residential because it's more heavily taxed, this is no problem for the tenant.

Personally I'd intorduce a landlord tax and have done with, these scumbags are getting money for nothing as it is.

Share this post


Link to post
Share on other sites

I totally agee the economic effect if a normal good is taxed, but here I'm not so sure - since there is no substitute good as both renting and buying are being taxed.

As the tax is proportionate to property size, the incentive is that people are encouraged to rent or buy smaller properties, so arguably that's good news for landlords of small properties, bad news for landlords of big ones, but is it neutral to landlords overall?

I'll think on it further...

It reduces the rent they'll be able to charge in proportion to their total holdings. It seems like quite a light tax though, if it was heavier I'd expect the larger plots to perhaps be split up into more manageable chunks.

Edited by Authoritarian

Share this post


Link to post
Share on other sites

If this is levied on the plot, then they are going to have more riots on their hands. A not unreasonable 500 sqm family home could cost 10K euros a year - that is a lot of coin to find overnight. Even a fairly small 250 sqm plot in a decent area will cost 5K euros. If it is on the floor area of the house, then it will be smaller, but it is still equivalent to doubling the council tax.

The electricity bill is madness. In Greece (where the sun shines for most of the year), I would instantly go off grid and install about 10 kW of Solar - would probably cost about 25k eur, and I'd probably start to supply the neighbours as well.

This is also politically insane. They are going to default, no doubt about it, so this money is just going to pay the ECB. They would have a better chance of public support if they did this after defaulting.

You can't go off grid with your own solar/wind without at least having a backup generator. Battery packs won't do and you will find generating from your diesel generator very expensive. Your probably looking at 900 litres of fuel a year plus generator cost & depreciation & maintenance

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.