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Britons with property in Greece snagged by country's debt crisis as emergency levy includes foreign-based owners
Thousands of Britons with real estate in Greece have been caught up in the country's debt drama following the government's announcement of a new property tax touted as the only way of plugging a €2bn (£1.7bn) budget shortfall.
The emergency levy has sparked outrage, with tax experts estimating the extra expense will cost around €1,000 for the average household – on top of a barrage of other austerity measures.
"It is a dramatic step but with a knife up against our throat we had no other option," said the minister for rural development and food, Kostas Skandalidis, echoing the widespread disquiet the new tax has triggered among the ruling socialists. "I agree it is totally unfair," he said.
Tens of thousands of UK citizens have settled in Greece, with Corfu and Crete being especially popular among British retirees. In recent years, as laws have been relaxed and the bureaucracy simplified, the country has attracted a growing number of second-home owners lured by its myriad islands and unspoilt coasts.
The new duty – which has drawn comparisons to Margaret Thatcher's infamous poll tax – will be levied through electricity bills to insure that foreign-based owners are also included. It was announced after Athens's international creditors, the EU, European Central Bank (ECB) and International Monetary Fund (IMF), warned George Papandreou's crisis-hit government it would not receive further aid if fiscal targets weren't met.
At €8bn the loan – the sixth since Greece narrowly averted default with a €110bn bailout in May last year – is crucial to covering public sector wages and pensions in October. Unnerving Greek officials, eurozone finance ministers on Friday decided to delay a decision over the disbursement until next month.
With the country's budget deficit projected to be nearer 10% of GDP than 7.4% as originally thought, the move has piled the pressure on Papandreou to apply the levy immediately. "It is the only measure that can … produce results quickly because it does not depend on the [leaky] tax collecting mechanism," said the Greek finance minister Evangelos Venizelos.
But with thousands preparing to demonstrate against the levy on Sunday the backlash is bound to be fierce.
The government's abrupt decision to sharply increase rates – from a low of 50 cents to a high of €16.00 per square meter – barely three days after announcing the measure, has incensed Greeks with the increasingly powerful communist party appealing to people not to pay, and unions rallying against the measure.
Ex-pats resorted to internet sites on Friday in what appeared to be a desperate bid to understand the new law. "The Greek electricity company will not be blackmailed into doing this," said Nikos Fotopoulos who heads the public power corporation's militant union, Genop/Deh. "We will not turn off electricity supplies if this barbaric new tax is not paid. This company is not a tax collecting machine."
- European debt crisis
- Global economy
- European banks
- Currencies
- European Union
- IMF
- Real estate
- Financial crisis
- Greece
- Property
- Europe
Helena Smith
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