Greek Australians face tax increases on overseas properties

Greece's deputy foreign minister, Konstantinos Tsiaras, has denied that Australian Greeks will have their income taxed twice but says they may pay higher taxes on their properties in Greece.

Speaking from Sydney, Tsiaras said Greeks in Australia would pay a higher rate of tax on property owned in Greece and on any rental income or potential income as part of Greece's tough austerity measures.

An Australian lawyer based in Greece, John Tripidakis, told Property Observer the Greek government will be changing property tax laws so the tax-free threshold on property will be reduced to €50,000, with the remaining value of the property taxed on a progressive scale.

“This law will increase significantly the property tax that owners of properties are paying and of course affects significantly Greek Australians who own properties in Greece through inheritance, parental gift or even through purchase,” Tripidakis said.

He says these planned changes have already affected the property market in Greece.

“With regard to the real estate agents, the truth is that the real estate market has frozen and only a few conveyances take place. Many properties remain unsold, while many are putting their properties for sale in order to avoid the heavy property taxes,” he says.

Tripidakis says if Greek Australians lodge the right paperwork they won’t be liable for having their Australian income taxed twice.

“The goal of the Greek Government is not of course to impose double tax to those who claim to be foreign residents, but to reveal those who falsely claim that they reside abroad to reduce their Greek taxes,” he says.

“Although there is pressure to change this law after the protests from the Greek Federations from all over the world, this is what Greek law provides at this moment.”

The proposed austerity measures have been temporarily postponed and may even be scrapped depending on how Greece performs.

''We believe the stabilisation program that we have followed for about five months now will give us much better economic indicators,'' Tsiaras said in a speech reported by Fairfax Media.

''By the end of the year, we are going to turn the corner.''

In 2011, Property Observer reported Australian citizens who own property in Greece would be forced to pay up to $2,000 a year in taxes, following the passing of a new, hugely unpopular property tax measure.

The new tax law required that anyone who owns property in Greece be forced to pay an annual tax levy of €1,000 to €1,500 a year.

The tax was set to begin in 2014, and would be included in power bills with failure to pay resulting in the electricity being cut off.

About 70% of Greeks own their own homes and have over €400 billion ($553 billion) invested in property, greater than the country’s sovereign debt of €350 billion ($480 billion).

According to the 2011 census there are nearly 100,000 Greek-born people living in Australia and almost 400,000 people of Greek descent.

Photo of Athens courtesy of Flickr.