To declare it or not to the tax office?
All you need to know about outdoor spaces and playrooms.
By mid January 2010, when the six month period in force expires, after publication in the Official Gazette (122A/21-7-2009) of the new Law 3775/2009, hundreds of thousands of homeowners can apply to «settle» their cases concerning semi-open spaces and ancillary spaces.
The process begins in the coming days. The agony, of course, of all parties is whether, by declaring to the Planning Authorities and paying extra tax, they will be released forever or they may be asked to pay again if the state has cash problems. The political leadership, in by passing this law can state that the property owners will not be asked to pay again, however, as the Greek government is not the most credible, we must all hold some reservations.
However, the Minister said, when asked about that, that those who settled their cases in the past weren’t asked to pay again and they have nothing to fear as the same thing will happen now.
Those, however, who are not convinced, will live with the fear of possible complaints from bad neighbours. The «bs» currently presents a guide with the help of tax advisors and Vice President of PEFE, Mr. Orestes Seimenis, giving answers to questions that owners need to know before rushing to “declare it themselves”.
1. How many locations (semi-open spaces, playrooms, parking spaces and stores) are closed awaiting to be legalized?
· 1,500,000 (semi-open)
· stores and garage
· 100.000 attics and lofts
There lives families with a population of around 6-7 million people.
2. What areas are entitled to be legalized?
The problem lies mainly on areas built after 1983. These locations are:
- semi-open sites
- Enclosed spaces above the ground level which have changed use (i.e. covered parking spaces, which in practice have been transformed into shops and apartments).
- Enclosed underground spaces not counted in the rate structure and have changed use (e.g. underground warehouse converted into a house).
These facilities are in the approved planning design of the volume of the building. That is, they are beyond the perimeter of the building.
3. Can attics, lofts, rooms, enclosed balconies, terraces and closed pilotes be “settled?”
Illegal attics, lofts, rooms, enclosed balconies, terraces and closed pilotes, even if they are not protruded from the perimeter of the building. Also they are beyond this settlement the projection arrangement of buildings, the enclosed balconies (not listed in the building permit) because they are not included in the volume of the building construction and are not listed in the legal construction projects. These facilities fall under the law concerning arbitrary planning and building.
4. How can we deal in the future with semi-open spaces as far as their taxation concerned?
The semi-open spaces in the future will be treated according to their use.
5. After «settlement» can semi-open spaces be transferred?
· Notaries argue that in order for the enclosed spaces to be transferred, there should be clear provision of the law. If not, they will not be specified in the contract.
· If the Planning Authority gives a “settlement certificate”, the transfer can be done with this document. The description of the property in the contract will state that the site was a semi-open space and has changed use and settled on the basis of the law.
6. Will the taxpayer be charged tax transfer?
In the past, no. If the site was provided to the owner by parental transfer or by purchase, inheritance or by gift, there will not be any tax due.
But if the property is transferred in the future (from now on) it will be charged tax transfer as a whole, i.e. the “arranged” space.
7. What happens if a neighbour objects to the “settlement” I do?
The regulation covers us from our neighbours, who will be unable to complain to Urban Authorities about other neighbours.
8. Will the owner be charged E.T.A.K. (The Single End Real Estate) because of this “regulation”?
Yes. The value of semi-open space is included in the value of the main property and all this must be the 0.1% E.T.A.K. (The Single End Real Estate). However, it will not be in force retrospectively.
9. What about the E9 Form?
Those who settle the semi-open space should on 1/1/2010 add it to E9, presenting its new use. So, on the surface of the main area of the department they will add the square metres of the surface of the semi-open space, garage or warehouse, which have changed use (and which in E9 had been previously declared as facilities). Therefore, we must correct the E9 Form. Some had previously stated in the E9 Form their semi-open space as facilities in order to legitimize the semi-open space. They need to make a statement and change E9 Form and carry it on the main sites. After that the taxpayers will have to pay increased E.T.A.K. (The Single End Real Estate).
10. What charges will we have from the municipal taxes?
Municipalities have two types of charges:
· Fees for Cleaning and Lighting
The underground and ground floor spaces are registered at a large percentage to Local Authorities and therefore they are burdened with TAP and municipal taxes.
If, however, they have not been included, the local authority will ask taxpayers to make an additional statement of the semi-open sites. However they should not ask them to pay any taxes retroactively.
11. Will the spaces which will be “settled” be stated in the Land Registries and Real Estate Offices?
By “settlement” we will have transformed the auxiliary use to primary use. However, there will be no millimetres for the space after the settlement. This means they will not be declared in the Land Registries.
12. Can the spaces, which will be subject to the rules, get a mortgage for a loan?
Probably not, because the sites may not increase the percentage of land area.
13. If someone has a case pending in Planning Authorities (e.g. a complaint) and pay fines for building and maintenance will he be in the regulation and will he pay the same?
He will also be charged the same percentage that is 10%. But they will have to suspend any proceedings for payment or fines. We need clarification from the Ministry if the “settlement” stops all pending criminal proceedings and penalties. We will not pay the fine imposed for maintenance.
14. Can anyone get back fines for construction and maintenance already paid?
No, fines which have been paid, cannot be reimbursed
15. If someone, buying the property, has paid transfer tax also for the semi-open space, will he get the money back after the settlement?
No, the tax is not refundable, nor will they counterbalance the tax of 10% by “legalizing” it.
16. In a building is there a possibility of reallocating the millimetres and change the relationship of the owners?
HELLENIC PROPERTY FEDERATION (POMIDA) says that the new rules do not affect the participation of horizontal ownership shares in the tenancy joint expenses of the building.
This is obvious, since a precise recommendation on the regulation of the building exists. For the overwhelming majority of cases, these locations were always included in the allocation of public spending of the building as enclosed spaces (if their building had been determined since the design phase of the building). Moreover, the sites are by rule allocated to all horizontal ownership shares so that in practice, there will be no real need to differentiate the rates of individual properties in the public expenditure of the whole building.
17. Can I.K.A. (Social Insurance Institute) request retroactive contributions for the closure of the semi-open space?
No. This Law is co-signed by the Ministry of Employment and Social Protection, just to rule out such a retroactive charge to owners. Thus, it can be claimed back from I.K.A, (Social Insurance Institute) even if they had paid social security contributions during the construction of the space in the past.
18. Will there be a problem on how the “property was owned» by increasing the square meters after the “settlement”?
Sure. After the settlement the square metres increase in the control area of “how the property was owned”. In other words: if the principal residence exceeds
19. If after the settlement, we have parental benefit, what is the way it will be written in the contracts?
Notaries will indicate in the contract of transfer that it has changed use and has been “settled”.
20. If someone does not “settle” the semi-open space, what consequences will he suffer?
If the Planning Board checks the space, they will impose increased fines, that is, fine for construction (30% of the appraisal value) and fine for maintenance (5% of the appraisal value each year).
21. How much will the owners pay and how much will the state estimate to collect?
The expected revenue is 2 billion euros in 2009 and 2 billion in 2010 for 1.500.000 sites. An average apartment has 10 -14 meters of semi-open spaces. Each owner will pay 1.000 -1.800 euros. The proceeds will be many, also from the legalization of the change of use of garages and warehouses. Also, the state will receive more money because semi-open areas from 1985 to 2000 were twice the amount in surface (40%) than after 2000, when they covered only 20% of the rate structure.
22. Who will pay half of the contribution to “settle”?
Large families will pay 50% of the levy for semi-open spaces. It remains to be clarified, however, if people who have three children are included.
23. How to estimate the levy?
It is estimated as 10% of the price per square area. The price band is the same for the building. We will not take into account the floor where the semi-open spaces are neither the age of them.
24. By what process will the”settlement” be?
What documents will be needed?
- An application along with the specified documents (solemn declaration of the individual concerned, a brief description of the area, number of building permit, plan of the area, deposit) within six months of the law.
- The date is reduced to 4 months for those who send the documents by registered letter.
- The application will be submitted to the Urban Service on the basis of price band applicable to the area of the property.
- If there are deficiencies, they must be arranged within 15 days.
- 250-350 euro deposit, which is non-refundable but it is counterbalanced with the levy imposed.
- The Office ensures and sends within 40 days a special form to the owner mentioning the levy 10%, minus the deposit (250-350).
25. Making a payment? Is there a discount?
The owner can make the payment:
• Within one year from the force of the law, or paying cash with 10% discount or
• In three instalments, the first of which must be paid in the first nine months since the law was enacted and within the last 12 months since the law was in force.
26. After the payment of the fine, what form will the owner have?
There is a “settlement certificate” provided for the contract of the transfer of property. In this certificate they will not state “it is excluded from Demolition” because something like that would mean legalization.
27. What will the owner pay as a total amount for the “settlement”?
· A contribution of 10% of the value of the space “settled”. For example for a semi-open space of 15 sq.m in Daphne with appraisal value 1.300 euros the fine will be 1.950 euros. For a semi-open space of 15 sq.m in Halandri, with appraisal value 2.650 euros, the fine will be 3.975 euros.
· Pay any engineer to be involved (20% of the minimum fee applicable to study building permits as engineering fees). Minimum pay 220 euros.
· The 250 euro deposit for semi-open locations and 350 euros for above ground and underground enclosed spaces (will be counterbalanced later with the 10% contribution).
· Contribution to the Urban Service for E.T.E.R.P.S. (Special Fund for the Implementation of Regulatory and Urban Plans).
28. Can the owner avoid service fees and engineering fees?
We can submit a simple photocopy of the approved plan to the Town Planning Authorities. The plan shows the approved area. In other cases, engineering services may be necessary. This will show if we are thorough and keep our design plans when we bought the apartment from the manufacturer.
29. Can an Urban Authority Official enter my house and check if I have an enclosed area?
Not without a prosecutor.
30. What building permits are affected by the regulation?
The settlement applies to permits issued by 2.7.2009.
Those issued afterwards, although their studies have been made according to the construction conditions which were already in effect, are excluded.