Although it was long known that this dire day would arrive when another EEC nail would be driven into the coffin of Greek individuality, it was received with bewilderment. To make the adjustment easier, VAT had already been postponed, but the unreadiness of the country was just what it had been a year before.
The government has been roundly accused of not presenting small businesses in particular with clear guidelines, but Greeks make a habit of leaving things to the last moment and then depending on ingenuity to muddle through.
It is not so long ago when petty business in rural areas was tallied up on an abacus; nevertheless, the computeraki has been around for quite a while, even if it is kept under its plastic wrapper to keep it from getting dusty. Cash registers, however, which record taxes with individual sales, are not so common. Hence the headscratching.
New methods introduced for a certain purpose – like hazard lights – find curious application in Greece, and VAT is no exception. Intended to absorb a variety of older tarrifs into a simplified form of indirect taxation, in many transactions VAT has been superimposed on the taxes it was intended to replace, thus giving “added” a new meaning.
Since many a wily buyer foresaw this, there was a huge turn-of-the-year rush on the markets not seen since Chernobyl. As now the issuing of timologia (invoices) with VAT added must accompany all home deliveries, even supermarkets have stopped making them and many a heel was lost by the high-stepping ladies of Kolonaki struggling up the slippery slopes of Lycabettos with cases of Don Perignon and Dr Ballad’s pet food.
Hard on the heels of VAT came another, even more agonizing period of readjustment. VAT is a Western European phenomenon guided more or less by logic, but the government’s new rent control policy, based on land values, is of Levantine complexity. Calculated to appease tenants and landlords, it has managed, unsurprisingly, to alienate both. It takes the sorts of calculation which perhaps the old Middle Eastern abacus was better adjusted to.
In the present case, Athens has been rather arbitrarily divided into 200-some districts defining what a property is worth per square metre. As much of the city is not at all clearly divided into rich, middle class and poor districts, the values seem to have been largely pulled out of a hat. By taking 6.5 percent of this stated value one arrives at the maximum rent ceiling per annum per square metre.
All things in Greece, however, not being equal, many adjustments must then be made, as, to begin with, the number of the floor and the age of the building. As so many Athenians have spent much of their lives in unfinished housing or added floors a decade apart, it is no easy matter to say how old a particular building is. The government has decided that living on the first floor represents the average and the other floors must be adjusted to it. However, as many other Athenians live perched on steep slopes, it is often difficult to say where the first floor is.
So, suppose that you live on Messogeion Avenue in Aghia Paraskevi. Here the property value has
been set at 60,000 drachmas a square metre. Applying the 6.5 percent rate, the rent ceiling is about 3,900 drachmas per square metre. For simplicity’s sake, let us say your family occupies 100 square metres. Thus, the rent will be 390,000 drachmas per annum or 32,000 a month.
This assumes, however, that your flat is new and occupies the first floor. What if you live on the sixth floor of a 15-year-old building? All you have to do is adjust a depreciation rate which is .98 on the first year, .90 on each of the next five years, .80 on each of the five years after that and .70 on the last four. As for the floor you are on, just make a higher evaluation for each floor above or lower for each floor under at a rate varying, for some inscrutable reason, between 1.05 and 1.15. On no account, be warned, can it be over 20 percent going up, even if you have a penthouse on Athens Tower – or over 10 percent going down, even if you live in the Kifissos riverbed.
But this is only the beginning. A landlord must take into consideration the amount of property he has around the units which he rents. He must also take under account if his property is diatiriteo (slated for preservation), paradosiaka (traditional – whatever that may mean) or simply unfinished. Also he must judge if his property has commercial value or residential value or both, and, if both, to what degree. Then, if he is a co-owner, there are a whole set of other calculations to be made.
If you have any questions, your local tax office is there to help. Meanwhile, it might be a good idea to hook up your abacus to a monitor screen. And a bottle of VAT 69 at one’s elbow may come in handy, too.
