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In Greece, Property Is Debt

nytimes.com

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Re: In Greece, Property Is Debt

#161

Post by kkapelon »

cpr wrote: post #137

Gee, in the US, all property is debt as well. (Property tax.) So you don't really own your property--if you fail to pay, you will ultimately lose possession. http://taxation.lawyers.com/property-tax/when-you-cant-pay-y...

The problem with Greece was that the property tax was introduced out of the blue leaving a lot of home owners un-prepared.

Let's say that in the US you buy a house, get a loan and your payment is $1000 a month. You make your calculations and think that you are ok for the next 10-20 years. You even have some slack and can afford a payment of $1200

You move into the house and the next day a new law passes and a new tax is introduced that will cost you extra $600 a month for the house you just bought.

How would you feel?

If the property tax in Greece was introduced in a gradual way complaints would be less.

Re: In Greece, Property Is Debt

#162

Post by tome »

dozzie wrote: post #118
dan1234 wrote: post #115

Earlier quoted context omitted.

The UK also has a Stamp Duty tax when property is purchased. https://en.wikipedia.org/wiki/Stamp_duty_in_the_United_Kingd...

Which is a tax on selling the property, not on merely owning it, and I believe it's the latter we're talking about here.

> Which is a tax on selling the property, not on merely owning it

FWIW it's a tax on buying, not selling, though I imagine it's much the same thing.

Re: In Greece, Property Is Debt

#163

Post by charlesdm »

mikeash wrote: post #152
charlesdm wrote: post #114

Earlier quoted context omitted.

Sounds like a bargain. Why shouldn't I pick up a property in Athens, right now? Are you talking about prime property locations in Athens?

For one thing, it sounds like you'll be paying taxes on an assessed value far in excess of what you actually paid to buy the property.

I would assume one can challenge that valuation with the tax authority or through the courts. A building isn't actually worth €300k if it can't be sold for €300k. If I buy something from a third party for €100k today, it's worth exactly that.

Re: In Greece, Property Is Debt

#164

Post by lifeisstillgood »

DanielBMarkham wrote: post #122
lifeisstillgood wrote: post #67

Earlier quoted context omitted.

That is the generally accepted view of the Greek crisis in much of Europe - The Euro hid huge debts in the same way securitised debt did in US. People would lend (via bonds) to risky countries (Greece and Spain) at the same EuroBond rate they lent to less risky countries (Germany, and well just Germany). And Greece took this and spent - at first on good infrastructure but slowly on low performing roads to nowhere and…

Total outsider and novice here, but from what you're describing, it seems that Greece has to leave the Euro and default on its debts. If people are electing leaders who have no control over finances, there's no democracy at work. Horrible thing to have happen in the birthplace of democracy. The EU was sort of a beta version of a United Europe. They weren't as luck as the U.S., where a highly educated but small group…

> Greece has to leave the Euro and default on its debts.

pretty much

> architecture astronaut syndrome

Not really. It started well. The Euro currency was the great achilles heel, as it meant there MUST be fiscal harmonisation between countries that were arguing over the amount of meat in a sausage. That said the more I learn about USA and the states, especially the southern states, the more I realise we need things like TIPP and TPP and the WTO. The states generally hate being in a federal system.

I would try and listen to Yanis Varoufakis stuff online. (https://yanisvaroufakis.eu/ is his blog but there is a lot there with little organisation)

Is in favour of defeating Pikkety with UBI:

https://www.project-syndicate.org/commentary/basic-income-fu...

Re: In Greece, Property Is Debt

#165

Post by notahacker »

sliverstorm wrote: post #155
guitarbill wrote: post #117

Earlier quoted context omitted.

Who determines this "nominal value"? Sounds like a great business opportunity if it's far removed from market value...

If the market is perverted or highly irrational, it does make some sense. For example, just because there are no buyers on the market, doesn't mean your home has no value. (Think of black markets. It's hard to find a buyer, but the item definitely has value) And many governments depend in part on property taxes, it would be a double crisis if a perverse stagnant housing market also bankrupted your government. The sch…

If it's a pure property tax (as opposed to a LVT) the simplest way to do it is to either (i) let the government set the taxable valuation but oblige them to buy the house at that price (plus a premium) if the owner disputes it or (ii) let the owner value the house but grant the government the right to buy the house at that valuation (plus a premium) if they dispute the valuation.

Both options have the side effect of potentially adding a bit of liquidity to the housing market in a downturn.

Re: In Greece, Property Is Debt

#166

Post by mikeash »

charlesdm wrote: post #163
mikeash wrote: post #152

Earlier quoted context omitted.

For one thing, it sounds like you'll be paying taxes on an assessed value far in excess of what you actually paid to buy the property.

I would assume one can challenge that valuation with the tax authority or through the courts. A building isn't actually worth €300k if it can't be sold for €300k. If I buy something from a third party for €100k today, it's worth exactly that.

If it were that easy, everyone would do it and the problem would go away. Tax authorities are often unreasonable when it comes to property valuations.

Re: In Greece, Property Is Debt

#167

Post by nradov »

pjmorris wrote: post #59
cloudjacker wrote: post #30

Earlier quoted context omitted.

Where have you been for the whole decade There is no self determination possible for Greece

It is astonishingly sad to me that the country from which Democracy was exported no longer has a say (or do they?)

Greece does have a say. They can choose to secede from the EU, drop out of the Euro, and default on their debts. And then they'll have to live with the consequences. But democracy doesn't mean they can vote to force other countries to forgive their debts.

Re: In Greece, Property Is Debt

#168

Post by charlesdm »

mikeash wrote: post #166
charlesdm wrote: post #163

Earlier quoted context omitted.

I would assume one can challenge that valuation with the tax authority or through the courts. A building isn't actually worth €300k if it can't be sold for €300k. If I buy something from a third party for €100k today, it's worth exactly that.

If it were that easy, everyone would do it and the problem would go away. Tax authorities are often unreasonable when it comes to property valuations.

Tax lawyers are expensive. If people can't even pay the tax, how would they afford a tax lawyer? I have achieved beneficial settlements with unreasonable tax collectors with a good lawyer, so often it is that easy.

Re: In Greece, Property Is Debt

#169

Post by Ntrails »

nugget wrote: post #159
kkapelon wrote: post #153

Earlier quoted context omitted.

Nobody would buy the house (apart from foreigners) because it is now linked to the tax that everybody wants to avoid. Also cash flow is a big problem for everybody so it is hard to find somebody that has 90.000 in cash and also willing to buy it. Move to where? Another city? Another country? Unemployment is everywhere in Greece. I am not even mentioning the sentimental factor of being forced to sell your parents hous…

> Nobody would buy the house If you put this hypothetical 90k euro house up for sale at a public auction tomorrow, what would it sell for? 50k? 70k? Real assets are usually sale-able, albeit perhaps for less than the owner thinks the asset is worth. > Move to where? Another city? Another country? Unemployment is everywhere in Greece. Since Greece is still in the EU, you can move to any member country right? UK, Germa…

> Personally I would vote for revolution - national default, totally new political leadership

They tried that. Turns out politicians aren't actually very trustworthy...

Re: In Greece, Property Is Debt

#170

Post by mikeash »

charlesdm wrote: post #168
mikeash wrote: post #166

Earlier quoted context omitted.

If it were that easy, everyone would do it and the problem would go away. Tax authorities are often unreasonable when it comes to property valuations.

Tax lawyers are expensive. If people can't even pay the tax, how would they afford a tax lawyer? I have achieved beneficial settlements with unreasonable tax collectors with a good lawyer, so often it is that easy.

In Greece?
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