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In Greece, Property Is Debt

nytimes.com

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Re: In Greece, Property Is Debt

#211

Post by return0 »

charlesdm wrote: post #121
return0 wrote: post #119

Earlier quoted context omitted.

You're not wrong. Greece experienced a property bubble that is bursting painfully slowly. Homeownership is high in greece; it's part of the culture and successive governments protected it despite its heavy cost as a populist measure (e.g. by instituting laws that disallowed foreclosures). The bubble has not yet burst completely, that's why rent prices are very cheap.

Is it worth moving to Greece at this point if you have sufficient (ways of generating) capital to sustain your lifestyle? Or would that be a fools errand given the state of the economy?

Sure it is. Greece is still a very safe country with excellent climate. Avoid athens, the overcrowded center and heavily-hit by the crisis. You will find the cost of living is very cheap for a european country (provided that you have your own source of income as you said- don't rely on finding a job here)

Re: In Greece, Property Is Debt

#212

Post by Bartweiss »

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…

I think the answer to your first question is "if you put it up at public auction tomorrow, that would be totally illegal."

There are huge legal barriers to property sales, including requirements for energy audits and certification that the construction is wholly legal - which is probably isn't. Just like in the US, a great many safe and livable Greek properties violate zoning laws. Real assets are salable, but in this case the government has crippled the market's ability to clear.

All of which just reinforces your last point; the existing legal structure pretty much guarantees perpetual economic crisis.

Re: In Greece, Property Is Debt

#213

Post by Bartweiss »

return0 wrote: post #206
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…

So your house price went from EUR10000 (optimistic) to EUR 500000 (actual price 8 years ago , nowadays ~40% cheaper). You're still property-rich. why are you complaining?

Give the article another look.

There are huge legal barriers to property sales, including requirements for energy audits and certification that the construction is wholly legal - which is probably isn't. Just like in the US, a great many safe and livable Greek properties violate zoning laws.

Real assets are salable, but in this case the government has crippled the market's ability to clear. If your market can't clear, you can easily end up with a high value asset which is totally impossible to sell. That's the Greek situation, where the requirement to pay tax on a house doesn't mean it's actually possible to sell it for value.

Re: In Greece, Property Is Debt

#214

Post by jfoutz »

kkapelon wrote: post #126
flexie wrote: post #74

Let's get facts straight: The state property tax in Greece is 0% for property up to €200K. Then 0.2 to 1% from €200K to €5M. Then 2% above €2M. Property taxes are hardly killing the Greek economy and especially not for the poor or the middle class. On the contrary, Greeks are paying very little. The problem is that Greeks used to have much more property than for example Northern Europeans. For comparison, in Denmark…

Numbers don't really say anything if you don't explain who decides them. Here are two scenarios for you 1)I live in Greece and get 400 Euros a month and barely break even. I live in a house (inherited by my parents) that would fetch probably 90.000 in the market. Government says that it really costs 300.000 euros. I get taxed for it even though I cannot really afford it. 2)I am unemployed and live with my parents. Th…

You have no way to challenge the assessor? Here (U.S.) you could put together a book of 50-100 similar houses and their sale prices. Take that to court and have the house reassessed.

The US isn't corruption free, but in my limited experience, it's hard to have an assessment wildly out of line with reality, 3x would be hard to justify.

Re: In Greece, Property Is Debt

#215

Post by akytt »

crdoconnor wrote: post #191
sasvari wrote: post #187

Earlier quoted context omitted.

Personally I would vote for revolution - national default, totally new political leadership - and start to rebuild the country from scratch. Anything is better than decades of externally enforced austerity crippling a country's spirit as reflected in everything I read these days about Greece. Looking at the democratically elected politicians/governments in Greece in the last decades I don't know where a totally new p…

>It's not that the electorate didn't consistently vote for the political leaderships which are/were, at least partially, responsible for the situation Greece finds itself in right now. That isn't really true. In both of the previous elections they voted for parties promising to end austerity. In both cases it wasn't even as if the parties didn't want to end austerity but when they tried they were basically threatened…

Why is it that these people are nice and kind when they finance your government spending for decades but turn into facist greedy bastards when they come asking for their money back? That's what it boils down to.

Why is that that everybody else starting from EC and ECB and ending with corrupt polititians (who, it would seem, have magically appeared from amongst non-greek) is to blame but I'm yet to see any citizen taking responsibility. "Yes, it felt good voting for populists and enjoying massive social benefits from the state and not really having to pay taxes but now I have a hangover". That's democracy for you. Your right to vote comes with a responsibility for the consequences.

Re: In Greece, Property Is Debt

#216

Post by Bartweiss »

akytt wrote: post #192
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…

You sell the house. You have invested your money well, your property has increased in value. Congratulations! Now pay a bit of taxes to support the people who have not been as fortunate and stop complaining. Your property taxes are actually lower than in other countries by a margin, how can they be a problem, then? Quite frankly I think the notion of actually having to pay taxes has not been there for decades and it…

> You sell the house

This is a way bigger hurdle than anyone is making it out to be.

There are huge legal barriers to property sales, including requirements for energy audits and certification that the construction is wholly legal - which is probably isn't. Just like in the US, a great many safe and livable Greek properties violate zoning laws.

Why on earth are we assuming that Greece has smooth-running property markets that allow people to sell houses for their nominal (or any) value?

Re: In Greece, Property Is Debt

#217

Post by muse900 »

flexie wrote: post #74

Let's get facts straight: The state property tax in Greece is 0% for property up to €200K. Then 0.2 to 1% from €200K to €5M. Then 2% above €2M. Property taxes are hardly killing the Greek economy and especially not for the poor or the middle class. On the contrary, Greeks are paying very little. The problem is that Greeks used to have much more property than for example Northern Europeans. For comparison, in Denmark…

I won't agree with you just because you are presenting "some" numbers.

I know for a fact that my parents that live in Greece, and do not rent and own 3 flats and 1 house all of them divided equally to a different person within the family including me have to pay an "emergency" taxation on the electrical bill which is a lot of money. (A LOT OF MONEY!)

Atm my parents are pensioniers and they don't rent neither have any money in the bank. They are called out to pay 4000 euros / 2 months tax on the property they own. Eventually they will have to sell their property in order to be able to afford to live. Issue is that the market has crushed and the money they gonna make if they sell their property that has been with them from grandgrand parents and more which means sentimental value as well, is gonna be sold for pennies.

The problem is that people around the world don't understand that middle class Greeks are suffering for what "RICH" Greeks and politics have caused. Sure its middle class people that voted those politicians in and didnt hang them up including rich people but meh...

Seriously Rich people in Greece pay no tax and they don't care as well.

Dictatorship has been governing Greece for a very long time including now.

Btw sorry for coming strong on you, its just that your facts are literally off.

Re: In Greece, Property Is Debt

#218

Post by nitrogen »

antisthenes wrote: post #178
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…

Out of all the scenarios you posted, this is actually the easiest to solve: > 3) I am 75 years old living with my wife who is 70 years old in the house that we bought in 1950. We are both retired farmers. Our pension is 500 euros in total. In 1950 the area we selected for our house turned out to be a popular one (in 1950 it was just an empty field). Government passes the law and our house has a value of 500.000 (beca…

I want to make explicit the sentiment that I think underlies some of the comments here. For much of Western human existence, families could own, inherit, and stay in one place for generations. But now, catastrophic value inflation, property taxes, eminent domain, etc. threaten that expectation of stability. It shouldn't be surprising that people who don't value a migratory lifestyle are upset by being forced to abandon what they see as their little demesne.

Re: In Greece, Property Is Debt

#219

Post by crdoconnor »

akytt wrote: post #215
crdoconnor wrote: post #191

Earlier quoted context omitted.

>It's not that the electorate didn't consistently vote for the political leaderships which are/were, at least partially, responsible for the situation Greece finds itself in right now. That isn't really true. In both of the previous elections they voted for parties promising to end austerity. In both cases it wasn't even as if the parties didn't want to end austerity but when they tried they were basically threatened…

Why is it that these people are nice and kind when they finance your government spending for decades but turn into facist greedy bastards when they come asking for their money back? That's what it boils down to. Why is that that everybody else starting from EC and ECB and ending with corrupt polititians (who, it would seem, have magically appeared from amongst non-greek) is to blame but I'm yet to see any citizen tak…

>Why is it that these people are nice and kind when they finance your government spending for decades but turn into facist greedy bastards when they come asking for their money back?

They're not trying to get their money back. They're simply taking the reins of power and threatening economic catastrophe if they're disobeyed.

It ought to be obvious to anybody with a functioning brain that Greece is not paying down its debts and that the European Commissions directives are clearly not about making Greece more able to do so.

The question you have to ask yourself then is, what are they asking of Greece? Because it's definitely not when are they going to pay us back?

>That's democracy for you.

It's democracy when you inadvertently voted for somebody who handed the reins of power over to a foreign country. That's the transition of democracy to dictatorship.

>Your right to vote comes with a responsibility for the consequences.

Which country do you exercise your vote in?

Re: In Greece, Property Is Debt

#220

Post by return0 »

Bartweiss wrote: post #213
return0 wrote: post #206

Earlier quoted context omitted.

So your house price went from EUR10000 (optimistic) to EUR 500000 (actual price 8 years ago , nowadays ~40% cheaper). You're still property-rich. why are you complaining?

Give the article another look. There are huge legal barriers to property sales, including requirements for energy audits and certification that the construction is wholly legal - which is probably isn't. Just like in the US, a great many safe and livable Greek properties violate zoning laws. Real assets are salable, but in this case the government has crippled the market's ability to clear. If your market can't clear…

Yes transactions costs are high in greece, but it's not what stopping people from buying. Prices are still too high. Rental yields do not justify buying at this time[1], even for newer constructions that are 100% legal. While the government could certainly reduce transaction costs, the homeowners themselves are sabotaging the market[2].

FYI i live in greece and could not afford a house during the boom years. Now i can but it's just a bad deal. It's cheaper to rent.

1. http://www.globalpropertyguide.com/Europe/Greece/Rental-Yiel...

2. http://www.tornosnews.gr/en/greek-news/society/19928-new-yor...

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