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In Greece, Property Is Debt

nytimes.com

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Re: In Greece, Property Is Debt

#151

Post by sliverstorm »

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…

Corrupt tax valuations are a problem, but it's practically one of the tenants of property tax that it is supposed to elbow you out if you can't afford the tax. It's not "nice" to say, but one of the purposes of property tax is to serve as a market force to encourage better usage of valuable land.

Re: In Greece, Property Is Debt

#152

Post by mikeash »

charlesdm wrote: post #114
cgio wrote: post #80

Earlier quoted context omitted.

Let's get facts straight. The state property tax in Greece is calculated on a nominal value far removed from market value. This means that a 300K nominal value property cannot sell today for 150K (I know, I have tried.) In practice, as the article mentions property value approaches zero as the market is incredibly shallow. Recalculate on the basis of that and then make the comparison.

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.

Re: In Greece, Property Is Debt

#153

Post by kkapelon »

nugget wrote: post #142
kkapelon wrote: post #126

Earlier quoted context omitted.

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…

Wouldn't the solution in either case be to sell the house and move somewhere you can find a job?

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 house for no particular reason.

Also if it was that easy to move somewhere else and find a job, you would have done it already (you would not wait for the government to create this tax and then think about it)

Here is a third scenario for you reading pleasure

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 (because of the area around it). Now out of the blue we have to pay property tax. What do we do?

Re: In Greece, Property Is Debt

#154

Post by kkapelon »

branchless wrote: post #149
kkapelon wrote: post #126

Earlier quoted context omitted.

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…

Ah won't anyone think of the unskilled person who inherited money and wants to continue to live well? Let this guy stay on this land and make the people who worked hard pay!

If you think that you live well with 400 euros a month, then I rest my case.

Re: In Greece, Property Is Debt

#155

Post by sliverstorm »

guitarbill wrote: post #117
cgio wrote: post #80

Earlier quoted context omitted.

Let's get facts straight. The state property tax in Greece is calculated on a nominal value far removed from market value. This means that a 300K nominal value property cannot sell today for 150K (I know, I have tried.) In practice, as the article mentions property value approaches zero as the market is incredibly shallow. Recalculate on the basis of that and then make the comparison.

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 scheme for a fair nominal value assessment does seem challenging to come up with, though. Perhaps you anchor your valuations in a past year, e.g. "what this house would have sold for in 2002".

Re: In Greece, Property Is Debt

#156

Post by tech2 »

nugget wrote: post #142
kkapelon wrote: post #126

Earlier quoted context omitted.

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…

Wouldn't the solution in either case be to sell the house and move somewhere you can find a job?

Given the current issues in the Greek economy, it's unlikely you'll find a buyer since:

* people can't afford it for themselves

* won't buy-to-let (because people can't afford the rental)

* won't buy-to-invest since there's a worry about market or government collapse and loss of investment

Re: In Greece, Property Is Debt

#157

Post by sliverstorm »

Spooky23 wrote: post #113
liotier wrote: post #78

Earlier quoted context omitted.

Energy performance certificate, non-toxicity certificate, surface certificate, non-pledge certificate... The basics of a real estate sale in France - they make the transaction more transparent and I'm glad they are mandatory, both as a former buyer and a former seller... They remove a lot of the friction that distrust creates. Framing it as "red tape" that “threaten to turn the country into an endless ‘property grave…

That statement is a little dramatic, but these sorts of things have severe impact. Upstate NY is a great example -- property taxes are oppressive, and while property does sell, the value is kneecapped because the tax costs are so high. In my city, a house in a nice area valued at $200k (which is a 3-4 BR, 1-2 BA house) is taxed around $6000-6500. So a typical homebuyer who needs a mortgage automatically loses around…

The first part at least sounds like things are working like they are supposed to work. The same thing happens with interest rates. But we wouldn't say interest rates "kneecap" property value, would we? They're just a fact of the market, and mostly just alter where the money flows to. The buyer commits to $1,000/mo in payments- with high interest, the bank gets more and the seller gets less. With low interest, the bank gets less and the seller gets more.

Why is there little incentive to maintain property? Just because it's worth "only" $200k?

Re: In Greece, Property Is Debt

#158

Post by kkapelon »

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.

Exactly! I should better rephrase it "If you have money to burn now" and can wait until the country recovers.

Re: In Greece, Property Is Debt

#159

Post by nugget »

kkapelon wrote: post #153
nugget wrote: post #142

Earlier quoted context omitted.

Wouldn't the solution in either case be to sell the house and move somewhere you can find a job?

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, Germany, France? Certainly there must be places in the EU where the economy is better and there are more opportunities. People have been migrating around the world chasing economic opportunities for thousands of years. A million Syrians just traveled through Greece on their way north in search of this.

> Government passes the law and our house has a value of 500.000 (because of the area around it). Now out of the blue we have to pay property tax. What do we do?

It seems that what has effectively happened is that the Greek Government has decided to confiscate a large part of the country's wealth through extremely high property tax rates. As other posters on this thread have mentioned, if the tax rate is 1% but the appraised value is 3x the actual market value, then the real tax rate is 3% and your Government is just playing games to try and hide the confiscation.

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.

Re: In Greece, Property Is Debt

#160

Post by wu-ikkyu »

hx87 wrote: post #141
wu-ikkyu wrote: post #48

Earlier quoted context omitted.

>Does anyone have access to the world government dev environment The banks with super admin privileges to create money in their databases do.

If everybody had an account with the central banks, sure. For now the SUs only have access to the major-banks sandbox, and playing around in this sandbox does nothing except cause asset inflation.

The 2008 bailout and subsequent legislation[1] indicates it is the major-banks (i.e. JP Morgan, BOA) which have the leverage to create money at will over the central-banks (i.e. the Fed). Hence the term "Too Big to Fail" -- de facto SUs.

Doesn't the major-banks' sandbox extend across the world to any person or government who accepts the dollar?

[1]http://www.businessinsider.com/congressional-budget-makes-ro...

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