The ongoing cuts in real estate rents and the compensation of property owners, the significant changes in planning legislation, but also the general developments in the real estate market and the country’s economy due to the ongoing pandemic, were the main topics of the 38th annual POMIDA conference held and broadcast online on Saturday, 30.1.2021, with the participation of representatives of the Government, the Opposition, political parties, executives and members of its unions from all over the country.
The President of POMIDA Mr. Stratos Paradias in his introductory speech stressed the following:
The pandemic and its ongoing consequences had among its first victims private real estate. The process of supporting closed and affected businesses and households that are renting, by forcing a reduction in the rents paid at the expense of their landlords, has brought hardship and even despair to heavily taxed landlords, those who have rents as their sole means of survival and those who have increased current tax and debt obligations.
POMIDA from the beginning, with perseverance and patience, asked the Government to return to the owners as tax-free compensation 50% of the reduction, so that the remaining 50% would be borne by society as a whole. This was eventually accepted in two phases, firstly by offsetting 30% and then by paying 50%. What proved to be the most difficult task for the State was the design and management of the procedure for the declaration, settlement and reimbursement of these compensations, due to the wide range of cases of reimbursement declarations, arbitrary rent reductions by ineligible tenants, or late declarations to landlords, following the expiry of the deadline for the landlord to declare compensation.
So to date we have a large number of refunds and payments, but also a lot of outstanding debts even from March, with no offsetting, but unfortunately also no response. Outstanding issues for which a new deadline for corrective or even initial declarations should be given, if justified, in order to avoid losing money due to all kinds of errors by owners and/or tax advisors or loss of the short deadlines that applied to these declarations. In particular, in cases of late notification of tenants of their suspension, it should be expressly provided that no rent reduction will apply if, when the landlord is notified of this, the deadline for the landlord to submit a COVID declaration has already expired.
Also, the Ministry of Employment and Social Affairs should immediately address both the complete disregard for informing landlords about the exact details of employee suspensions through the ERGANI system, and the ongoing collusion of many employers and employees to place them in a virtual suspension of a few days, in order to deceive both the landlords of their homes and the State.
Now that we have even passed to a total rent cut in certain categories of leases, the situation of the landlords who are suffering them, without any suspension of their obligations so far, will become tragic if our proposal for immediate confirmation of the validity of each COVID declaration at the time of submission is not adopted, so that the landlords know that they are indeed entitled to and will receive the compensation that corresponds to them.
The Minister of Finance, Mr. Christos Staikouras presented the measures taken by the government both before the pandemic and during the crisis to compensate the owners and expressed the thanks of the government and the ministry to the owners for the high sense of social responsibility they have shown. He presented the timetable for offsets and compensation for loss of income from commercial and residential rentals and called on those landlords who have not provided the IBAN of their bank account to do so through the “personalized information”, in order to be credited with the amounts due to them.
Specifically, for the beneficiaries of the November-December two-month period, the refund process, he said, has begun and will continue in February, while for the January and February reductions, the process begins 15 days after the deadline for filing the Covid return and is completed within 30 days of the deadline.
Mr. Staikouras acknowledged the rightness of the request of POMIDA to officially disclose the Activity Code Numbers for which the reductions apply in January and pledged that the issue will be settled within the week while for the delays in compensation of owners the Minister stressed that the cross-checks in relation to real estate are very difficult, so it was decided to pay compensation directly to the accounts of owners instead of offsetting against tax liabilities. He also reiterated that the updating of property values throughout the country will proceed in order to adjust them to real prices.
The former Deputy Minister of Finance, representative of the opposition, Mr. Tryphon Alexiadis recalled that SYRIZA as a government proceeded to reduce ENFIA, gave a solution for the unpaid rent based on the proposals of POMIDA, legislated the regulation of the obligations of owners in up to 120 installments, regulated the purchase of short-term leases and introduced full exemption from municipal taxes for properties that have never been electrified, while limiting the need to issue an electronic building identification card only at the time of transfer, eliminating the periodicity of inspections. He also called for low and middle incomes to be made a priority of government policy.
The MP of Kinal Mr. Michalis Katrinis called unthinkable the harmonization of property values with commercial values, which he said would push up property taxes. He also asked for an extension of the deadlines for both arbitrary and electronic ID cards and undeclared square footage.
The Minister of Labour and Social Affairs, Mr. Kostis Hatzidakis, responding to a relevant remark by the President of POMIDA in relation to complaints of abuse of the measure of suspension of employment contracts, to the detriment of both property owners and the State, said that immediate measures will be taken to ensure transparency as the government’s goal is to support the really affected businesses and their employees. Mr. Hatzidakis recalled the measures taken during his tenure at the Ministry of Environment and Energy, highlighting, among others, the regulations on forest maps, building identity and especially the “Dissolved Property” which was a proposal of POMIDA, the Land Registry where significant progress was recorded as the cadastral registration increased from 28% to 65%, the reintroduction of the institution of the transfer of the building factor and the end of years of hostage taking of owners of expropriated properties. The minister particularly referred to the program “Economize – Autonomo” which, as he recalled, was launched during his ministry in 2009 in cooperation with POMIDA and supports both the owners and the construction industry and the protection of the environment.
The Minister of Development and Investment Mr. Adonis Georgiades stressed in his address that if the pandemic had not set in, the government would have implemented a more aggressive tax reduction policy. “If we have wronged you I apologise, we have tried to keep the economy alive. Communication is constant and protects us from mistakes. We will continue in the same spirit in the coming years, with respect for private property and the public interest,” he said.
The Deputy Minister of Environment and Energy, Mr. Nikos Tagaras stressed that with the electronic building identity card that will be implemented from next Monday, February 1, the cost is reduced and the quality of service to citizens is improved. He clarified that engineering certificates issued until 31 January are valid for a two-month transitional period, i.e. until 31 March. He also announced the implementation of a program to support owners of listed buildings with funding from the Recovery Fund in the first phase for the insurance of these buildings, while he noted that this category of owners will also benefit from the institution of the transfer of the building factor.
The State Secretary for Digital Governance, Mr. George Georgantas added that the implementation of digital property transfer will be piloted after March and stressed that the government has given tangible signs of fighting bureaucracy and simplifying procedures
The State Secretary for Digital Governance, Mr. George Stylios said that in 2021 almost all the mortgage offices will be transformed into cadastral offices and the number of cadastral services provided online will be expanded. Also, with funding from the Recovery Fund, the digitisation of the mortgage offices’ archives will proceed.
The Deputy Minister of Interior, responsible for Macedonia and Thrace, Mr. Stavros Kalafatis in his address to the POMIDA conference stressed that he closely monitors its work both in Thessaloniki and Northern Greece and throughout the country and is willing to contribute as much as he can to solving the problems of the owners, as was done in the period of N. 4178/2013.
The Governor of the Hellenic Revenue Service, Mr. George Pitsilis informed that more than 70% of rent reduction declarations for the period March – August 2020 have been accepted, while for November the accepted declarations are estimated to exceed 75% as there are far fewer errors than in previous months. He noted that the Authority has started a technical dialogue with POMIDA for individual problems of property owners and announced that a new application is being prepared for the declaration of rental data and the digitization of property transfer tax returns, with the aim of completing the process within the day.
The Governor of Attica, Mr. George Patoulis noted that the pandemic is an opportunity for the real estate sector to orient itself towards a new model of investment in high yielding real estate.
The mayor of Athens Mr. Kostas Bakoyannis stressed that modern Municipalities are engaged in a race for tourists and investors and presented the investment program of the Municipality for upgrading areas such as Alexandra Avenue, Botanikos and the Theatre Square. He also reiterated his commitment that when the conditions allow it, he will reduce the municipal property taxes of the Municipality of Athens.
The Mayor of Vari-Voula-Vouliagmeni Mr. Grigoris Konstantellos, who represented the Central Union of Municipalities of Greece, and as chairman of the Institutions and Transparency Committee of the KEDE, said that the Board of Directors of the KEDE has already accepted unanimously the proposal of POMIDA for the reopening of the platform for declarations of undeclared surfaces. He also announced that he will recommend to the competent bodies of the KEDE the acceptance of the main demands of POMIDA which is the automatic cessation of charging municipal fees for vacant and unpowered properties from the day of the power cut, the reduction of surcharges and fines for late declarations of areas with a limit of 50% and the reduction of the limitation period of debts to the Municipalities from 20 to 5 years, as is the case for debts to the State.
The Director General of the Land Registry, Mr. Stefanos Kotsolis presented the new digital services provided by the Cadastre to professionals and citizens, while he announced that last week the first electronic transfer of property transfer was carried out in cooperation with the Notary Association.
The Member of Parliament of the New Democracy Mr. Vassilis Spanakis pointed out the need to improve the system of determining property values by creating more zones within each municipality, as well as to address the injustices suffered by landlords in the process of rent reductions and to review the additional tax of ENFIA.
On other topical issues, our objectives and proposals for the next period are briefly as follows:
FOR PROPERTY LEASES: Exclude any consideration of a return to rent controls by prohibiting the enforcement of court orders or forced extensions of any category of lease for any period of time after the end of the pandemic.
ON CAPITAL TAXATION: Abolition of the additional tax of ENFIA, as recommended by the IOBE and the Pissarides Commission, and “PASSPACE” any increase in the property values of real estate in urban areas, with parallel inclusion in the system of off-plan properties and buildings that essentially escape taxation.
IN INCOME TAX: Reduce the tax rates of the rental scale to reasonable levels and make permanent the abolition of the special levy.
MUNICIPAL TAXES: The immediate reopening of the platform for municipal taxes with new rules, as a permanent communication tool for property owners throughout the country and the Greeks living abroad with the revenue services of the country’s municipalities, and the limitation of the statute of limitations on debts to five years. In non-electrified properties, the exemption from the fees should be automatic when the electricity supply is cut off, if the property is not used.
BUILDING REFURNISHMENT: Include the cost of materials in the tax-exempt amount of building renovation and energy saving measures.
ON ELECTRONIC IDENTIFICATION: The parallel validity of the engineer’s certificate should continue until the end of the pandemic, because under the current conditions it is practically impossible to collect the required numerous drawings, certificates, autopsies, etc.
ON THE OWNERSHIP PROBLEM: To be solved immediately for the off-plan properties with a time limitation of the right of the State, which today can and does claim everything from everyone and forever, sending tens of thousands of owners to committees and courts in endless procedures that last for generations.
IN THE TIMETATOLOGY: Legislate the right of citizens not only for compensation but also for the return of their property, after the expiry of the above mentioned deadline for judicial correction of initial records. To modernise the land registration legislation in the Dodecanese, so that property rights are not lost due to shortcomings and peculiarities of Italian legislation that are still in force today.
IN FOREST MAPS: to recognise all legal property rights and to enable any aggrieved owner to appeal and defend their rights at every stage of the process of their publication and validation.
In the management of multiple dwellings: to simplify the procedure for obtaining a VAT number for management, with exemption from any obligation to submit unnecessary annual tax returns, independent taxation of any income and exemption from the typical obligation to declare in the E9 of common storage facilities, parking spaces, etc. without millimeters and exclusive use.
TO THE RESCUED: The State to fulfil its constitutional obligations towards them by establishing effective incentives for their rescue.
IN REAL ESTATE CONTRACTS: to reduce the hitherto invincible bureaucracy that turns every notarial act into a Golgotha for contracting parties and notaries.
LEGAL APPEAL FOR THE RENT REDUCTION: On the relevant question of many of our members for the possibility of a legal claim for full compensation of landlords from the reduction of rents, the position of POMIDA, as stated by the special rapporteur at the Conference Lawyer and President of Property Owners Volos Ms. Neocleia Kratira is as follows:
As we know, under the Constitution, every citizen is entitled to free access to justice to claim his or her rights. It is obvious that the body that has the competence and legitimate interest to take legal action on this problem is none other than POMIDA. However, according to the scientific opinion of the legal staff who examined the issue, with the data so far, not only do the conditions for any kind of successful appeals on this issue, but there is an immediate and obvious risk of creating unfavorable case law against us from such moves, as has unfortunately happened repeatedly in the past.
It is therefore obvious that any initiative on our part to take legal action and raise hopes for compensation would be very tempting for our organisation, but damaging and ineffective for our members, who have trusted us for decades because they know that they will only learn the truth from us. However, POMIDA, which with its hard struggle and its continuous interventions succeeded in convincing the government to return a significant part of the reductions as tax-free compensation, will not encourage or prevent any owner to claim his rights in any way that each one prefers, bearing in mind our above remarks.
Then the attending tax experts Mr. George Christopoulos, Mr. Antonis Mouzakis and Mr. Alkiviadis Kofos gave an extensive analysis of the compensation procedure for property owners and their subsequent tax obligations. The President of the Panhellenic Association of Owners of Listed Buildings and Monuments, Professor Plutarchos Giannopoulos, referred to the failure of the state to take and implement any measure in favour of the owners, as required by the Constitution and the International Convention of Granada, resulting in the almost complete abandonment of the approximately 20,000 listed buildings in our country.
The delegates were also informed about the energy supply programs (electricity and gas) with preferential terms through the cooperation of POMIDA with Protergia of Mytilineou Group and the building insurance program of POMIDA with INTERAMERICAN.