Following the tax relief for young people, workers, professionals, retirees and property owners announced by Prime Minister Kyriakos Mitsotakis from the podium of the Thessaloniki International Fair, the government is now turning its attention to solving the housing crisis.
Read: “Battle” for closed properties: Key step in the plan to tackle the housing crisis
Housing issue: New measures for tenants and owners reduce taxes and property fees
Specifically, the reduction of tax on rental income, the permanent return of one month’s rent per year to tenants, and the abolition of property tax in settlements with up to 1,500 residents constitute measures aimed at reducing burdens for owners and tenants, with the ultimate goal of increasing the supply of affordable housing.
This involves reducing the tax rate to 25% from 35% for rental income ranging from €12,000 to €24,000, as well as the complete abolition by 2027 (50% reduction in 2026) of property tax in settlements under 1,500 inhabitants. The government is also studying the extension of the ban on new short-term rentals to new areas of Athens in an attempt to decompress the housing market from factors that intensify supply shortages and increase prices.
What will apply to social contribution schemes
The next front of interventions will be social contribution schemes as well as regulations that will allow servicers to put houses they own on the market, but whose sale faces obstacles. These servicer properties are estimated at over 30,000, a number sufficient to provide relief to a market facing severe supply constraints.
Of course, the most substantial intervention for increasing housing supply will be social contribution schemes. The bill passed this week opens the way for the government to proceed rapidly with implementing what it provides. The new law utilizes public properties that remain unexploited. Private contractors will take them over through tenders to build new apartments, of which at least 30% will be at the disposal of the public sector to lease at low rent to young people, families and vulnerable households.
Defense Ministry properties for housing needs and social housing
The remaining apartments will be made available for sale in the market by contractors, increasing the housing stock. The areas that will be announced for the social contribution scheme belong to the Hellenic Public Properties Company. Among these are also properties of the Ministry of National Defense such as inactive military camps. In the specific properties of the Ministry of National Defense, 25% of the houses to be built will cover the housing needs of the Armed Forces while 75% will be allocated for social housing.
The Hellenic Public Properties Company is expected to make available 6,500 properties that can immediately enter the market. For this purpose, according to plans that have been drawn up, the former CHROMOPEI industrial complex can be utilized, owned by the National Organization for Medicines at 62 Pireos Avenue in Piraeus with an area of 17,893 sq.m., the two EFKA plots in Argyroupoli on Cyprus Avenue with a total area of 2,375 sq.m., the first Anatolia factory in Nea Ionia with 18,000 sq.m. buildings belonging to the Hellenic Public Properties Company as well as YFANET in Toumba Thessaloniki with a total area of 19,500 sq.m.
Military camps for housing: 2,000 new apartments in Athens, Thessaloniki and Patras
Characteristic examples of military camps that will be utilized to increase housing stock are those announced by the Prime Minister at the Thessaloniki International Fair. The Karaiskakis Camp in Haidari, Attica, with an area of 145 acres, where 696 apartments will be built (58 buildings of 12 apartments each). The Ziakas Camp in the Municipality of Kordelio-Evosmos in Thessaloniki, with an area of 128 acres, where 600 apartments will be created (50 buildings of 12 apartments each) and the Manousogiannakis Camp in Patras, with an area of 150 acres, where 720 apartments will be built (60 complexes of 12 apartments). In these areas, but also at other points in the country, a total of 2,000 apartments are planned to be constructed.
