Member News

Update on Property Tax Issues: April 2019

The EACC, in partnership with the International Property Tax Institute (IPTI), wants to keep its members up to date with the latest developments in property taxes in the USA and Europe. IPTI has put together a selection of brief reports from articles contained in IPTI Xtracts which can be found on its website (



New York: New York State’s 2 percent tax cap, first signed into law in 2011 and renewed periodically since then, is now permanent.

Governor Andrew Cuomo included making the cap permanent in his 2019-2020 state budget, and the State Legislature obliged. Mr. Cuomo’s office says the tax cap has already saved taxpayers $24.4 billion since it was first implemented in 2012.

The tax cap restricts the annual growth of a local government or school district’s tax levy to 2 percent or the rate of inflation, whichever is lower. A number of other factors go into calculating an individual municipality’s cap in a given fiscal year, such as the value of new homes and commercial buildings added to the tax rolls, so the cap can actually exceed 2 percent.

A school district can pierce the cap if a 60 percent supermajority of voters approves, as opposed to the simple majority of 50 percent plus one vote that is normally required to adopt a budget. However, the state has offered an extra incentive to stay within the cap: tax rebate checks for qualifying property-tax payers living in districts that complied with the cap.

“We drew a line in the sand with the cap so that families wouldn’t be priced out of their homes and to make our state more business friendly,” State Assemblyman Fred W. Thiele Jr. of Sag Harbor said in a statement. “The cap makes New York more affordable and has saved homeowners thousands of dollars.”


Texas: Texas Considers Options for Reducing Property Taxes

The Texas legislature is considering two pieces of legislation (Senate Bill 2 and Senate Joint Resolution 76) which are aimed at reducing local property tax burdens. SB 2 would cap property tax levy increases at 2.5 percent, while SJR 76 aims to mitigate property taxes by shifting part of the burden to sales taxes instead. Leaders are likely considering this tax swap in addition to the cap as a strategy to address voters’ complaints about property taxes.

We can break down property tax limitations into three main categories: assessment limits, rate limits, and levy limits. SB 2 is a levy limit, which means it limits how much revenue the school district can collect to an annual growth factor of 2.5 percent (down from a current cap of 8 percent). If a district wishes to impose property taxes at a rate which would bring in collections more than 2.5 percent higher than the previous year’s collections, the decision automatically passes to the public through a tax ratification election. Levy limits constrain the total revenue a government entity can bring in, but still allow individual taxpayers’ burdens to rise if their property values increase faster than those of surrounding properties.

Forty-six states, including Texas, have passed some form of property tax limitation; Texas is one of nine states which already implement all three categories. Texas’s assessment limits control how much a property’s assessed value can change from year to year. That kind of limit protects certain taxpayers but causes large distortions in tax rates between otherwise similar properties based on date of construction (or improvement) or sale. Texas’s rate limit, which is the most straightforward category of property tax limitation, limits the tax to $8 for every $1,000 of property on a municipal and county level. School districts are limited to $10.40, or 66.67 percent of the previous year’s rate plus 0.4 mills if the previous rate was lower than 15 mills.

SJR 76 proposes a tax swap via a constitutional amendment, under which the state would reduce property tax payments by increasing the sales and use tax. It caps the state sales tax at 6.25 percent for general fund purposes, with any portion of the rate in excess of 6.25 percent dedicated to education with a property tax offset.

A tax swap from one level of government to another—and one category of taxes to another—is often logistically challenging. The amendment itself leaves the mechanics up to the legislature, so we do not yet know how revenue would be distributed, or how a property tax reduction would be assured. Although SB 2 would impose a statutory constraint on local governments’ ability to raise rates back to their former levels without voter approval, some jurisdictions might seek to restore property taxes to something approaching their former level even with the new state-supplied revenue. Even if those rates don’t reach past levels, the increase would mean that residents are ultimately paying more in combined state and local taxes than they were.

The resolution doesn’t address how it’s divvying up the funds raised by the sales tax. Would revenue sharing be based on past property tax collections, population, the location where the sales taxes are collected, or some other formula? Under some methods, districts which previously imposed higher rates would be rewarded; under any conceivable method, impacts will vary from district to district.

Furthermore, SJR 76 does not specify what part of the property tax it’s replacing. The joint resolution states that the amendment is meant to “reduce school district ad valorem rates through an increase in the state sales and use tax.” This could apply to the Maintenance and Operation (M&O) portion of the property tax, which is a locally-collected, mandatory 15 mills tax for the maintenance and operations of local schools—a portion of which is redistributed from wealthier to less wealthy school districts by the state—but the amendment itself does not spell this out.

Property taxes tend to be more economically neutral than most other taxes, since they don’t discourage labor and investment the way income and many other forms of taxes do. Because real property is immobile, tax avoidance and competition are much less pronounced with property taxes, making them a relatively stable and economically efficient source of local revenue. While the system is not perfect, property taxes also get closer to providing benefits relatively in line with the amount of taxes paid.

Because Texas forgoes an individual income tax, it relies more heavily on other sources of revenue, and local governments are comparatively more important than they are in many other states. This yields property taxes that are higher than average, a frequent source of complaints in a generally low- tax state, even if they are part of the reason other taxes are low.

Sales taxes, so long as they are levied on final consumption, also tend to be relatively economically neutral. They’re also relatively transparent: you can see how much you’re paying in taxes just by looking at your receipts. But property taxes are likely more transparent in terms of total taxes paid. Anyone could tell you her property tax bill from this year, but you’d be hard-pressed to find someone who could tell you how much she paid in sales taxes over the same stretch of time.

Senate Bill 2’s levy limit would control the total revenue gathered through property taxes by automatically putting levy increases exceeding 2.5 percent to a vote. Senate Joint Resolution 76 would put sales tax increases toward property tax relief but would not guarantee that local taxes would remain at lower levels after their initial drop, and the distribution of offsetting revenues across districts would remain unknown. Both pieces of legislation are well-intentioned, but the tax swap, in particular, is highly complex. The Lone Star state should make sure to consider all the consequences when considering these policies.


Maine: Walmart asks for millions in tax abatements

Walmart is making a push in communities around the state, including Ellsworth and Bangor, to lower the property valuation of its stores by millions of dollars. The requests, if granted, could cost host communities hundreds of thousands in one-time retroactive reimbursements and future tax revenue.

In many towns, Walmart is arguing that, despite its thriving business, its stores should be assessed as though they were vacant. “Essentially they’re saying, ‘We should be assessed based on a shuttered, empty, gargantuan warehouse,’” said Noel Madore, an accountant with a Farmington-based tax firm.

Assessors in some states, including Wisconsin, Texas and Michigan, are buying the argument. In 2017, Walmart requested tax relief in at least eight of the Maine communities in which it operates, according to data collected by The Ellsworth American.

That year, Walmart attorneys filed requests for more than $41 million in tax abatements around the state, not including millions more in appeals for several of its Sam’s Club locations. If Walmart were to succeed in all of its appeals, the reductions would result in more than $600,000 in yearly property tax revenue losses to local governments, as well as hundreds of thousands of dollars in one-time payouts.

In many cases, Walmarts are basing their requests on the “dark store” theory of taxation, which asserts in part that big-box retail locations are so specially built that once they leave them, the properties won’t be worth much to anyone else.

“Unlike many other commercial properties, free-standing ‘big-box’ stores … are not constructed for the purpose of thereafter selling or leasing the property in the marketplace,” an assessor hired by Lowe’s argued in a Michigan courtroom in 2014. Basically, the stores are meant to be built and then discarded, not repurposed.

But another reason Walmart may have trouble selling its old locations is that it intentionally limits what the properties can be used for in the future, said Ellsworth Assessor Larry Gardner in an email. If Walmart ever moves out of its Ellsworth location, said Gardner, it “will restrict (with deed covenants) their property from ever being used by any other business that might even remotely compete with them.”

Some former big-box stores do sell for far less than what they were assessed at when in operation, said Gardner. Example: the $3.2-million sale of the former Lowe’s building to The Jackson Laboratory in 2012. But in that case the store was going out of business, not moving, Gardner said.

Walmart is not the only corporation using the dark store approach, said John O’Donnell, whose accounting firm works with 35 towns in Maine, including Farmington. “It’s coming to your town soon, as they say. Walmart, CVS, Home Depot, Kohls, Walgreens,” O’Donnell said. “The dark store method is being embraced.”

Appealing their valuations has become an annual event for many retailers, O’Donnell said. “They appeal most, if not all, of their assessments in every town every year. It’s an indication that this is a business strategy more than it is an indication that all of these assessed values are excessive.”

“This is absolutely crippling and crushing these towns and their tax base,” O’Donnell said. “Once they’ve gotten some traction with it, with some court decisions, the favorable decisions have led to a domino effect in them trying to appeal all their stores and huge reductions in taxable value.”

In Ellsworth, Walmart’s lawyers filed an abatement request for the 2017 tax year asking that the property value of the store be cut in half, from $20.1 million to $10 million, which also would have halved its $361,000 yearly tax bill. Gardner denied the request after Walmart failed to provide more information (such as an appraisal) by an extended deadline. Under Maine law, assessors can deny an abatement if a company fails to provide requested information.

Although Walmart has little legal standing to do so, Gardner said, it has decided for the first time to take the case further, to the State Board of Property Tax Review. “They’ll take anything,” Gardner said. Getting a town into mediation or a settlement may be enough to get the value lowered by even a small percentage, which could mean thousands of dollars in yearly savings for Walmart.

And abatements are requested after taxes are paid for the year, meaning if the requests are successful towns will not only take a hit in the future but also have to take money out of town coffers to pay the bill. The fight also can cost towns thousands of dollars in legal fees if they have to hire outside attorneys, as well as extensive staff time.

“When assessors are faced with this type of challenge it’s formidable, it’s daunting,” O’Donnell said. “Their resources are almost always limited. You’ve got the company going after them year after year after year with all its resources.” That’s what is happening in Scarborough, where the town is fighting a $10-million abatement request filed in 2017 that would cut by roughly 50 percent the value of the $20-million Walmart Supercenter there.

If Walmart prevails, it would result in a loss of roughly $160,000 in yearly tax revenue going forward, as well as one-time payment of the same amount. “I think there’s a pattern here that they use,” said Scarborough’s Town Assessor David Bouffard. Walmart has not used the dark store defense, simply saying they believe the property is overvalued, without giving much reasoning, Bouffard said.

After he rejected the request and a local Board of Appeals backed him up, Walmart’s lawyers took the case to the Maine State Board of Property Tax Review, which has ordered Scarborough to attend mediation with the Walmart’s lawyers.

That could mean hiring outside legal help, Bouffard said, at the expense of the taxpayers, and may ultimately result in less revenue for the town going forward. In addition, it could mean reaching into town coffers to pay back what Walmart says it is owed.

Walmart also recently filed another request appealing its 2018 taxes, said Bouffard, requesting a $9.1- million reduction. “I have not replied yet,” Bouffard said. “But it’s kind of hard to deal with that when the other one is still ongoing.”

The requests come even after several stores around the state — including in Ellsworth — have spent millions on renovations, retrofitting stores for online grocery pickup and other amenities.

“They’ve been quite successful here in Windham, to the point where they’ve been making improvements,” said Town Assessor Elisa Trepanier. Despite the improvements, Walmart requested to have its Windham location’s valuation lowered from $14 million to $10 million in 2017. Trepanier rejected the request after Walmart refused to provide more information beyond a one-page form. Walmart didn’t pursue it further.

“They did not apply this year, much to my relief,” she said. Ellsworth Assessor Gardner, who has been in the business for more than 30 years, said he believes Maine’s laws are strong enough to withstand big-box store appeals. But, he added, Walmart has been “shot gunning appeals” nationwide in recent years, “shooting out appeals to see what sticks.” And that could be enough.

“Just the threat of going to court may intimidate an assessor to lower the value,” Gardner said. And the dark store approach has still been successful in many areas of the country. “I’m flabbergasted at how successful they’ve been in the courts,” O’Donnell said. “It makes me really uncomfortable.”



Germany: Property Tax Reform – A Current Overview For The German Market

What is property tax?

Municipalities develop building areas, secure water supply, install street lamps and build roads leading to houses. Homeowners have to contribute to these costs by paying property tax. Property tax A is payable on agricultural and forestry property, such as fields. Land tax B applies to developed or developable land and buildings. In general, tenants also pay the property tax via their utilities costs – so far this has averaged 19 cents per square metre, i.e. 19 euros per month for 100 square metres.

Why the new regulation?

In April 2018, the German Federal Constitutional Court declared at least for West Germany the previous assessment bases unconstitutional. The unit values (“Einheitswerte”) have not been updated since 1964 (in East Germany even since 1935). This was contrary to the universal principle of equality, the grounds for the judgment stated. Many cities and municipalities have undergone extreme changes since 1964/1935 and thus also the values of land and buildings, specially in urban areas. The legislator has until the end of 2019 to reform the property tax. By 2025 at the latest, the new valuation principles will have to be applied. This period of time will be at least required. Because a system must be developed and the data of approx. 36 million houses, residential buildings and properties must be re- evaluated.

Does the property tax then have to be revaluated every year?

In the future, citizens will have to renew their property tax data every seven years. In this way, it is to be prevented that the assessment bases are again classified as outdated.

How high are the revenues so far?

Property tax is the third most important source of income for towns and municipalities after trade tax and wage, income and value added tax. It covers 15 percent of municipal tax revenues. In 2017, the total revenue from property tax was around 14 billion euros. The property tax A (forestry and agriculture) accounted for around 400 million euros and the property tax B for 13.56 billion euros.

How is the property tax currently calculated?

Three factors have to be taken into account: The unit value (Einheitswert) multiplied by the property tax measurement number (Grundsteuermesszahl) multiplied by the assessment rate (Hebesatz). Each municipality can determine thea assessment rate and thus the actual amount of the tax itself.

What does the original reform proposal look like?

On 28 November 2018, German Finance Minister Olaf Scholz (SPD) presented two proposals for the reform of the property tax that have been drawn up so far:

The value-independent model (Wum): In this variant, the property tax is based solely on the size or area of the property and the building.

Advantage of this variant: Simple calculation. In addition, there are to be factors which are dependent on the use of the building and which, for example, are lower for residential buildings than for commercial buildings.

Disadvantage of this variant: For the 200 square meter single family house in the country the same property tax is due as for the 200 square meter villa in the inner city.

The value-dependent model (Wam): Here the property tax is based on the actual value of the property and the land.

Advantage of this variant: It is more social, since more valuable real estates are taxed higher than more favourable. In this case, the 200-square-meter villa in the city would be subject to a much higher property tax than the house of the same size in the country. In the future, the unit value will consist of five components: Net cold rent, living floor space, year of construction, land size and regional land value.

Disadvantage: Especially in large cities, the inclusion of net cold rent as a basis for calculation will result in a higher real estate tax burden for property owners. As a result, rent increases can be expected if landlords pass on the additional costs to the tenants. Apartment owners must also specify a “fictitious” rent for owner-occupied real estate – the Ministry of Finance wants to make regional rent levels available, which must then be entered. In case of rentals, the rent agreed in the rental contract is entered.

The Wam will meet the requirements of the Federal Constitutional Court, a fairer and more realistic, taxation of land in relation to each other, rather than the Wum. Although the Wum is the simpler solution from a bureaucratic point of view, there are doubts as to whether the principle of equal treatment and the requirements of the German Federal Constitutional Court would be complied with. Whether one of the proposed models for property tax will prevail remains to be seen.

Until an agreement has been reached, the finance ministers of the federal states will probably meet monthly with Federal Finance Minister Olaf Scholz. At the first meeting in January 2019, a further proposal was submitted:

The surface-layer model (Flam): The Flam probably represents a mixture of the Wam and the Wum. The model includes the ground value (“Bodenrichtlinientwert”) – but not for individual land plots. Rather, the ground value should be averaged over zones. The average ground value of the respective municipality is to be determined by expert committees. Should large differences occur within a

municipality, the municipality should be divided into different zones, within which the land guideline values should “only differ by a certain percentage”. Zoning should be omitted if communities are below the average ground value of the entire country.

Reform proposal key issues paper February 2019

A key issues paper was released at the second meeting of finance ministers in February 2019. This paper states that in future a combination of the value of the land, the age of the property and the amount of rent will be used to calculate the tax. This seems to be a modification of the Wam, in which an elaborate individual valuation of all approx. 35 million properties is dispensed with and flat-rate data is to be used instead. With the ground values larger zones are to be formed, as it was already thought of in the Flam. For the age of the real estate there should be at least for houses, which were built before 1948, a lump sum evaluation. With the rent the actually agreed net cold rent, at least however 70% of the average net cold rent, is to flow into the property evaluation. It is unclear whether there is a cap for the case that the actually agreed net cold rent is higher than the average net cold rent.

Valuation of commercial properties and mixed-use properties

Business properties and mixed-use properties must also be valued using the capitalised earnings value method in accordance with the key issue paper. Only if there are no actually agreed rents and it is not possible to determine customary local rents, should a simplified tangible value method be applied instead of the capitalised earnings value method. In this case, only 8 instead of the previous 30 disclosures are to be necessary.

Can we expect rising costs and higher prices in metropolitan areas?

This can be assumed. In order to prevent this, the Ministry of Finance would like to lower the basic federal rate (Steuermesszahl) on the one hand and on the other hand expect the municipalities to adjust their collection rates at the same time, so that differences by the reform are cushioned for the citizens. Currently, tenants in demanded areas are expected to incur additional costs in the “mid double-digit euro amount more per year”. However, this is a calculation with a few unknown factors.

For the tenants the property tax has so far only a meaning, because the tax can be added as operating cost on the rent. By resolution of the large coalition this could be changed however in the operating cost regulation (Betriebskostenverordnung). First critics complain however also this approach. The owners could, then, increase the cold rents for new rentals to compensate for the additional property tax costs, which would result in an increase in the local comparative rents and would thus lead to an additional burden on all tenants.


A solution is not yet in sight. The Federal Constitutional Court gave politicians until the end of 2019 to reach a solution. Until then, it is likely that some shortcuts to Wam, Wum and Flam will be added. We will keep you up to date in our next newsletter.


United Kingdom: Business rates: how reform can benefit both business and public services

Organisations across the political, public, and business sectors see business rates as outdated and problematic. Reforming the system could have profound consequences for business vitality and regional development, while also having the potential for securing the proceeds of local wealth creation, explains Kevin Muldoon-Smith.

Business rates – originally a simple property tax based on a periodical Treasury assessment of rateable value – is being asked by government policymakers to face in multiple directions at once. Business rates are required to be fair, consistent with economic conditions, and to support growth and fair competition. More recently, in 2013, Business rates were also commandeered by Central Government to fund shortfalls in local government funding through the Business Rate Retention System. Local income from business rates has effectively replaced the previous Revenue Support Grant. Business rates are worth almost £30bn per year to the Treasury and are being used to counter the impacts of austerity.

This impossible contortion has resulted in a complex system that is very difficult to follow. Businesses face various multipliers, reliefs and exemption thresholds. In the economic sense, the incidence of the tax also falls negatively on both tenant (in the short term) and property owner (in the long term). While the local government Business Rate Retention Scheme relies on a convoluted web of tariffs, top-ups, safety nets, and levies. It also remains the case that the existing system only rewards business rate growth generated from new property development. Growth derived from existing property is stripped out during the national revaluation exercise – ignoring the value created by local regeneration. This balancing act creates a sense of pity for the business rate system: by asking it to serve so many agendas, it serves none.

Any change in favour of one interest has the knock on impact of undermining the other. For example, the decision by Central Government to maintain a consistent or increasing Business Rate Multiplier following national property revaluation has helped retain more business rates for public spending purposes. Concurrently the call for small businesses to be removed from the business rate system all together has resulted in lower tax rates, rate relief, or a tapered arrangement. However, the consequence is that this higher business rate burden is shouldered by an ever-decreasing number of businesses with larger floorplates. To put this in context, following the 2000, 2005, and 2010 national revaluation exercises, the Business Rate Multiplier was reduced to between 41.6p and 42.2p in the Pound. Following the 2017 revaluation exercise, the multiplier was only reduced to 47.9p and quickly increased to 49.3p in 2018 – one of the highest levels on record.

Business rate reform

A lot of the press attention for business rate reform falls upon the retail sector. However, although clearly an important consideration for retailers, Business rates are not necessarily the cause of market disruption in this sector. Business rates are often relatively high for retailers because they have paid a premium for centrality of location. Rather, the sector is currently beset by myriad structural, macro and micro concerns, which magnify the cost of business rates.

Consequently, business rate reform should not be led by one agenda. Instead, the opportunity should be taken to unite the various considerations and priorities that are reliant upon or demand a reformed commercial property tax in England. This will then provide the opportunity to work backwards to understand how a new system of property tax could be implemented. These considerations and priorities include:

  • Being responsive  to  economic  conditions  and  incentivising  investment  in  property  and business;
  • Being sensitive to the new world of work that favours hybrid and online business models;
  • The need for transparency, legibility and simplicity;
  • Sympathy for how business rates fall on various property sectors and locations – for example retail, leisure, office and industrial, all of which experience property tax in different ways and locations;
  • Tackling the perversity inherent in empty property rates that at times rewards vacancy more than occupation and has driven a sub-industry in Empty Property Rate avoidance techniques;
  • The demand for local government financing which is only projected to increase as society lives longer;
  • The need to capture the value created by public spending on physical, social and knowledge infrastructure in local areas.

In facing up to the demand for reform, there is a concurrent interest in Land Value Tax as an alternative arrangement. In contrast to business rates, Land Value Tax is based on location and is levied upon the value of land (with or without in situ property). The central contention is that the value of land is defined by what is happening in the immediate location and wider region. For this reason, Land Value Tax is considered progressive because it captures value invested by society in a given location and potentially aids current calls for local wealth building and inclusive growth. This certainly remedies one of the central concerns with the Business Rate Retention Scheme, that any value increase due to local investment is stripped out during the periodical national revaluation exercise – known as the ‘wash through.’

However, England should be wary of viewing Land Value Tax as a panacea for concerns with business rates. A great deal of land simply has no value and demands a certain degree of investment for development readiness. In addition, any reduction in tax may capitalise into higher rents as property owners price in the change. Concurrently, it is not clear how Land Value Tax would deal with the new world of digital platforms that do not have physical footprints, nor the dynamic reality of commercial business that increasingly must switch between use in quick succession – necessitating repeated valuation.

A very English compromise

The economic and ethical argument for Land Value Tax is relatively well made. However, the practicality of moving to this system is not straightforward. It would require massive change to the English institutions of tax, another national revaluation exercise (for residential and commercial land) using a new method of site appraisal (although other countries use automated methods) and the development of a new valuation skill base. Perhaps the biggest obstacle will be political. A switch to Land Value Tax would shine a light on the deeply ingrained practice of wealthy property owners who may not take kindly to disturbance.

The eventual reality may be a compromise. For example, a semi-permanent transition that combines elements of land value, property, and turnover related tax. This balancing act would be similar to the split-rate tax (where land is taxed at a higher rate than property) seen prominently in North America but also include elements of business gain not easily captured in bricks and mortar – for example a Digital Sales Tax. The Digital Sales Tax, announced by Philip Hammond in the 2018 Budget aims to capture value from firms that shift sales and profits between administrative jurisdictions.

The situation is multi-faceted and therefore calls for a partnership based solution that brings together business, property owners, the various tiers of government, and those administering tax. The situation must not be distilled into respective political agendas or departmental budget silos. Nor should it be examined through simplifying principles of economic supply and demand or reduced to cash flow, expenditure ,and finance settlements. Rather cross party consensus must be found that views land and property based tax through a dual prism of business profitability and the payment of local public services.

Any solution must capture the value held in the new world of work and recover the investment put into National and Industrial Strategies and the bottom-up civic efforts of local communities, towns and cities. Such a system reaches into the institutional fabric and identity of local government and how, as a nation, we support, reward and recapture investment in business and economic development.

Greece: Property value gap grows between different zones

The Finance Ministry’s blueprint for the adjustment of properties’ taxable rates (known as “objective values”) provides for hikes to the zone rates in the center of Athens and reductions in less well-off areas of the capital.

Sources say that ministry officials intend to lighten the tax load on property owners in districts such as Perama, Korydallos, Nikaia and Keratsini, while raising rates in Syntagma, Pangrati, Kolonaki and even Ambelokipi, due to the great increase in demand recorded over the last 12 months.

This is despite the fact that the existing objective values, adjusted last year, are in most cases higher than the market rates.

With this move, the government will continue to place a greater burden on the owners who are already paying the bulk of the Single Property Tax (ENFIA), while making ownership even cheaper in other neighborhoods.

However, the plan is awaiting the approval of the country’s creditors, who have asked the government to adopt last year’s recommendations by commissioned property surveyors that were not used after all during the 2018 adjustment.

The creditors are insisting on that because the rates proposed by the surveyors provided for hikes in several districts in the southern and western suburbs of Athens where the construction costs for new homes are above the ministry’s zone rates.

Likewise, the recommendations for zone rate hikes in several other cities and towns around the country were rejected to avoid an increase in ENFIA dues.

Ministry officials concede that the new rates are almost ready but have not ruled out a significant delay in their publication, possibly around the end of the year’s third quarter. Although the new values will only come into force in 2020, their upward adjustment is expected to offset to a great extent the benefit from the promised 30 percent reduction of ENFIA.

According to the government’s agreement with its creditors, the objective values will have to match market rates by 2020.A recent European Commission report confirmed that the government avoided the adoption of the 2018 recommendations by surveyors to avert major ENFIA hikes.

Compliments of the International Property Tax Institute (IPTI), a member of the EACCNY