The Greek government is reportedly considering the prospect of increasing the property tax rate (ENFIA), even doubling it, for unexploited properties held in bank and servicers’ NPL portfolios.
The move, if implemented, aims to add thousands of residences to the housing market, especially in the greater Athens-Piraeus area, where a shortage in available and reasonably priced residences is deemed as acute.
By some accounts, as many as 21,000 properties, a large chunk of which are apartments, remain unoccupied after being foreclosed on by mortgage-holding banks and affiliated servicers.
The issue has already drawn European attention, with the Single Supervisory Mechanism (SSM) recently citing the high number of such properties congregating on Greek systemic banks’ balance sheets, with the book value of the latter calculated at eight billion euros.
According to analysts, many of the foreclosed properties are far from ready to be placed on the auction block, with issues such as unresolved building code violations preventing their timely sale – one by one or as in a bundle of properties – to the highest bidder.
As such, long-term leasing appears as a solution, the government considers, towards ameliorating a budding housing shortage in urban areas.
Conversely, one proposal being floated by servicers is for the state to allow the sale of properties burdened with unresolved legal and building code issues, which can take months and even years to overcome, by bucking the responsibility to would-be buyers. The latter would be given a significant discount in order to “sweeten” such a deal.
