New “Autonomous Local Tax” set to triple financial burden on property owners

According to the Panhellenic Federation of Property Owners (POMIDA), the provisions of the bill impose a threefold annual financial burden on property owners through a new dual tax in favour of municipalities and, now, also regions—effectively a new annual “LOCAL GOVERNMENT PROPERTY TAX”, which will apply in parallel with the national property tax, with a combined rate of up to 1.05‰ per year.

At the same time, the provisions introduce what is described as a 27-year compulsory “rent control” regime, of almost “occupational inspiration”, for new leases of private properties. This, according to the federation, would result in municipalities and regions being unable, rather than better able, to secure properties for their housing and operational needs.

The main changes under the new “Local Government Code” are as follows:

Article 389 – Municipal Cleansing and Lighting Fees

The proposed reduced rate of 10% for municipal cleansing and lighting charges remains in place for the following categories of properties:

1. Enclosed spaces used without electrical installation
2. Enclosed spaces with minimal electricity consumption for safety reasons
3. Properties whose electricity supply has been disconnected, which automatically fall under the reduced rate without the need for a declaration by owners

This provision is considered positive, as it responds to a longstanding request by POMIDA. However, it is argued that storage spaces in apartment buildings (horizontal property units) should also be explicitly included, as they are auxiliary spaces where no activity is carried out and where electricity consumption is minimal, yet they are currently charged as if they were primary-use residential spaces.

Article 393 – Introduction of Municipal “Property Tax” (Local Development Fee)

The framework is increased to twice the current rate of the Property Tax (TAP), from 0.25–0.35‰ to 0.30–0.70‰, instead of the threefold increase provided in the original draft.

Article 447 – Regional “Property Tax” (Regional Development Fee)

A new optional Regional Development Fee is introduced, with a rate of 0.15–0.35‰, to be imposed by decision of the Regional Council and collected through the same mechanism.

Multiple consequences of the “Local Government Property Tax”

In effect, the addition of the regional levy results again in a threefold increase (from 0.35‰ to 1.05‰) of the existing TAP burden, effectively creating a new “LOCAL GOVERNMENT PROPERTY TAX”, even higher than ETAC, the predecessor of today’s national ENFIA property tax, where the rate was 1‰.

The abolition of the Electricity-Supplied Property Fee (F.H.X.) is not considered an offset, as it previously burdened tenants, whereas the new levy burdens property owners entirely.

In practice, the total amounts of the two new charges will be collected through electricity bills, and when paid by tenants, they may be deducted from rent payments to landlords. However, monthly reduced rent payments, in accordance with the new law requiring mandatory bank transfers, will be treated by the Independent Authority for Public Revenue (AADE) as partial payment, resulting in landlords losing their 5% tax exemption on rental income and tenants losing housing subsidies and rent rebates.

Therefore, the provisions are called to be entirely withdrawn.

Article 428 – Compensatory Expropriation Fee

Article 430 – Optional Fees for Services or Works

These provisions allow municipalities and regions to impose fees through council decisions for any service or project.

Article 510 – Limitation of Debts

Following POMIDA’s objections, the limitation period for properly assessed debts is reduced to five years, while a ten-year limitation applies to undeclared municipal fees (previously up to 65 years) and TAP charges (previously up to 33 years). It is argued that the limitation period should generally be five years, consistent with Council of State case law and existing public sector rules.

Article 555 – Property Leasing: A 27-year “Local Government Rent Control” Regime

Lease duration for municipal and regional properties is set at up to 12 years, with the right of unilateral extension for an additional 12 + 3 years, regardless of shorter terms in tender documents or contracts. Following objections, existing private leases were excluded, and other adverse provisions were removed.

However, municipalities or regions may unilaterally terminate a lease early without compensation, within 30 days of notifying the lessor. From that point onward, the obligation to pay rent ceases, even if the property continues to be retained without being returned to its owner.

In this way, the private owner’s property is effectively bound for 27 years, regardless of contractual terms, while the public authority may terminate the lease at any time with one month’s notice.

These provisions are described as creating an unacceptable new form of “rent control” against property owners, which, it is argued, will ultimately also harm local authorities themselves, as property owners will no longer be willing to participate in leasing tenders.

All interested property owners are invited to submit their views on the new Code via the Ministry of the Interior’s public consultation platform until 4 June 2026 at 21:00.