Greek parliament passes new property tax, ruling coalition loses one MP

Greek parliament passed on Saturday the new single property tax amidst protests in one of the final tests for the government before the Christmas holidays. The conservative-led ruling coalition's slim parliamentary majority was further trimmed to 153 seats in the 300-member strong assembly after the expulsion of a deputy who voted against the bill. The law, which aims to expand the tax base and raise much needed revenues to address the economic crisis, was approved with 152 votes in favor with the backing of the deputies of the two-partite coalition. Prime Minister and New Democracy (ND) leader Antonis Samaras expelled MP Vyron Polydoras from the party's parliamentary group, after his vote against party line, while a socialist PASOK party MP was absent on health reasons. The new real estate tax, which comes into force on Jan. 1, replaces a string of taxes on property. The wider reform of Greece's taxation system is for years one of the key demands for changes by international creditors who support the debt-laden country with bailout loans. The new law foresees the taxation of all properties depending on value, an extra tax for properties worth more than 300,000 euros (408,000 U.S. dollars) and for the first time taxes agricultural land. The idea of taxation from the very first square meter with limited exemptions based on social criteria, for example for the jobless, over indebted low income families with children and disabled taxpayers, had raised objections even among deputies of the coalition government. Addressing the chamber shortly before the roll-call vote, Finance Minister Yannis Stournaras acknowledged that the burden is heavy for taxpayers in an economy which has lost a quarter of its GDP in four years, but it is more balanced and fair compared to the previous framework. However, farmers from across Greece who gathered on Syntagma square in front of the parliament ahead of the vote on Friday insisted that "increased taxation will destroy agriculture". They claimed that the new tax undermines efforts for the recovery of the national economy, while a group of protesters pelted oranges against police forces. In addition, real estate agents warn that increasing taxes on property could further damage a sector which has been hit hard during the three- year debt crisis. Prices have declined by 32 percent during the crisis due to low demand amidst recession, the Central Bank of Greece estimated in its last annual report published a few days ago. Under the heavy burden of taxation, a third of taxpayers feel anxiety of whether they will manage to pay off all taxes and debts to banks in coming months and years or eventually lose their properties, another survey conducted by the General Confederation of Professionals, Craftsmen and Merchants. The data were released ahead of the second vote on the home foreclosures draft bill due later on Saturday evening. (1 U.S. dollar = 0.73 euro)