Six factors for closed houses
There are many causes for the phenomenon of almost half a million houses remaining closed, but the stakes are clear: To find the key to the door of this enormous residential wealth, either for sale or for long-term or short-term lease.
The government is attempting to change this with tax incentives, reducing taxation on rental income, combined with discounts for renovations. Any plans for imposing a tax on closed properties have been shelved for now. The government is betting on a positive approach, not with a stick but with a carrot for those who decide to bring their properties back on the market.
It remains to be seen whether the move will work, given that the measures taken to date have not contributed to addressing the housing crisis. Notably in several European countries and beyond, the response is much stricter.
Here are the main reasons why there are nearly 500,000 closed properties in Greece:
- Tax burden: High taxation on real estate leads many owners to leave properties unused. In some cases, taxation exceeds the income that could arise from the exploitation of the property.
- Poor condition of properties: Many closed properties are old and need renovation, but the owners do not have the money or do not see the return on investment.
- Inheritance issues: Incomplete inheritance procedures (e.g. disputes between heirs, lack of acceptance of inheritance due to debts) prevent the development of properties. The government could resolve inheritance issues legislatively, somehow forcing co-owners to develop their properties.
- Areas with low rental interest: In non-tourist or remote areas, there is no demand for renting or buying.
- Short-term rentals that no longer pay: Some owners who had turned to short-term, due to market saturation or a decrease in tourism in some areas, stopped operating them and keep them closed.
- Tenants who don’t pay: Many owners have suffered from tenants who either didn’t pay rent for months until they decided to leave, or left unpaid utility bills, or destroyed basic infrastructure.
Source: eKathimerini.com
