In a move which is certainly a sign of the times, and shows the Greek economy is still under major pressure, the Greek government has floated the idea of charging additional tax on Greek property income, either from rental or sale, for expats living in Australia. This is despite the fact that the Australian government and the Greek authorities have in place a “double taxation” agreement which should in practice avoid any such issues. If you take a step back and look at the situation, there is no doubt that the Greek economy is under pressure, the Greek government is now in the pocket of the European Union and something needs to be done to claw back lost revenue.
However, critics of the Greek government blame the fact that potentially hundreds of millions of Euros in taxes have yet to be collected, many of these debts have been written off and suggest this is the area in which regulatory changes should be made. The Greek community in Australia The 2006 Australian census states that there were 260,000 people of Greek nationality living Australia with 126,000 actually born in Greece. Therefore, it goes without saying that the Greek expat community in Australia is certainly a significant force and already the Australian government has confirmed that it is “monitoring the situation” with regards to potential issues of double taxation. The fear is that the Greek government is to effectively deem all people from Greece as “living in Greece” for taxation purposes although they have stated point-blank that they will not tax income earned in Australia. For some reason the Greek expat community does not trust or believe what it is been told at the moment and there is growing anxiety amongst this expat community.
There is a potential “get out clause” because the Greek government has suggested that the implementation of the recently confirmed property tax could effectively be delayed or cancelled if the Greek economy improves. How likely is this under the significant financial pressure at the moment? The future of Greece It is no surprise to learn that there is a significant Greek expat community in Australia especially when you bear in mind the ongoing economic difficulties. The figure of 260,000 expats gleaned from the consensus of 2006 is likely to be significantly higher especially when you bear in mind recent events. It will be interesting to see how the Australian government supports the Greek expat community because in effect by allowing them to stay in Australia they are under the stewardship of the Australian government.
Quote from AustraliaForum.com: “The Greek government has this week confirmed it is looking at introducing a property tax for Greek expats in Australia, and other areas of the world, earning rental income and sales income on properly held in Greece.” The short to medium-term outlook for the Greek economy is not good, the Greek government is effectively at the beck and call of the European Union and many experts predict significant budget problems for many years to come. Against this backdrop, it is difficult to see the so-called “get out clause” brought up by the Greek authorities ever being activated. To all intents and purposes, this is something of a red herring to potentially take the edge off the proposed property tax. Conclusion While the Greek government has been talking about austerity measures and increased taxation in the same breath, looking towards those who have moved overseas, it is difficult to see how the Greek government can justify pushing this too far.
Income on rental property and property sales in Greece has been suggested although so far the legislation has been held back for further discussions. Concerns about potential double taxation problems on income earned in Australia seems to be well wide of the mark but when you bear in mind the precarious position of the Greek government perhaps anything can happen? It will be interesting to see how far the Australian government is prepared to go to protect the assets and the wealth of Greek expats living under their stewardship. This could well be a major test of the rights of expats when moving to Australia and whether indeed the federal government will look to protect these?
* This article was first published on www.australianforum.com-Neoskosmos.com