19 June 2025 - Subsidized Homes Worth Millions
The response from the Ministry of Finance to a question posed by Volt MP Alexandra Attalidou caused immense disappointment, to no ones surprise. Unfortunately, it confirms our worst fears about our government's social policy, which has become a hostage to deep economic interests and other political stakeholders, rather than genuinly benefiting the average citizen.
Our question aimed to investigate the loss of VAT revenue due to the continued and untargeted application of the reduced VAT rate for the purchase of first homes valued over €500,000. Essentially, under the current legislation (including the three-year transitional provision that was legislated), the door was left open for the unfair and scandalous benefit of those directly and/or indirectly involved in the sale of extremely expensive properties—designated as “first homes”—to individuals who clearly had no need to benefit from this social measure.
The analysis of the data provided by the Ministry, covering a period of 19 months and referring to homes valued above €500,000, shows a VAT revenue loss for the state of around €132 million—benefiting people who had no need of the measure, all under the pretense of social policy. The reduced VAT rate affected a total of 9,000 applications for home purchases. Of these, 950 were for expensive homes worth over €500,000, with an average value of €1,336,155—homes that the state effectively subsidized. For the remaining 8,050 applications (for homes under €500,000), the reduced VAT cost the state €162 million.
At the same time, the government—irrationally—refuses to grant child benefits (zero allowance) to families with an annual household income over €50,000, citing the need for targeting. It’s worth noting that children’s clothes and shoes are taxed at the full 19% VAT rate. This is considered “targeted” family support based on income criteria, while no targeting whatsoever exists for the reduced VAT rate on first homes until the end of the transitional period, resulting in massive VAT revenue losses for the state.
Proposal to End the Transitional Period
The data provided by the Ministry of Finance places an immediate responsibility on us to submit a bill to Parliament to amend the VAT law in order to immediately end the current irrational and unfair transitional arrangement. We will act without delay, and each political party is called upon to assume its responsibilities to society.