Property owners on 3% ceiling on professional leases: Wrong measure sends wrong message

The Panhellenic Federation of Property Owners (POMIDA) speaks of a “wrong measure that sends the wrong message to the market” on the occasion of the announcement by the Minister of Development and Investment Mr. Adonis Georgiadis, for imposing an annual ceiling of 3% on increases in professional rent, retroactively from 1/1/2022 “, as he stated.

POMIDA notes that there is a risk that the imposition of a ceiling will lead to either under-the-table transactions, or low supply (which pushes rents upwards).

“The best immediate and effective intervention that the state can and must make in favor of their owners and tenants” is proposed “the drastic rationalization of the real estate tax burden and of their incomes”.

In particular, the following are pointed out by POMIDA:

Our view, based on our experience from the evolution of the rental market over the last 40 years, is that the market regulates itself much faster and more efficiently through the consultation of stakeholders, than from any kind of government intervention, which, although temporary, inevitably carry within them the seeds of long-term and destructive rental practices of the past. No landlord will risk his income by ousting a good tenant by demanding an exorbitant rent and expecting a supposedly better tenant…

Thus, the introduction of a ceiling, even if limited, even temporary, is a wrong measure that sends the wrong message to the market, as there is a risk that it will lead to either under-the-table transactions, or low supply (which pushes rents upwards), or, the simplest, to give a “signal” to the market to claim increases at the level determined by the state limit, which in most cases would not even be claimed!

The lever that pushes rents upwards is the combination of the continuous predatory taxation of rents with the untouched scale of 15-35- 45% but also of ENFIA property tax, and not the supposedly irrational claims of the owners. That is why the best immediate and effective intervention that the state can and must make in favor of their landlords and tenants is the drastic rationalization of the property tax burden and any of their incomes.