Greece debt crisis: Tax rises leave nation's luxury boat market all at sea

Boat registrations have already shrunk from a high of 11,112 in 2007 to just over 2,500 last year

Yachts in Patra, Greece’s third-largest city (greeka.com)

At its height eight years ago, George Kranitis’s family-owned shipyard in Patra, Greece’s third-largest city, employed 35 people and sold around 340 boats annually. But after years of recession, Mr Kranitis has had to sack almost everyone.

To get its third financial bailout in five years, the government introduced reforms and austerity measures. One involves the extension of an annual luxury tax to all recreational boats over five metres (16ft). Another increases that tax from 10 to 13 per cent.

The combination, according to Mr Kranitis, could prove to be the death knell for an industry that’s already seen boat registrations shrink from a high of 11,112 in 2007 to just over 2,500 last year.

“We’re being destroyed,” said Mr Kranitis, who also heads the Greek Boat Builders’ Association.

With a coastline 10,720 miles long, the fate of the boating industry resonates far and wide in Greece.

Anyone thinking of raising some cash by selling a boat will struggle as the sales tax has also been increased. Opting to hold on also doesn’t come cheap. The owner of a 10-metre speed boat valued at €16,000 (£11,350) would have to pay €2,080 annually. For a 10-metre sailboat or yacht valued at €28,500 with accommodation for passengers, the amount jumps to €3,700.

There are doubts about whether the moves will bring some cash back into state coffers.

“I don’t believe they will have any income from this because even if someone would like to buy something, he would prefer to go to Italy or to another country to buy it,” said Greek Tourism Federation chief George Vernicos, who also heads his own yacht business.

George Riginos, a partner in the family-owned Riginos Yachts in the Athens suburb of Glyfada, said chasing buyers away with higher taxes can only be damaging by putting a whole host of people along the chain out of work – from builders at shipyards to crew members and cleaners.

“It’s a pity,” he said. “Last year was the best in sales in a long time and now that looks [like being] reversed.”

AP