Remember that IKA is Greek National Insurance, so when you pay IKA for a house build you are paying compulsory National Insurance stamps for the tradesmen.
You get plans drawn up to build or renovate a house and when these get passed you are issued with a building licence. The cost of IKA due is then worked out by the size of the build, ie. the approximate number of days work ( = stamps) required by various tradesman to carry out the build. This is to avoid dodging paying national insurance for the workers. A percentage of the IKA paid goes to the workers as their national insurance contributions and the rest goes straight into the IKA fund. For the sake of IKA the owner
of the property is like an ‘employer’ and is responsible for IKA being paid for the workers.
Examples of how it actually works, courtesy of Kostas:
- Manolis gets a licence to build on his plot and employs builders to do the job. His IKA bill for the build is worked out by IKA at 6,000 euros. At the end of each month he pays the workers IKA stamps for, say, 22 days each per month. He pays this money to IKA, in his name for his house licence number (adeia), and assigns the ‘stamps’ to his workers, in their names. At the end of the build the amount of IKA he has paid must have reached at least 6000 euros.
- Yiannis renovates an old house. He gets permission (adeia) from the planning authorities and they calculate how much IKA is due – i.e. how many days work are involved to do this job. Yiannis then employs John and Jim to do the work and the IKA he must pay should be assigned monthly as ‘stamps’ to John and Jim.
If you do the work yourself:
You may (we are not sure about this) **
be allowed to pay the IKA stamps (or some of them) into your name. For this you will need a personal IKA national insurance number (requires just a simple registration with the IKA office), and not be employed and paying, or claiming, IKA elsewhere.
** update, just checked this out. You are not allowed to pay IKA stamps in your own name for your own property. If you are already registered and established with IKA as a worker who has builders stamps (there are different types of stamps for builders as opposed to office workers etc) then you are granted a discount on the IKA costs for the build or work on your own property. So it sounds as though what Filippos was told may have meant that the owner does not have IKA stamps BUT he must still pay the IKA.
Alternatively – here’s the twist – you can SELL on some stamps. So, for example if you are unable to put the stamps in your name (as above) you still have to pay the IKA on your build/renovation. If you don’t assign the IKA you pay to any workers it will just go straight into the cavernous IKA pot. There are many workers out there who are clamouring to get enough stamps to keep up their national insurance health book etc. and those who fall short will be willing to pay you to have the stamps assigned to them. The cost of each stamp is normally around 40 to 60 *
euros per day (depending on whether they are a labourer or ‘mastoras’) and can be sold on for half price or therabouts. So, for example, if Georgos from your village, and any other Georgos etc, needs 20 more stamps for the year to ensure his health book, doro etc, and his work has dried up, he will be willing to pay you a couple of hundred euros for you to assign those stamps to him.
* edit here - 20 to 25 euros is the amount they are usually sold for.
To answer Jeff’s question – theoretically you should have permission to build/renovate and the amount of IKA you will pay is automatically worked out when you get this permission. This is a set amount and must be paid regardless of whether or not you carry out the work yourself.
I don’t know who Filippos spoke to but it sounds like hearsay and I believe that it’s wrong – certainly it seems the rules are becoming more stringent, rather than being more relaxed. Ten or so years ago IKA did not enforce payments and most labourers were casual workers with no national insurance.. the system was overhauled around the same time as the tax reforms when compulsory returns amd 'assumed income' were introduced (I can't remember when that was - was it about 2000 ?).
As for O Yiannis and his asvesti – he is not building and so doesn’t require planning permission to paint the wall of his apothiki, therefore no IKA to pay.