- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Only sick minds could have thought up property tax

THIS COLUMN, on countless occasions in the past, has expressed the view that President Christofias and his people were incompetent, irresponsible and dangerous for Cyprus. Now, I am convinced that they are politically sick. Their paranoid actions, which we are witnessing daily, have as a source an incurable ideological disease.

The bill for the immovable property tax (IPT) proved emphatically that they are ruthless when they want to put into practice some of their idiotic, ideological prejudices. No argument or rational explanation could stop them; not even the awareness of the harm they would ultimately cause. All they care about is the satisfaction that they acted in accordance with their antiquated ideological beliefs.

They seized the opportunity provided by the bailout to avenge the rejection by the legislature in 2011 of a bill with the same aim – taxation of immovable property. They never accepted that the majority of the legislature prevented them from imposing this so-called ‘taxation of wealth’. So they decided to do it now, ensuring the provisions of the bill were much harsher.

So while the troika initially proposed that Cyprus should raise €20 million in property tax, the government offered to raise that revenue to €69 million. But subsequently the government drafted a bill that – if it could be implemented and property owners paid their tax dues – would have raised, according to some calculations, €200 million. I think that the amount would have been even higher as hotels would have had to pay astronomical amounts of between €200,000 to half a million euros.

The most interesting aspect of this case was the procedure followed by the government. As has been revealed, the land surveys department was not consulted. And according to information, the technocrats of the finance ministry had no involvement in the preparation of the bill. Unbelievable as it may sound, this monstrosity was created by Commerce Minister Neoclis Sylikiotis and Labour Minister Sotiroulla Charalambous in co-operation with the presidential palace.

If this is the case, it would rank as one of the most disgraceful political acts ever perpetrated in Cyprus. This version is supported by the logic that only sick minds could have mustered the ruthlessness and irresponsibility to put together such an abomination. Because, apart from causing big problems for individuals, the IPT would have worked like a mega-ton bomb that would have blown the Cyprus economy to bits. The property and construction sector is in a big mess, but increasing taxation on immovable property 10-fold now, would be the final nail in the sector’s coffin.

Tourism is the only sector of the economy that has been doing well in the last two years. A responsible government would have done everything in its power to help it as it was the only sector of the economy with real growth prospects. It would have taken measures that would have contributed to the lowering of costs so that the sector would be able to compete with other destinations, expand and create new jobs. Instead of this, the government chose to demolish it, by putting the IPT bomb in its foundations.

When the government decides to impose a tax of 300 and 400 thousand euros on a hotel that until last year was paying 50 to 60 thousand euro what would it achieve other the complete destruction of the tourist industry? Don’t you have to be sick in the mind to try to destroying the only flourishing sector of an economy in deep recession?

On September 2 of this year, referring to Christofias and his associates in this column, I had written the following: “These people are dangerous. They will cause more catastrophes before they leave.” It is exactly what they are doing now. Nothing will be left standing by the time he leaves office.

Cyprus property tax