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Property tax proposals from OEB and KEVE

The Employers & Industrialists Federation (OEB) and Chamber of Commerce and Industry (KEVE) have proposed a simple one-off property tax for 2013 as an interim stop-gap measure.

LATE last month, the government had second thoughts about a bill that would have seen Immovable Property Tax in Cyprus rocket.

The proposed tax hike, which was far more than that suggested by the troika, was greeted with protests from landowners, property developers and hoteliers who said the changes would put many of them out of business and drive the economy deeper into recession.

The bill was the only one of a number of bills related to the bailout package not to be voted on by parliament last month.

The Interior Minister, Eleni Mavrou, said that the whole matter was being reviewed and that the government would use the existing formula to calculate IPT using the January 1, 1980 value of a property.

Parliament will continue discussion on amendments to the bill on 17th January.

Yesterday the Employers & Industrialists Federation (OEB) and Chamber of Commerce and Industry (KEVE) suggested a one-off property tax of €4.60/thousand as a stop-gap measure until a new bill has been formulated, agreed and implemented.

Their proposal is that the tax should be paid on each Title Deed and will not be cumulative (i.e. not based on the sum of the 1980 values of properties registered to an owner).

If calculated in the same way as last year, Immovable Property Tax would bring in €28 million this year – and their proposed one-off tax would bring in an additional €69 million.

They also suggested implementing a simplified uniform property tax policy with each owner submitting details of their property. The present system of property taxes, which include VAT, Property Transfer Fees, Stamp Duty, Capital Gains Tax, Sewerage Fees, etc., involves a huge administrative cost with property owners having to deal with different departments with different timescales for payment.

Readers' comments

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  • Costas Apacket says:

    Jill – No.

  • Jill says:

    Will we ever get anyone with an iota of sense running things in this country? No title deeds, developers fleecing us property-owners (well, actually we arn’t cos we don’t have the title deeds), amnesties that keep being put back by another few months, prices going through the ceiling and the Government scratching their heads wondering why all the fuss when everything’s OK in their back yards thank you very much!!!

  • Costas Apacket says:

    Why keep things simple when you can complicate them to the extent that they don’t actually work?

    (That’s unless you are one of the multitude of public servants who are getting well paid whilst the system they operate doesn’t work)

    Banana logic or what?

  • @Martyn – Back in 2011 the Land Registry planned to revalue all properties (see Property revaluations to start in 2012) and it was estimated that it would take five years.

    Back in 1980 agricultural land had little value, but as land use has changed over the years, some of this agricultural land is now in a residential zone. This has resulted in its building density increasing and as a consequence the market value of such land has increased many times.

  • Gavin Jones says:

    Martyn.

    I take it that in short you’re saying that it’s one unholy mess and given past record unlikely to be resolved this side of the next millennium?!

    Naturally, you’re correct.

  • Martyn's says:

    Of all the Troika/Bail-out tax-raising initiatives this one seems to have become incredibly convoluted – and given the history of IPT and the zany recent developments it now seems even more so! Weird indeed that when the Cyprus property markets are in complete dissaray – in fact in some areas/sectors there is, it seems, presently no market at all! – the Government had, very belatedly, decided to ‘milk the sacred property cow’. And how.

    Add to the above re ‘1980 values’ and the belated switch back to these, as opposed to the originally proposed Island-wide ‘revaluations’, and the waters get even muddier. There are many of us with ‘traditional Cyprus properties’ that, with various additions and improvements, have 1980 values that in no way reflect even today’s ‘bashed-out’ ‘values’, and that multiplying by ‘3. something’ (RPI) would still produce, frankly, in many cases ridiculously low ‘present day’ values. Yet others, presumably, have relatively New properties that, one way or another!, have been assigned considerably more ‘realistic’ Taxable Values, some of these considerably Higher than what those properties are now ‘worth’?

    So, yes!, very probably, the entire ‘property taxation’ issue needs a complete re-think, overhaul. So many different taxes and charges, different Departments collecting them, no understandable policy or strategy. And let’s not forget the commitment to ‘sort out’ the Title Deeds fiascos whilst reviewing all this!!

    So, enter the Consultants, the Advisers, a return visit to the Cyprus sun by the Troika people, consultations with all and sundry, and, very likely, more rather than less Civil Servants, and it might be that the Gas is actually flowing before anything sensible – and implementable – gets agreed.

    A complete overhaul, Yes! but How? – and by When?

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