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.