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Revised property tax bill announced

Details of the proposed property tax bill have been announced, but houses valued at many millions of Euros in a number of districts have not been included in the calculations as they have not been properly registered.

THE COUNCIL of Ministers today approved changes to a bill imposing a tax on immovable property as part of the bailout agreement with Cyprus’ international lenders.

If passed by Parliament, the tax will generate up to €131 million/annum.

According to Stockwatch, the revised annual rates are as follows and are based on the assessed value of property at the 1st January 1980.

  • Up to €12,500 – €50/annum
  • From €12,500  to €40,000 – 0.4%
  • From €40,000 to €120,000 – 0.6%
  • From €120,000 to €170,000 – 0.8%
  • From €170,000 to €300,000 – 1%
  • From €300,000 to €500,000 – 1.2%
  • From €500,000 to €800,000 – 1.4%
  • From €800,000 to €3,000,000 – 1.6%
  • More than €3,000,000 – 1.8%

However, government spokesman Christos Stylianides has admitted that there are shortcomings in the data used to assess the new tax rates.

For example, there are areas in Limassol, Nicosia and Larnaca where houses have been built that are worth many millions of Euros but no building permits have been issued for their construction; they are currently registered as lands and fields. Municipalities and Communities need to gather data on these properties by June to arrive at a final fill that includes them.

Further reading

Calculation of Immovable Property Tax yield for the fiscal year 2013 based on the revised rates.

Readers' comments

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  • @All – the IPT bill was approved by Parliament yesterday.

  • @George – the 1980 value of your land is shown on its Title Deed.

    As you and your wife each own a half, each of your tax liabilities will be calculated on 50% of the 1980 value. Currently, if that value is below €120,000 you are not liable for IPT.

    But I expect this may change once a revised IPT bill is voted into law.

  • George malekides says:

    Hi can you please tell me if I pay IPT on agricultural land that I have just outside Limassol. It is on joint names with my wife and bought it 2003 how would I know what it was valued at in 1980 thank you.

  • @Pippa – Yes I’ve seen the news (you can watch it here as well – in the right hand column). All parties have come out against the bill, but it has not been rejected.

    It will be voted on at a special plenary session of parliament on Tuesday.

  • Pippa says:

    @ Nigel, Did I not see on last nights news that the new bill has also been rejected?

  • @Pippa – this is a new bill, not the one rejected by parliament a few weeks ago.

    If this new one does not get through parliament on Tuesday, I don’t know what will happen.

  • Pippa says:

    Now that this has been rejected by parliament, what happens now as I understand this has to be in place to get the first part of the bail out money, assuming parliament vote yes on Tuesday? (if they vote no then we are in a very strange place!)

  • @Jim – the 1980 value shown on the deed is the full 1980 value of the property.

    As you and your wife own it jointly, you will each be required to pay IPT on €29,000. (It should show on your deeds that you own half a share in the property).

    So I would expect each of you to be paying €116/annum.

    BUT this may reduce once the numerous unregistered properties have been valued and added to the deeds.

  • Jim says:

    Nigel. My wife & I jointly own our house. We have a title deed each. On each deed the 1980 value is shown as 58,000 Euros. Is this the total value, or is it a half, so making the total 116,000 Euros?
    Thanks.

  • @steve – it is the registered owner who is responsible for paying Immovable Property Tax – to the Inland Revenue Department by the the 30th of September each year. Those paying late or failing to declare are usually fined.

    In your contract of sale it will probably say that you are responsible for paying all relevant taxes from the date you took delivery of the property. If this is the case the developer will expect to be reimbursed the IPT he has paid on your behalf.

    If you search for “Immovable Property Tax” in the search box at the top of this page you will find out how to deal with situations where nefarious developers attempt to claim excessive amounts from those who have yet to receive their deeds.

  • steve says:

    I have been told that I do not own my villa until the rest of the site is complete and a final completion certificate is issued. This has been on going since 2007 so who will have to pay the taxes ????????

  • @Peter & @Andrew

    The 1980 value of properties is assessed by the Land Registry using their historical data (which is not available to the public).

    I have a 220sqm bungalow with a 50sqm double garage and store-rooms on a plot just under 800sqm. It’s 1980 value as shown on my deed is €60,000.

    As I own the property jointly with my wife, I expect we will be asked to pay in the region of €240/year (which is a bit less than we pay in Community charges).

  • Peter Davis says:

    The 1980 price on our 3 bed villa is more than the 1981 price I paid for a 3 bed brand new house on the outskirts of London.

    Is 3 bed villa in a small village above Polis really worth more than a 3 bed house in outer London?

    And what will my Cypriots neighbours pay for their 3 bed villa across the road from me, built on his own land? I presume we are the same?

    Will there be transparency or will expats start at a stupid figure?

  • Andrew says:

    Will developers who have not obtained or transferred title deeds be responsible or will home buyers be burdened with many years of unpaid property tax?

    Is there a published list of valuations from 1980 by district? How do they decide the 1980 valuation. Most property in places like Paphos did not exist in 1980.

  • andyp says:

    I assume this will put some pressure on Developers to issue title deeds as they will be paying or will the Government continue to allow them to roll up the tax and pass it on to the true owner at a later date?

    Like the Pimco report on the banking sector the regulation/idiosyncrasies of the property sector is a complete farce.

  • Andy says:

    Why in 2013 do the authorities continue to use 1980 values? Does this not demonstrate an inability to move into the 21st. century? If Title Deeds are issued on the most recent valuation, why not use this latest up to date value?

  • Clive says:

    As to the unfairness of this system due to lack of credible data on property. Why not use the information from the electricity company. Virtually all properties, regardless of status, TD’S, no TD’s have power provided. Why not get the electricity organisation to tell the government what type of property is being supplied, villa, house, apartments, business etc. This data run against the Land Registry data should provide a first cut of “what’s out there”. Would also provide a mechanism of catching the illegals. Just a thought.

    Could also use the electricity billing system to collect the IPT, same as they do now for the national TV and radio.

  • @Martyn – As getting this sorted out was one of the conditions for Cyprus receiving the first tranche of the bailout, the government had to act quickly – and there was simply not the time to do it properly.

    The longer term requirement is to reform the whole Immovable Property Tax system (see Revised Cyprus EU bailout terms leaked).

  • Martyn's says:

    So they’ve decided to use 1980 values after all! Hardly surprising if they can’t or don’t want to, or haven’t got enough time to, arrange revaluation of the 400,000+ properties on the island (of which I read elsewhere over 100,000 are unoccupied!). Some owners, those say with traditional village properties that they have improved significantly since 1980, are going too be very pleased, others, with newish properties at high values are going to have to try and get money out of their Cyprus banks to pay some rather large sums.

    Oh, and its already admitted, I see, that there are shortcomings in the data being used. Surprise, surprise!

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