AFTER weeks of tense negotiations, a majority of MPs voted in favour of a provisional Immovable Property Tax (IPT) bill earlier this week at a special session of the Cyprus parliament.
By revising the Immovable Property Tax framework, it has been estimated that the government will collect approximately €136 million.
Under the provisions of the bill, which is needed for Cyprus to secure the much-needed first tranche of a €10 billion bailout at the start of May, all registered owners of property will be liable to pay a minimum of €75.
Government spokesman Christos Stylianides has acknowledged that the authorities lacked the time to gather sufficient information to prepare a comprehensive bill – and that further information will be collected in the weeks ahead to ensure that any distortions are removed by the time a fairer final proposal is put before parliament by the end of June.
Stylianides noted that there are areas in Limassol, Nicosia, and Larnaca where houses worth millions of euros have been built which do not have building permits. At the moment, these are registered as building plots or agricultural land.
The provisional bill also penalises registered owners of property who fail to pay their Immovable Property Tax by 30 September each year. Originally the penalty was set at 20% on the tax due – but was reduced to 10% with a 10% reduction if the tax owed is paid 30 days or more before the deadline.
As before, IPT is calculated on the Land Registry’s assessment of the value of a property at the 1st January 1980; the new tax bands are as follows:
Assessed 1980 Property Value
Annual Property Tax
Accumulated Tax (Max)
Number of Owners
|Up to €12,500||0.60% (€75 min)|| €100||155,822|
|€12,400 to €40,000||0.60%|| €240||115,215|
|€40,000 to €120,000||0.80%|| €880||65,611|
|€120,000 to €170,000||0.90%|| €1,330||6,619|
|€170,000 to €300,000||1.10%|| €2,760||5,211|
|€300,000 to €500,000||1.30%|| €5,360||1,982|
|€500,000 to €800,000||1.50%|| €9,860||848|
|€800,000 to €3,000,000||1.70%|| €47,260||910|
|More than €3,000,000||1.90%||218|