THE CABINET yesterday decided to exempt immovable property worth up to €5,000 at 1980s values from the new taxation.
In one of several decisions taken during the meeting at the presidential retreat in the Troodos mountains, the cabinet also scrapped the minimum amount of €75 for immovable properties worth between €5,000 and €40,000, which will now be taxed at 0.6 per cent on the 1980’s value.
From next year, the immovable property tax (IPT) will be based on 2013 values.
The IPT is an obligation assumed by Cyprus as part of its €10 billion bailout agreement. The state expects to collect between €105 million and €110 million.
For 2013, the Inland Revenue Department (IRD) will tax owners with properties registered in their name based on the 1980 value.
Government spokesman Christos Stylianides said yesterday the cabinet’s decision aimed at addressing imbalances in the taxation which would have forced anyone owning any piece of land – no matter its value – to pay tax.
He said that the owner of a plot of land on the mountains would have been called to pay at minimum a flat fee of €75, just for having “(say) a field with three olive trees”.
“The state considers the administrative cost to be too large for such properties of insubstantial value,” Stylianides said. The changes “reduce injustices and the distortions of the current legislation,” he added.
Stylianides said that in the process of updating property values for taxation purposes, the land registry noted they would surpass the tax targets agreed with the troika of lenders by some €10 million.
“In this way, this amount is returned to the owners of low-value immovable property,” Stylianides said.
In effect, authorities have decided to forego some of the additional revenue that would have been raised, scrapping the flat minimum fee of €75 for properties worth up to €40,000 and leaving a tax free band for immovable property worth less €5,000 at 1980 values.
Opposition party AKEL hailed the cabinet decision, which it said was a response to a “popular reaction against that unfair and levelling taxation”.
How do non-residents pay?
Earlier today I spoke with the Chief Revenue Officer at the Inland Revenue about the problems faced by non-residents in paying their Immovable Property Tax.
1. Non-residents owning property should send an email to [email protected].mof.gov.cy stating:
– Their names and contact details (permanent address and telephone number)
– Details of the property (Land registry reference on its Title Deed and address)
The Inland Revenue will send them the forms to complete and return. If these are in Greek, please visit Money off your Immovable Property Tax to get English-language translations.
2. Only the owners of property (i.e. those with Title Deeds) are required to pay IPT to the Inland Revenue.
Immovable Property Tax 2014
Sensational rumours abound that, because the basis on which Immovable Property Tax is calculated will be revised next year, property tax in future years will increase dramatically.
Such rumours are totally unfounded!