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Rich foreigners being fleeced over local taxes

The practice of councils fleecing foreigners continues despite a conclusion by the ombudswoman in her 2011 report that there was a prima facie issue of a possible indirect (covert) discrimination against them on the grounds of nationality/citizenship.

RESIDENTS of two luxury developments in the Paphos village of Kouklia are refusing to pay their local taxes in protest at huge levies they say are being unfairly placed on them by the local council.

Residents of Aphrodite Hills and Ha Potami (Secret Valley) – developments within Kouklia’s municipal boundaries – say they are being penalised for being “rich foreigners” by Kouklia council, which is demanding massive taxes of up to 400 per cent more than for similar sized properties in the village itself.

Residents say this situation is a remnant of the previous council and also due to changes in who is responsible for the upkeep of common areas in five star developments.

Lanitis developers were responsible for all charges at Aphrodite Hills until 2010 when this passed on to Kouklia council. Aristo developers are now in the process of issuing title deeds for properties in Secret Valley – which means responsibility is being passed onto the local council to collect all taxes.

But residents of the developments say the council is made up mostly of villagers from Kouklia, who refuse to make taxes a set rate across the board.

Local resident Tony Raphael, 66, a British expat, and his wife retired to their two-bedroom ground floor apartment in Aphrodite Hills four years ago as permanent residents, after buying the property ten years ago.

Raphael says he has stopped tax payments for the coming year’s bill and lodged a formal complaint to the Paphos district office, claiming rates imposed on residents in Aphrodite Hills are inflated and illegal.

“We are expected to pay €275 council tax (plus our rubbish collection payments of €75) to Kouklia council and yet a similar two-bed flat in the village has a bill of just €50. All we are asking for is parity.”

An angry homeowner of a property in Secret Valley, who wished to remain unnamed, said she has taken a similar course of action.

“I have written a letter of complaint to the district office, noting my concerns over ridiculously high taxes being unfairly charged by the council,” she said. “The situation is deplorable and we are being penalised because we are seen to be rolling in cash. I am being discriminated against because I have worked hard all of my life in other European countries and chosen to retire here, make my life here and spend my hard earned cash here.”

Raphael says he was unable to complain about the charges when rates were paid to Lanitis developers. He also withheld his objections to give the current community leader Michael Solonos, elected in December 2011 municipal elections, the chance to get the council tax reduced as he had promised to do in his election manifesto.

Raphael accepts that there are a number of enormous villas in Aphrodite Hills but added that there are also a number of “fantastic” villas in Kouklia village proper. He says the authorities see foreign residents as an easy target.

“We love it here and we wouldn’t have bought here if we didn’t feel comfortable enough to make Cyprus our home. We don’t want to live in ‘little Britain,’ but there are undercurrents of racism here and I don’t think it will ever be eradicated,” he said.

“I sent my letter of complaint to the Paphos district office a month ago, and I’ve heard nothing at all. I have instructed the bank not to make any payments towards our tax bill.”

Raphael has also informed Solonos.

But according to one councillor, British expat Raymond Smith, it seems the community leader’s hands are tied, as seven of the eight council members are residents of Kouklia village who are opposed to substantial rises in taxes for villagers.

Describing himself as the lone voice on the council fighting for the rights of expat residents, Raymond Smith says the current impasse smacks of discrimination.

“Even with the mukhtar’s backing, we are outnumbered as the rest of the community board is made up of people who live in the village,” he said. “The village refuses to pay any increases in local taxes and they have the attitude that they are poor Cypriots and we are rich foreigners. It’s been like this for years and it’s time that things have to change.”

Smith added that British expats are nicknamed ATMs by the locals.

“The taxes need to be worked out fairly for everyone. Some taxes need to be raised – for example for those living in the village – and some need to be lowered, for people living in other areas of Kouklia.”

And in keeping with his election pledge, community leader Solonos is sympathetic to the concerns of his foreign residents.

“The communities’ law was fixed back in 1999 and legislation desperately needs to be updated. The guidelines are not exactly specific. It states that the council may charge an annual fee of up to €854 for community services to each property owner. This is calculated by the council and legislation says this depends on the value of the property,” he said.

Smith explained that Kouklia village had extremely low taxes for many years partly because previous councils received millions from building permits needed to build the Aphrodite Hills and Secret Valley developments.

“However, the previous council spent €3 million building a football stadium and €1.2 million funding the team. Consequently the current council inherited virtually nothing,” he said.

According to Smith, in 2012 taxes levied by the council on Aphrodite Hills were by far the highest. Apartment and town house owners were charged the same – some €350 – while villas were charged between €600 and €850. In addition, each property also had to pay €75 euros for rubbish collection. Villas in Secret Valley were taxed at €250.

Villagers only had to pay between €15 and €75, plus the €75 for garbage collection.

Taxes for 2013 have seen increases in many cases. At Aphrodite Hills apartment owners now have to pay between €150 and €400. Town-houses have been re-classified and are now charged €600, with villas now charged between €700 and €854. In Secret Valley, taxes have risen to €350 for villas.

The taxes for Kouklia village have also risen, by a meagre €5-10.

“I have objected in the strongest terms over the inequality of these taxes, but the other seven members of the council refuse to pay a fair share of taxes saying the village is a poor family village with many unemployed and so they cannot afford to pay,” said Smith.

“But there are many wealthy people living in Kouklia and many of the properties in Kouklia village are comparable with those found in Aphrodite Hills.”

Solonos explained that the final decision rests with the Paphos District office as they have the authority to oversee complaints.

The Paphos district office was unwilling to speak to the Sunday Mail, except to confirm that the complaints had been received and were being examined.

Cyprus councils fleece foreigners

Readers' comments

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  • Robert Briggs says:

    If people feel they are being cheated and ripped off, perhaps the best thing to do is to contact a decent Lawyer to check things out.

    Deal with the masters & not the dogs eh?

  • @Cyprodite – Please see my web page – Immovable Property Tax and this letter from the Interior Ministry.

    If it’s a large development company, it will be paying IPT at the top rate of 1.9% – but you will need records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property to:

    a) Confirm you are being charged the correct amount.

    b) Submit an application to the Inland Revenue to recover any overpayments once your deeds have been issued.

  • Cyprodite says:

    I have received an invoice for immovable property tax amounting to €418.00 for a small 2 bedroomed semi in the Universal area from the developer. That doesn’t sound right to me. How and where can I query this amount?

  • UBoat says:

    Hi @ Jill

    I agree with you…. We have the same problem. It’s just not cricket old boy…… But as everyone knows the Cypriot authorities and the hangers on don’t play fair anyway. so what is the point in playing their game any longer. Just take the ball Bails and bats and go Home leave the country to rot.

    But that’s NOT what we all went there for … I don’t know the answer and neither do they that’s why they hide behind the bureaucracy and B…it

    Shame because it was a lovely place some years ago.

    Now Just full of greed and deceit, not just to us British either….

    Have a good Night

  • Mike says:

    As much as I agree complaints should be lodged I certainly wouldn’t hold out too much hope in achieving an equitable solution. I’m afraid to say that fairness and impartiality are alien to the Cypriot vocabulary and as such, sadly, a reason for not changing the charges by any tangible amount will always be found and presented. Having had dealings with the Ombudswoman’s office does not fill me with hope for those wishing to lodge claims of maladministration by a government department. Sorry!

  • Adrian Wright says:

    It would appear that the local council members are not so smart. Why if they are a poor village with a lot of unemployment have they spent 4.000.000 euros on a “poor village” football team. A community centre for the poor and needy would have been more fitting and cost a lot less.

  • @Jill – I suggest that you and other residents in the same situation complain to the ombudswoman – and also to Europe.

  • Jill says:

    We have had the same problem in Ayia Thekla which comes under the Sotira Council. Our Council tax rose to 450 Euros and only went down last year because we became a municipality. However, the charge for rubbish only is still 250 Euros. We wrote to the Council complaining when the charge was at its highest, especially as we had seen a bill from a village-dweller of 67 Euros!! We had even chatted with a young man from Sotira village who, when he found out we were from Ayia Thekla, said ‘Thank you, you are the people who pay our rates!!’ This is definitely discrimination but who can we turn to – they know full well there is absolutely nothing we can do….

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