- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Little progress on Immovable Property Tax debtors

Cyprus Immovable Property Tax debtorsACCORDING to information received by Phileleftheros, thirty two land development companies and hotels that owe the state €9.6 million Immovable Property Tax plus interest have paid a mere €215 thousand to date.

The Inland Revenue Department was reported as saying that only 18 of the 32 companies had responded to the Inland Revenue tax notices – and of those 18 only two have paid the full amount owed after errors in their tax assessments were corrected.

The same source reported that the majority of the companies have reached an agreement with the Inland Revenue to pay a proportion of the tax they owe when a property is transacted.

However, these agreements do not prevent the Inland Revenue from taking civil action through the courts to place ‘memos’ on properties owned by the company. Such ‘memos’ will prevent their properties being transacted until their tax debt is paid.

This move by the Inland Revenue Department to place ‘memos’ on properties owned by these companies will further delay the transfer of their titles to their rightful owners, if the companies do not pay their tax obligations promptly.

(We understand that the Inland Revenue has already placed ‘memos’ on properties owned by some of these companies for other unpaid taxes.)

Editor’s note

Where a Court has issued a judgment in favour of a creditor ordering a debtor to pay a specified amount of money to the creditor, the creditor may register a charge with the Department of Lands & Surveys against any immovable property registered in the name of the debtor as security for the recovery of the debt.

The encumbrance created by registering this judgment is known as a “memo” and it effectively prevents the transfer of property owned by the debtor, until such time as the debt has been repaid or the memo removed.