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Immovable Property Tax reductions

Owners of property in Cyprus valued below €200,000 will be exempted from paying Immovable Property Tax under a bill approved by the Council of Ministers yesterday according to a government spokesman.

property valuesA BILL exempting property valued up to €200,000 from immovable property tax (IPT) was approved by the Cabinet yesterday.

Speaking to the press after the session, deputy government spokesman Viktoras Papadopoulos said that for all other properties, valued in excess of €200,000, the tax levy would be reduced to 0.1 per cent.

Current legislation calculated property tax using 1980 valuations, levying a tiered tax from 6 to 19 per cent, depending on value brackets. Revised property values to reflect 2013 prices have now been established, meaning the government can afford to adjust tax brackets accordingly.

“Previous legislation exempted 40 per cent of property owners, whereas this year 54 per cent will be exempted,” Papadopoulos said.

“Following the updating of the total tax base and the valuation of all properties with 2013 prices, the government can drastically reduce tax coefficients and increase tax-exemption brackets without impacting revenue targets relative to 2013,” he added.

“For this reason, the Council of Ministers approved a bill proposing the exemption of property valued up to €200,000 from property tax. For all other properties, valued in excess of €200,000, the tax coefficient applicable is reduced to 0.1 per cent.”

Papadopoulos added that “in the same spirit, the Council of Ministers approved a bill amending the Municipalities Law, so that municipalities can afford to adjust the tax coefficient on municipal fees for immovable property from 0.15 per cent to 0.022 per cent, in order to fall in line with the Land Registry’s 2013 prices.”

Asked to explain how the tax base had been broadened, he said updating values and prices and recording all properties that had not been registered – and thus were not taxed – will now be subject to taxation.

“Therefore, the tax base can now be broadened, and the tax-exempt base can also be broadened – from 40 per cent to 54 per cent,” he said.

Immovable Property Tax

Readers' comments

Comments on this article are no longer being accepted.

  • @Costas Apacket on 2014/07/05 at 7:56 pm – The government is currently discussing a temporary 50% reduction in Property Transfer Fees – see Property Transfer Fees reduction.

    This suggestion was made in November 2011 by Andreas Symeou a former senior official at the Land Registry and architect of the ‘new’ Specific Performance law that was introduced in 2011 – see Transfer fee reductions could increase public revenue.

  • Costas Apacket says:

    Nigel Howarth on July 5, 2014 at 11:20 am – Thank you Nigel.

    I knew that this was the case for Title Deed Transfer Tax, but was not sure for IPT.

    Hopefully this should mean that we pay nothing unless those nice people at the Land Registry use inaccurate or unfair valuation methods.

    Surely not.

  • @Costas Apacket on 2014/07/05 at 11:04 am – If a property has a value of €400,000 then each joint owner (assuming there are two) will be exempted from paying IPT as their share will be valued at €200,000; below the threshold at which the tax becomes payable.

  • Costas Apacket says:

    I wonder if dual ownership will reduce the IPT payable or will it stay as at present?

  • Hani Chehaiber says:

    Dear Sirs
    Property prices will keep falling as long as bank restrictions remain in place; and, bank lending is not available. It is a lose lose situation to property owners and banks.

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