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Property tax bills hit obstacles

Land registry property tax

Limassol District Lands Office

THE submission of the two government bills revising property tax coefficients to next week’s plenum has come under question as yesterday’s session of the House interior committee revealed several concerns with regard to the way property revaluation to 2013 prices was made.

After the session, committee chairman Yiorgos Lamaris said that committee members also expressed reservations with regard to a bill stipulating that local authorities will be required to reduce property taxation from 0.15 per cent to 0.022 per cent, in order to take account of 2013 prices.

Until now, properties were valued at 1980 values for taxation purposes, but these were revised by the Land and Surveys department to reflect 2013 values. A land registry official told the committee that some areas saw property values revised at six times their previous value and others at 36.

“An initial view is that the process through which property prices have been revised has not been adequately substantiated,” he said. “The Land Registry and others failed to provide convincing explanations as to how it was done.”

One example of such “unconvincing explanations”, Lamaris said, relates to on-the-spot appraisals that involved reviewing only the exterior of premises.

“It is a matter of concern with regard to the number of objections to revised property values that may be received,” he explained.

The government bill provides for the exemption of properties worth up to €200,000 and lower tax rates for properties valued above this threshold.

But Yiorgos Pantelis, who attended the session representing the Finance ministry, said that despite the lower rates there may well be cases where property owners will be called to pay a higher tax than last year, due to the upward revision of prices. One example, Pantelis said, would be a property valued as an empty plot last year when in fact it was a house.

Lamaris said he has called on parties to reflect on whether they will proceed to vote on the bill next Thursday, and noted that a government bill submitted yesterday to the House Finance committee is also pending.

Committee member Yiorgos Perdikis also expressed reservations on the potential increase of local authority property taxation based on the revised valuation.

“The bill’s provisions cause justified concern that while property taxation may indeed be reduced, municipal taxes may increase,” he said.

The government’s 2013 revenues from property taxation were €100m, which is also this year’s target amount.

property tax