ACCORDING to information allegedly leaked from Parliament, the Inland Revenue Department has recommended that the Immovable Property Tax Act of 2013 be extended for a further year, which would mean collecting IPT based on 1980 values as in the past.
However after some consideration, Parliament has said that there is a need to revise the 2013 Act despite the Inland Revenue’s recommendation.
The continuation of the current regime is favoured by the majority of political parties as they consider that draft bill proposed, which is based on 2013 property values, shifts the burden of taxation unfairly. (see New Immovable Property Tax lies).
AKEL, Environmentalists and some other parties are expected to table amendments that would raise last year’s tax-free threshold from €12,500 to €40,000.
George Perdikis of the Green Party has been reported as being in favour of extending the 2013 Act with amendments that would reduce the IPT collected from €138 million to between €90 and €120 million.
Apparently, efforts are being made to include the 299,000 newly discovered properties into the mix, but these will also need to be taxed at their 1980 values.
Protecting property developers
DIKO MP Angelos Votsis is expected to submit a draft bill requiring those who have deposited their contracts of sale at the Land Registry but who have yet to receive the Title Deeds to pay the Immovable Property Tax due rather than the developers. (A similar proposal was submitted last year).
Other possible options
Several options for setting the tax based on 2013 property values have been leaked, including:
- Tax free threshold set at €100,000 and remaining taxpayers pay at 0.11% (expected to generate €136 million).
- Tax free threshold set at €130,000 and remaining taxpayers pay at 0.11% (expected to generate €127.9 million).
- Tax free threshold set at €130,000 and remaining taxpayers pay 0.09% for property holdings valued up to €500,000, 0.1% for property holdings up to €5 million, 0.13% for property holdings up to €10 million and 1.5% for holdings in excess of €10 million (expected to generate €125 million).
- Tax free threshold set at €100,000 and remaining taxpayers pay 0.09% for property holdings valued up to €5 million, 0.11% for property holdings up to €30 million, 0.12% for property holdings in excess of €30 million (expected to generate €138 million).
- Tax free threshold set at €130,000 and remaining taxpayers pay 0.11% for property holdings valued up to €5 million and 0.12% for property holdings in excess of €5 million (expected to generate €129.9 million).
It is possible that Parliament will be unable to reach agreement before the summer recess and that a decision will be taken in October.