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Tardy developers fail to pay IPT

According to an official from the Inland Revenue Department only a small number of property developers had settled their outstanding Immovable Property Tax (IPT) obligations.

Tardy developers fail to pay IPTLAND developers have so far paid only a fraction of their immovable property tax (IPT) for 2014, with reports saying that just €328,000 out of a total of €4.2 million was paid.

In a story run by daily Phileleftheros, a high ranking official with the Inland Revenue Department, Renos Ioannou, is quoted as saying that out of the 214 land developing businesses only a few had settled their outstanding IPT obligations.

This comes a year after the state agreed to facilitate land developers so that they could pay the IPT. In 2013 land developers were required to pay a €7 million in IPT but failed to do so, arguing that the required tax was too steep.

The state reviewed its property value estimation to accommodate the companies and even excluded properties the companies didn’t have a title deed for. Despite the revised taxation, land developers still failed to pay their taxes.

Their unwillingness to pay comes in stark contrast with homeowners, 79 per cent of which paid their taxes in time resulting in a €88 million money injection for the government.

The 214 companies are not the only land developers in trouble. A total of 380 land developers failed to properly file their paperwork so the Inland Revenue Department could issue an estimate for IPT and have not yet responded to requests by the IRD to do so.

In October, the House of Representatives approved extending the deadline for paying the IPT until the end of the year, also extending the 15 per cent discount awarded to companies and homeowners who settle their affairs in time.

Tardy developers fail to pay IPT

Commenting on the article in today’s Phileleftheros, the Cyprus Land and Building Developers Association said that the payment deadline had not been reached and therefore it would be good to wait until the revised deadline. In its announcement the Association also said that a large number of its members had already paid the tax.

Readers' comments

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  • Adam Lomas says:

    I am frankly quite angry that 78% on homeowners (presumably many expatriates) have paid their IPT, and yet the (Cypriot?) developers continue to flout the law, on top of which for years they have been accused of “fleecing” home owners on paying back IPT. When is this government going to face reality and force their own people to obey the law. Until that happens the credibility of Cyprus continues to suffer and the housing market will continue to be depressed.

  • MartynG says:

    Stuart, Peter & Mike (below) together have it just about Right. I agree, very poor, totally inappropriate, use of the word ‘Tardy’: this particular article addresses just one of many deep-seated problems within the Cyprus psyche and culture:

    There are deeply ingrained fault-lines thought Cypriot cultures that amount to a Massive collision of inter-related problems – that, sadly, are going to take, probably, a generation or two to unravel, remedy -if ever!

    Anyone who hasn’t seen or read Petros Florides ‘Cyprus’ Seven Deadly Sins‘ could do a lot worse than go to and read the whole piece.

    For me, and many others, he has captured the ‘wrongs that need to be righted’.

    But in a country, culture, governance ‘system’ that is so ‘out of kilter’ with more modern progressive and structured approaches, where, honestly, do you make a start…….?

    (It reminds me of the one about the Limerick man in his native Ireland, when asked by a stranger to tell him how to get to New York, replies: “Well, I wouldn’t start from here!”)

  • @Frank on 2014/11/16 at 3:42 pm – You should not reimburse a developer the IPT he has allegedly paid to the Inland Revenue until he supplies you with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property you purchased.

    Please refer to this letter from the Interior Ministry.

  • Frank says:

    Nigel Howarth says: November 16, 2014 at 8:21 am @Andrew Chambers on 2014/11/16 at 12:07 am – Yes, you should pay IPT. Please refer to Paying Immovable Property Tax 2014.

    But, Nigel, should someone who has not received their Title Deeds ‘reimburse’ a developer for IPT supposedly paid by the developer in previous years (pre-2014); if that developer cannot provide proof that the tax was actually paid to the Inland Revenue? This article strongly suggests that such payment to a developer may not, in fact, be a ‘reimbursement’ but a donation toward the developer’s profits.

    Assurances from a developer that such payments will be refunded by the Inland Revenue in due course are worthless. You cannot be refunded sums which were never paid in the first place.

  • Mike says:

    So let’s gets this into perspective; developers, and we understand it is not all, owe just under €4 million for 2014 and around €7 million for 2013. Should we not be asking what if anything the IRD is doing to secure payment through the courts.

    Why have they not applied for winding up orders against those owing their 2013 obligations? They obviously have assets which could at least be seized to pay some if not all of their debt. If history teaches us anything we might assume they have done nothing constructive as if after a year the €7 million is still owing. All their reluctance, to enforce the law and protect the public purse, does is facilitate the debtors to redistribute and hide their assets. Would this not be a case of maladministration or abject failure, why does the taxpayer constantly have to support those intent on defrauding the country – get rid of then, drive them out of business as they clearly have no business being in business, at least not in Cyprus or the rest of the EU.

  • Peter Davis says:

    Why should they pay?

    Their first excuse will be the occupier is responsible, and second one what will happen to them?

    Do you think the Inland Revenue will follow up and make them bankrupt/insolvent?

    The reality is nothing will happen. Taxes here are a form of payment to the Government, if you feel up to it.

  • Stuart says:

    Describing such developers as ‘tardy’ demonstrates exactly what is wrong with Cyprus in its failure to get to grips with this particular problem. These developers are not ‘tardy’, they are ‘anarchic’ in their attitude to civil discipline and clearly see themselves as invincible.

    This comes in response to a weak and inept government which, instead of enforcing the law, accommodates developers’ complaints that the tax is too steep, property valuations are too high and properties without Title Deeds should be exempt from IPT – a classic example of the tail wagging the dog.

    Extending the deadline by another month and offering a 15% discount for prompt payment is hardly likely to produce a sudden change of attitude by these rebels whose wilful refusal rather than culpable neglect is all too apparent and leaves them set to enjoy yet another happy Christmas.

  • @Andrew Chambers on 2014/11/16 at 12:07 am – Yes, you should pay IPT. Please refer to Paying Immovable Property Tax 2014.

  • Andrew Chambers says:

    i haven’t received my title deeds…….should I pay the IPT?

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