REGULAR readers will be aware that the basis on which Immovable Property Tax (IPT) is calculated will change this year; the calculation will be based on the revised valuation as at 1 January 2013.
The details of the revised IPT rates and tax bands are still being debated by parliament, but they cannot be set until all objections to the valuations have been processed and finalised. Last October Interior Minister Socrates Hasikos admitted that mistakes were made during the property revaluations and that 4,671 objections had been received by the end of September 2014.
Initially, those wishing to appeal the valuation may phone the Land Registry help line on 77777730 and follow the instructions.
You will need to have your passport and details of the property handy. The Land Registry officer will check if there has been a mistake in the valuation while you wait.
If they say there is nothing wrong and you then decide to object to the valuation you have until the April 24 to file your objection, which must be submitted to the District Land Office by themselves or their representatives. They need to complete the relevant form – and submit it together with the appropriate fee based on the 2013 valuation of their property:
- For properties valued up to €100,000, the fee is €37.50.
- For properties valued between €100,001 and €500,000 the fee is €75.00.
- For properties valued between €500,001 and €1 million, the fee is €150.00.
- For properties valued in excess of €1 million, the fee is €357.00.
Even if your appeal is accepted, the fee is not refundable. Regrettably, this is the way it is in Cyprus. You end paying up for the mistakes/incompetence of other people and government departments!
(Note that you will need Adobe Acrobat to read the relevant form and to display an approximate English translation of each field, float your mouse over the yellow speech bubbles.)
The latest property valuations can be found on-line by following my guide at Cyprus property valuations now online.
Massive Immovable Property Tax hikes
Finally, irrational rumours have been spreading that massive hikes in Immovable Property Tax will take place this year, which apparently emanate from expatriates living in Paphos who seem intent on spreading fear, uncertainty and doubt amongst their compatriots.
As far as we are aware, owners of property valued up to €200,000 will be exempted from paying IPT, while the remainder will be charged at a flat rate of 0.1% on their property’s 2013 value. But note that this may change once all the objections to the valuations have been processed and finalised.
The amount of tax to be collected is set out in the Memorandum of Understanding:
“Ensure additional revenues from property taxation of at least EUR 75 million by: (i) updating the 1980 prices through application of the CPI index for the period 1980 to 2012; and/or (ii) amending tax rates and/or (iii) amending value bands.” MoU April 2013.
“Implement the recurrent immovable property tax for the tax year 2015 based on a General Valuation (GV) for all immovable properties, determined on the basis of tangible building- and plot related characteristics. The design of the immovable property tax should ensure a broad tax base and IPT proceeds not lower than in 2013.” MoU September 2014.
Simple question, if we don’t own our property because of developer mortgages on the land and so no hope of getting title deeds, why are we having to pay tax?? Are the government trying to add insult to injury! Surely it would be fairer for the developer to continue paying the tax until the title deeds have been handed over to the rightful owner ie me!
@Kath on 2015/04/21 at 11:23 pm – You are having to pay Immovable Property Tax because the law changed last year (see Cyprus MPs lunacy in action) and it now requires those who have purchased property, deposited their Contract of Sale at the Land Registry and taken delivery of the property to pay IPT.
On the plus side the figure you will pay to the Inland Revenue will be significantly less that the amount you would have paid to the developer because, as an individual, your IPT rate will be much lower than your developer. You will also avoid having to reclaim IPT overpayments from the Tax Office once you eventually get your deeds.
Hi Nigel
We live in the UK and would like to check our valuation. Do you have an alternative number that we could use to get through to the helpline as the 7777 numbers only work from a phone in Cyprus.
Thanks
Chris Falconer
@Chris Falconer on 2015/04/20 at 2:24 pm – You can find the valuation on-line by following my guide at Cyprus property valuations now online.
If you have any problems, get in touch with me via my contact page.
Nigel,
thank you for your clarification re disparities in valuation.
For your information, our residents committee has hired an agent (ex-land registry guy) who has done a lot of work with the developer, architect, municipality, banks etc. and who now thinks we are in a good position to get our deeds. We will finish the work that the developer did not do (mainly a green area adjoining the development) and pay outstanding sewerage and property taxes owed by the developer.
A lot of “horse trading” has gone on between agent, developer and the municipality, and it looks like each apartment will have to pay about 1800 euros to complete the deal. 29 out of 42 apartments are participating, we think this is a good deal, although fundamentally unfair.
Hi
Can anyone give me some guidance.
Re calculation of IMP tax, In 1980 the plot was worth 20,000 euros, (shown on our contract) however there have now been 10 villas built on them between 2004/5, there for I’m calculating that the IHP would be 2000 CYP and we would be exempt from paying the Property tax to the developer?
Many thanks
Sue
@Sue Streeter on 2015/04/20 at 11:03 am – You no longer have to pay the developer Immovable Property Tax that he has paid on your behalf. The law changed last year and you should now pay IPT directly to the Tax Office.
For more information, please see the article I published last October Paying Immovable Property Tax 2014
But you will need to reimburse your developer the IPT he has paid on your behalf in previous years, please refer to Cyprus Immovable Property Tax law for further information.
Nigel,
My wife and I own a 2 bed apartment which we bought in 2006 for £CY 58,000. We have no title deeds and the developer seems to have washed his hands of the development since the formation of a management committee. I got a valuation of 26,000 euros from the Paralimni tax office (they told me it was a guess really) in December 2014, and duly paid 140 euros IPT. My Greek Cypriot neighbour (sole owner) with an identical flat, went to Nicosia for his valuation, and subsequently paid 100 euros. I am not bothered about that disparity in valuation, but I am worried that this could lead to even bigger disparity (getting ever bigger) when the new rates come in. What should I do ?
@Mike_A on 2015/04/20 at 9:05 am – Firstly, as you do not have the deeds to the apartment, you do not own it. You will only become its owner once its Title Deed has been issued and you’ve paid the Property Transfer Fees to have it registered in your name.
Regarding the disparity in valuations, the Tax Office has opened a file for each deed-less purchaser who has paid IPT and any overpayments/underpayments will be resolved when the Title Deeds are eventually issued.
I have been through the protest previously and its a waste of time with land registry people, they cannot even explain on what basis they do their calculations of value. Prior to submitting my request of appeal I was informed that land registry may even raise their original estimation of value, I went ahead irrespective of that threat and received a response from my Lawyer that land registry had rejected my appeal and stuck with their original valuation, but were unable to inform me how they did the calculation?
@douglas on 2015/04/20 at 4:56 am – I think you objected to the Land Registry’s assessed market value for calculating the Property Transfer Fees? This is a totally different matter.
What you could have done was to have the property valued by a qualified valuer and put that as evidence to the Land Registry.
I agree with you that the lack of transparency with the Land Registry (and other organisations) is a serious problem – it results in distrust and suspicion.
Nigel, thanks so much for all your advice.
Unfortunately I do not have a lawyer or a friend in residence would I be able to send via snail mail ?
Best regards
Barrie
@Barrie Shaw on 2015/04/20 at 4:56 am – Your property developer may be able to help.
One other question Nigel,I live in Australia but have been working overseas for 18 months, I have just returned to find the letter from Leptos previously mentioned, would I be able to submit the forms via email or fax from Australia ?
Thanks Nigel,
Regards
Barrie
@Barrie Shaw on 2015/04/19 at 6:51 pm – There was a facility last year to submit the forms by email, but that closed. What you need to do is send the completed forms to your representative here in Cyprus (your lawyer perhaps – or a friend) and they can get things sorted for you.
Thanks for that info Nigel, the apartment is 2 bedroom with 2 bathrooms, so I guess from what your saying the valuation is correct. The apartment is in 2 names, My Wife & myself, so will there be any tax due ?
Thanks in anticipation,
Regards
Barrie
@Barrie Shaw on 2015/04/19 at 6:32 pm – Assuming that Immovable Property Tax will be levied at 0.1% of the property’s 2013 value, you and your good lady will each have to pay around €12.75.
Knowing what the valuation actually is would really help in deciding whether an appeal should be made. I don’t have my deeds (24 years plus) down the line and have no idea if officialdom has tried in any way to let me know i.e. have they approached the developer for details of the beneficial owner in order to write to me at my UK address? Tried Land Department website but cannot get it to work, says I need ‘Silverlight’ which I already have installed!
All my documentation IPT and Tax have been completed and sent by me which resulted in an IPT demand for just over 300 Euros. From the latter I was able to do a rough calculation as to the ‘valuation’ placed on my modest maisonette which appeared way out of line. After a few e-mail exchanges with the Ministry of Finance, it was conceded that no IPT was payable on a property of the size of my maisonette.
As ever, chaos reigns in Cyprus.
@Tony Ellis on 2015/04/19 at 5:49 pm – As you do not have the deeds to the property you do not own it and therefore you are not in a position to object to the Land Registry’s valuation.
Furthermore, as the Land Registry has not issued the property’s Title Deed (which will show its 1980 value) it has not been revalued.
Hi, I have an apartment at the Leptos development called Limnaria Gardens in Paphos, I paid CYP £106,000 in full upon completion and as yet, still NO TITLE DEEDS nearly 8 years on. I have had a form from Leptos and covering letter that says I need to complete the info & return to Tax department-Immovable Tax Division.
I purchased off the plan in 2003 and took possession in 2007, two years late according to the contract I had with Leptos.
Leptos have a given a 1980 valuation for the apartment of 25,451 Euro. this seems very high to me, is there a way of checking these valuation ? would appreciate any advice.
Thanks in anticipation,
Barrie
@Barrie Shaw on 2015/04/19 at 3:06 pm – If it’s a 2-bed apartment, a 1980 value of €25,451 is not unreasonable. But what you can do is provide the Tax Office with any information that would them assess the 1980 value of the property. E.g a description of the property, where it is located, area in square metres, etc.
You could also visit the Land Registry – the Title Deed may have been issued, but may not be available for transfer.
And you should have done all of this last year – see Paying Immovable Property Tax 2014.
Hi have tried this and found it did not work with Chrome but did with MS IE and also Firefox. The boundary problem is still there and my plot is not shown separately, it still just shows the whole of the development site. Will I eventually receive paperwork for IPT 2015, as paid last years using my estimate for the value?
@Freds on 2015/04/19 at 1:18 pm – From what you say it sounds as if your developer has yet to sub-divide the land into individual plots. Also, as you do not have the Title Deeds, you do not own the property – and as far as I am aware, only those who own the property can object to its 2013 valuation.