- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

IPT payment deadline & discount

IPT payment deadline extendedTHE HOUSE on Thursday passed a law extending the deadline for payment of Immovable Property Tax (IPT) to the end of December, with a significant discount for those paying their tax earlier, by the end of November.

For early payments by end-November, a discount of 17.5 per cent will be given, unless payments are made online or through a bank, in which case the markdown is 20 per cent.

The final legislation passed was as amended by the parties. Initially, the government bill entailed extending the payment deadline to the end of November and in addition offered an early-settlement discount of 15 per cent, 17.5 per cent if paid via a bank or online.

The new, November 30 deadline for early payment discounts was an amendment tabled by main opposition AKEL. It was approved unanimously.

But another AKEL amendment, providing for different discounts for different IPT rates, was defeated, as was also a proposal for exempting from IPT farming land worth up to €60,000.

The Greens proposed payment of IPT for 2015 in three interest-free instalments, the first of which would be paid this year. Socialists EDEK proposed exempting from IPT properties valued up to €30,000. Both proposals, intended to alleviate the tax burden of low-income persons, failed to garner the necessary backing in parliament.

The idea of increasing the discount came from DIKO, which argued that this would incentivise more people to pay their IPT and on time, thus also helping the state’s cash flow.

But during a discussion earlier in the week, the finance minister did not appear to be on board, as the fiscal impact of the greater discount had not been calculated.

According to data cited in parliament, last year the state collected €104m from IPT, local administration authorities a further €14m, while property transfer fees came to €53m, for a total of €171m.

In 2014, 79.9 per cent of eligible people paid their IPT.

Data showed that the lower the IPT rate, the higher the percentage of collection. For the 0.006 tax rate, the collection percentage was 92.21, 91.15 per cent for the 0.008 rate, 90.49 per cent for the 0.009 rate, 86.53 per cent for the 0.011 rate, and 82.08 per cent for the 0.013 rate.

The collection percentage dropped to 72.43 per cent when it came to the 0.015 rate, 65.85 per cent for the 0.017 rate, and only 63.11 per cent of those charged with the highest rate, 0.019, paid their IPT.