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Property tax farce

The Cyprus government has changed its proposal regarding Immovable Property Tax because, according to media reports, municipalities have already started to send out property tax notices.

Cyprus property tax farceTHE CYPRUS government has changed its initial proposal for Immovable Property Tax reform and has abandoned its bill scrapping property taxes paid to the local authorities.

Under its revised proposals Immovable Property Tax will be calculated at a flat rate of 0.035% on 2013 property valuations. The proposed changes will bring in an estimated €30 million in revenue, plus a further €15 million collected by local authorities.

According to some media reports the government has revised its proposals because the municipalities have started the process of issuing their property tax demands.

The various political parties have each put forward proposals for revising Immovable Property Tax.

AKEL has proposed a progressive taxation system; the higher the property’s value, the higher the tax rate. Other political parties agree that the tax system should be progressive, but disagree amongst themselves how the tax burden should be distributed.

Earlier this week DISY proposed that Immovable Property Tax should be scrapped completely and that the revenue lost could be recovered by other means, including the rationalising of pensions paid to state officials.

However it appears that DISY has had a change of heart and has proposed that the tax is scrapped in 2017. For 2016 it has proposed that IPT should be based on 1980 values, but with a ‘special discount’ of up to 75 per cent.

Numerous proposals have been put forward for consideration and these will be discussed next week. MPs have not ruled out the possibility of new proposals being put forward for discussion as the property tax debate rapidly degenerates into a farce.

Readers' comments

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  • embapahos says:

    Dear Nigel, what if the land reg suggested as they did to me that paying the IPT for 2016 back in April would not be a bad thing as it would so to speak mean one less obstacle when it came to my application as a trapped buyer for deeds….I barely recall that the tax office said “if by the time the deadline comes round there have been reductions in the tax, then you can claim back the overpaid tax….”

    Sad funny thing is I am sure when ‘they’ run out of cash they will simply look to ipt again going forward, but lets not complain…less taxes are better.

    Ed: The Tax Department is keeping a file for each individual without the deeds who pay IPT. Any overpayments/underpayments will be resolved once the deeds are issued – see Immovable Property Tax payment and collections.

  • embapaphos says:

    Hahaha things are constantly changing, total joke if you are one of the few foreign investors, are interested in property ….and what to know how much the property is going to cost me in terms of taxes…..

    Even for someone living locally it is more than a farce, not to know what tax who will pay….

  • Debbie says:

    How can I pay my local property tax online or by post as I tried to pay this early but was not allowed to and I may not be in Cyprus to pay in person?

    Ed: Assuming that you have registered with the Tax Department and completed the form saying you want the IPT notice to be sent to your UK? address, the Tax Department will send you a notice and you can pay on-line via JCCSmart once you’ve set up an account with them.

  • embapaphos says:

    Problem with Cyprus in general is they talk the talk but don’t walk the walk. Gut feeling was the reduction in ipt by 50% compared to last year’s bills was not going to happen, yet the media dressed it up as if it was a done deal! the media has a massive role in misinforming the public snatching at any comment these jokers spew out ….

    Link between developers-banks-and MPs has long been established, how this has worked out for all involved gets a bit confusing when it comes to the trapped buyers law and who really benefits. Seems those whose properties had deeds but where trapped due to developer having mortgaged the land they were built on must be happy, those with no deeds at the time of applying for deeds via the law (no deeds due to no cert of final approval etc) due to planning infringements etc get tainted deeds and the burden of having to remedy an awol developer’s wrongdoings or end up with property they cannot sell re-mortgage etc. Whether having deeds you can’t do much with in your name is better than having no deeds at all is a big debate.

  • Phill Dann says:

    Confused I am. I bought off plan in 2008, completed in 2010, hoping (again) for title deeds in the next 6-12 months. I have paid some IPT amounts to the developer.

    Where does current situation with IPT proposals leave me?

    Ed: In the dark like everyone else. Have you applied for your Title Deeds as described in my article Applying for Title Deeds. If not, I suggest you apply asap.

  • Deanna says:

    @ Campbell F: Exactly my line of thinking (who owns the most land in this country? And still considers himself Chief Adviser to the government).

  • Kal says:

    No comment necessary….. your picture says it all. Would be funny if not tragic and scary.

  • Campbell Findlay says:

    A you know what and brewery spring to mind. Who tells who what to do in this country? The phrase about rationalizing pensions to government officials also jumped out.

  • Mike says:

    So what we are effectively saying is that all the time spent debating has been a total waste of time and confusion/incompetence rules. Comforting to note that not much has changed.

    Ed: That sums it up very nicely.

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