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

Yet another Immovable Property Tax scam

YET ANOTHER Immovable Property Tax (IPT) scam in Cyprus has come to light. A magazine produced by a well-known Paphos-based property developer includes the following information on IPT for potential buyers in its advertising literature:

There is also an annual taxation, Immovable Property Tax, which the registered owner is required to pay based on the value of the property. The rates for these are as follows:

Fraudulent Immovable Property Tax table

This information which, needless to say is totally inaccurate, has resulted in some people paying as much as 15 times the amount of Immovable Property Tax they should have been paying to this particular developer.

How much of this overpayment has ended up in the developer’s pocket and how much has been paid to the Inland Revenue Department, we will leave you to guess!!

Here is what the magazine article should have said:

There is also an annual taxation, Immovable Property Tax, which the registered owner is required to pay based on the assessed value of the property as of 1st January 1980. The rates for these are as follows:

Correct Immovable Property Tax table from the Cyprus Inland Revenue Department

As you can see, there is a significant difference!!

How should Immovable Property Tax calculated?

IMMOVABLE Property Tax in Cyprus is a bit like the old rating system in the UK, which was also based on assessed 1980 property values.

Note that a developer’s total Immovable Property Tax liability isn’t calculated on a property by property basis; it is calculated on his total property portfolio. Similarly, if someone were to own two houses, their Immovable Property Tax liability would be calculated on the total value of both properties, not the sum of the Immovable Property Tax on each of them.

Reclaiming legitimate Immovable Property Tax overpayments

Once a Title Deed has been issued for each of the properties and ownership has been transferred to their buyers (i.e when a buyer has paid the Property Transfer Fees and the Land Registry has issued a Title Deed bearing their name as the property’s registered owner) buyers may claim a refund from the Inland Revenue Department for any overpayment they may have made to their developer.

However, the Inland Revenue will only refund legitimate overpayments; it will not refund illegal amounts charged by property developers as shown in the example above.

Anyone who has been charged illegal amounts of Immovable Property Tax should report the matter to the Cyprus CID; fraud is a criminal offence!

Those wishing to reclaim legitimate overpayments of Immovable Property Tax should read this letter from the Ministry of Interior.