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Saturday 11th July 2020
Home News Property revaluations to start in 2012

Property revaluations to start in 2012

UNDER the Cyprus ‘Immovable Property Tax’ laws 1980-2004 all property owners, regardless of whether they’re resident in Cyprus or not, are liable to pay an annual tax based on the total value of all the ‘immovable property’ (houses, apartments and land) registered in their name.

Immovable Property Tax (IPT) is calculated on the Land Registry’s assessment of the market value of a property at 1st January 1980 and is paid annually the Inland Revenue Department. In addition, this 1980 market value is used to calculate an annual property tax payable to the Community or the Municipality in which the property is situated. Local councils have the power to raise and set these local taxes which are typically in the region of 0.15% of a property’s 1980 market value.

The government has recently announced changes to the IPT tax bands, and these will come into effect in 2012:

These changes will not affect the amount of the local property tax payable to the Community of Municipality – and they are unlikely to affect the amount of IPT paid by owners of a single property to the Inland Revenue; but they could affect those owning a number of properties. To check whether these changes will affect you, simply add the 1980 values shown on each of your Title Deeds; if the total is less than €120,000, you will not be affected.

These IPT changes will undoubtedly affect a number of the Island’s property developers as they are the registered owners of property whose value runs into many millions of Euros. Some nefarious developers fraudulently demand money from those who have yet to receive their Title Deeds claiming that it is to pay their IPT and this illegal practice may continue and possibly proliferate as a result of these changes.

Property revaluations

FOR some years now, it has been recognised that the 1980 values are out of date and bear no relation to the worth of a property. Market values have increased dramatically over the past 31 years and the levels of increase vary across the Island.

As a consequence, the Department of Lands and Surveys plans to revalue all property on the Island starting in 2012 and will set the ‘new’ market values as they stand on 1st January 2012, which will be used for the purposes of taxation.

Earlier reports on this subject suggest that it will take up to five years for the Department to complete the revaluations.

Statistical information for the Department provides some idea of how property prices have risen since 1980 and the increase factors are presented in the chart below.

For example, a house in Paphos with a 1980 market value of €90,000 will have a 2012 market value of €80,000 x 7 = €560,000. (This figure must be treated with caution as even within the Paphos District property value increases will vary in different areas.)

We hope that once the Department has completed the revaluations that the government revises the IPT bands; but downwards this time please!


  1. Nigel,

    Thank you for your earlier opinion and comment – much appreciated.

    Two other questions, please:

    How do I find out if my developer has been paying IPT and that his payments are up to date?

    If my developer has tax debts on an N50 Survey Report from the Land Registry would one be correct to assume that they were in respect of IPT or could they be some other unpaid tax?

  2. @Steve – the developer should pay his IPT every year as required by the law. But there are some who do not do this and they are fined for late payment – I think it’s 7% or 9%. In your example if the developer does not pay IPT for 15 years, the fine mounts up!

    The honest developers pay their tax on time and charge buyers correctly and provide them with the necessary paperwork allowing them to reclaim IPT overpayments from the Inland Revenue. The know the system is crazy, but this is how it works.

    The ‘crooks’ who do not pay their taxes until deeds are issued expect buyers to pay their fines as well, while others charge a percentage of the sales price. These, of course, refuse to supply the paperwork necessary to reclaim any overpayments and buyers are often held to ransom as these developers refuse to transfer title until their demands are met.

    You DO NOT need to have a residents permit (of any colour) to act as an executor – this is a myth perpetuated by unscrupulous lawyers!

    But you cannot reclaim VAT on your first home in Cyprus unless you are a resident. But if you were to set up a business and that business buys the property, it is possible to reclaim the VAT even though you are not a resident. Similarly with IPT, I believe.

  3. Suppose a developer has 100 properties, all valued at just below the threshold for Immovable Property tax and which are awaiting title deeds for 15 years. The developer will have paid IPT on the properties for the whole of that time and when transfer time eventually comes I suppose he will want his IPT outlay refunded by the new owners, who, if they had owned the properties from day 1 would not have paid this tax.

    Now in the blurb that the developer gave to me it stated something about the new owner being able to apply to the tax authorities for a refund of the tax paid (if it actually had been paid to the tax man, that is).

    All this doesn’t sound too dangerous, but I read somewhere that recent Cyprus legislation requires, inter alia, that a yellow residents permit is produced for reclaiming VAT on property purchases, reclaiming IPT and acting as an executor of a Cyprus will. Many property owners do not have a residents permit, so one must assume that they will lose out, the biggest losers being those who have tainted title deeds and will have to repay the developer IPT on a worthless asset and cannot recover the IPT from the taxman.

  4. @Gandolph – just because the values of properties are being re-assessed doesn’t necessarily mean that the amount people will have to pay will increase.

    A similar reappraisal was carried out in the UK which resulted in the introduction of the now familiar ‘Council Tax’. The Council Tax was the successor to the very unpopular Poll Tax (Community Charge) which contributed to the downfall of Margaret Thatcher following the 1990 Poll Tax riots in London.

    I doubt that the Cypriot government would want a similar situation in Cyprus.

  5. @jan – I think it unlikely that even in today’s depressed market that your property will have fallen below its 1980 valuation.

    Recent price falls will probably have taken the value of your property back to its 2003/4/5 value.

  6. @Kufrahdog – you raise an interesting point. If a property suffers from major planning infringements that prevent it from being sold, it would have, in my opinion, no market value. Therefore no transfer fees or other taxes based on its market value would be payable.

    It will be interesting to see how the situation develops over the coming years.

    And yes, it is possible to contest the Land Registry’s valuation.

    It is not unfair or unreasonable to pay tax to different authorities. This happens in the UK where you have parish councils, district councils and country councils collecting taxes.

  7. What makes me think that the lawyers will be rubbing their hands with glee at the prospect of legal challenges to these new taxes and valuations? I also wonder how many of the ‘locals’ do or will actually pay these taxes anyway.

  8. Another example of Cyprus shooting itself in the foot and pricing itself out of the market with regard to foriegn investors.

    It makes no sense if the government goes to such great lengths encouraging us to move here by offering tax benefits and duty free cars etc and then raises it’s taxes to the point where they are unaffordable.

    And how would the government suggest the ordinary people of Cyprus pay these new taxes?

    Do they want to stimulate the Cypriot building industry or destroy it all together? They’ve seen the effect of foreigners giving the island a wide berth with the knock on effect that has on local shops and business’s and this crazy scheme will just be another nail in the coffin of Cyprus.

    Will the last person leaving turn out the light !!

  9. Nigel,

    One assumes that when the Department of Lands and Surveys (DL&S) award ‘new’ market values to all properties effective from 1 January 2012, they will take into account whether or not title deeds are endorsed with details of infringements below and above the amnesty’s threshold of 30% in respect of an overbuild. If my assumption is correct there is an implication that the DL&S would have full knowledge and visibility of the non-compliance of all developers with respect to planning and building regulations as they relate to infringements defined under the amnesty. Should the ‘new’ market values determined by the DL&S not reflect the lower values that endorsements on title deeds should attract, one must ask if there would be a right to appeal an ‘overvalued’ property? And if the DL&S have evidence of fraudulent activities by developers or owners, why would they or some other body not prosecute the wrongdoers?

    Another point: The Cyprus state imposes an immovable property tax on property; the Community or Municipality imposes a local tax on the same property. One has assumed that it is unfair and unreasonable to tax the same asset twice. Would the EU have something to say about this being unlawful or not complying with some Directive or other?

    I would be most grateful to receive your opinion and comments.

  10. These so called 2010 property prices are quite ridiculous, haven’t they heard, property prices have dropped!!!!!!! My house has a 1980 value of 120,000 and there is no way I could sell it for 840,000. If I could I would be off this island in a blink!




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