Cyprus Property News magazine for overseas buyers & real estate investors

Thursday 6th August 2020
Home Property Scams Developers continue Immovable Property Tax scams

Developers continue Immovable Property Tax scams

OVER the past few days we have received several emails complaining that property developers are trying to overcharge buyers for Immovable Property Tax (IPT) that has allegedly been paid to the Inland Revenue Department on their behalf.

Rather than developers basing their calculations on the assessed 1980 value of the property, as prescribed by the law, some developers are charging whatever they think people are prepared to pay.

Furthermore, these developers are refusing to allow the transfer of ownership of the property until this money has been paid; effectively extorting money by threatening to withhold Title Deeds to elicit payment.

It is relatively easy to check how much you should be paying the developer. Ask him to provide you with a copy of the Title Deed for the property.

About a third of the way down the Title Deed you will find the 1980 value of the property, which is shown on the box in red on the attached Title Deed that I have provided as an example (€60,000.00).

The annual amount of IPT payable is calculated at €4.00 for every €1,000. So in the example, the annual IPT that the developer has paid on your behalf would be €240.

I should point out that there have been cases where the Inland Revenue Department has calculated a developer’s IPT liability incorrectly and the developer has paid more tax than he should (which should be based on the 1980 value of the property as shown on its Title Deed when it is subsequently issued by the Land Registry).

Unfortunately, in these situations, the Inland Revenue Department will only reimburse buyers an amount calculated by using the 1980 value of the property as shown on its Title Deed and no more. As a consequence, these buyers are unable to claim the full amount of any overpayment; this practice by the Inland Revenue Department leaves a lot to be desired!

To calculate how much the developer should be charging you, simply multiply the annual figure by the number of years since you took delivery of the property to get the total figure.

In this example, if you took delivery of the property in 2008, the IPT charged by your developer should be no more than €720 (3 years at €240/year) – and this is the amount you could reclaim from the Inland Revenue once title to the property has been registered in your name.

You are cautioned not to pay a developer any IPT unless he:

  • Supplies you with a certificate from the Inland Revenue Department confirming how much he has actually paid.
  • Supplies you with a written invoice on the company’s letterhead for the agreed amount to be paid.
  • Provides a written company receipt for the amount paid.

Note that if you bought an apartment or a property on a larger development, the Inland Revenue Department will be unable to issue a certificate confirming the amount of IPT that the developer has paid for each individual unit comprising the development. What is more likely is that it will issue a certificate confirming how much IPT the developer has paid for each plot of land on which the development was built, which can then be used to calculate the IPT that the developer should be charging you more accurately.

Please refer to this letter from the Interior Ministry and print a copy and give it to your developer if he attempts to overcharge. If he refuses to cooperate, set your lawyer onto him.

We have published numerous articles in the past, including legal opinion on the matter obtained by the Cyprus Property Action Group.


  1. @Mike, back to the old saying the fish stinks from the head, drastic cuts and changes need to be made at the top to serve as an example, I mean the thousands of euros of tax payers money wasted for example guarding EX politicians and their families… the 12 man entourage Mr. Karoyian has to ‘protect’ him ! I pull my hair out and wonder why and how they get away with this and all the other benefits! problem is the common man on the street sees all this and says ahhh so if they big fish can get away with scams like this why not us? IF the leaders of this place can serve as leaders and do the right thing then the rest of us will follow eventually…but by god have they had it wrong for so long, a benefits system that dishes out benefits regardless of your financial standing…. a little bird told me they know a certain lady who has no income per say, but has assets that reach the millions, and no doubt incomes from this, yet she gets state child benefit for her children….nuff said

  2. @dimitri – yes, they do when they take delivery of a property – and this is to be expected as they will be using the local authority services such as street lighting & refuse collection.

    And they will also be paying for their electricity and water.

  3. Nigel I am pretty sure many buyers are paying the local authority taxes for refuse collection etc etc way before they are even legal owners of what they have paid for…

  4. dimitri
    You are absolutely correct. I too am Cypriot and agree with your analogy. The Cyprus we knew appears to be a distant dream. Whoever coined the phrase of “money/Greed is the root of all evil” was certainly correct however fortunately there are still some pockets of old genuine hospitality and friendliness but way away from any kind of tourist area or area of any wealth. So sad and what an opportunity lost for the Island as a whole. The day of judgement is drawing closer however and we may yet see ourselves exchanging our Mercedes for the donkey. Poetic justice if not for the innocent who will suffer too.

  5. @Peter – I suspect that the 9% interest is a penalty imposed by the Inland Revenue Department because the developer failed to pay his tax by the due date.

    You should not be liable for this! Would you pay a penalty imposed on me by the Inland Revenue if I was late paying my Income Tax?

    As I suggested in the article, if your developer refuses to oblige, get your lawyer onto the case. And if he is ‘pals’ with the developer, I suggest you appoint a lawyer from the list provided by the British High Commission in Nicosia to act on your behalf.

  6. @Jill Warr – virtually all the contracts I have seen contain a clause along the following lines:

    “From the day the Purchasers take possession of the property, they undertake to be responsible for and to pay all the Government, municipal and local authority taxes, levies, duties and charges raised on or in connection with the possession of the Property hereby sold”.

    And this clause makes you liable to pay IPT as soon as you take delivery of the property.

  7. It still doesn’t help if he says pay it or you don’t get your deeds. What do you do then? I know our developer charges 9% interest on money he has paid.

  8. Thank you for this article. However, my question is: If (as we are constantly told) the developer is the owner of the property until we receive our title deeds, why are we liable to pay IPT? Should we not start to pay this once the property is legally ours by our having the Title Deeds?

  9. Please don’t censor this post as being non-politically correct I am a Cypriot myself and find the practices of the banks developers the govt outright criminal…The apple never falls far from the tree,the corrupt Greeks were never going to be alone in being scam champions, Cyprus is fast following the example of Greece….

Comments are closed.



EUR - Euro Member Countries


Property sales in Cyprus improving

The number of property sales in Cyprus is improving following the government's decision to introduce an interest rate subsidy for new housing loans granted from 1st March 2020 until 31st December 2020.

Tender awarded for Larnaca port and marina

The tender to develop the Larnaca port and marina has been awarded to Eldeman Holding BV and Alexandrou Corporate Services, comprised of Israeli and Cypriot interests.

you're currently offline