IN A LETTER to the House Finance Committee and political parties, Aristodemou claimed that the way the legislation was implemented “created serious distortions among taxpayers”.
He also said that the government agreed with the Troika to collect €130 million from property tax and noted that the fact that €2.7 million or 2% of that amount was retrieved from Aristo Developers shows the injustice of the legislation.
“I wish our company owned 2% of property in Cyprus and we would have paid double taxes, but in reality 2,263 properties worth a total of €720 million for which we are charged property tax do not belong to us and this also proves the enormous damages from collecting transfer fees by the state due to the intentional delay of property transfers,” Aristodemou said.
He suggests that in order for the taxation to become fair, all the properties with the same parameters and characteristics should be registered and the buyer/user should be taxed, provided that the transaction documents have been submitted to the Land Registry.
There is also a suggestion to obligate the buyer to complete the transfer within a reasonable time period, provided that there are separate deeds, otherwise fines will be enforced. And that unsold housing stock should be exempt from taxation.
The Inland Revenue Department has proposed that property tax is calculated based on estimated prices in 1980, expressing serious doubts whether the state will be able to collect the amount of €130m if the tax is based on 2013 prices.
During a meeting between Inland Revenue and the Land Registry last week, officials said that it is unlikely that the estimations of property tax based on current prices can be completed in time and doubt that Cypriots will accept the new amount or be able to pay it. A Plan B has been proposed, whereby the same values as last year are implemented in order to reach €130m in accordance with the bailout terms. The proposal was presented to the international lenders during their last visit and officials report that there were no objections. Officials from the Land Registry are expecting the revised values to be available by the end of June as per the memorandum and point out that there will be no delays.
Inland Revenue also proposed that the Land Registry should include buildings that were developed in areas which were registered as fields or plots in 1980 when the prices were estimated, in order to make taxation fairer.
However, the Land Registry is said to have rejected the proposal claiming that it is not feasible.