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New Immovable Property Tax lies

The changes brought about by the new Immovable Property Tax shifts the burden of taxation onto the owners of medium value properties to the benefit of large owners such as property developers.

lies WHEN Interior Minister Socratis Hasikos told CyBC that “people will be asked to pay less [Immovable Property Tax] than last year and the reason is very simple, many more properties have been included”, he was being economical with the truth!

It is clear from the table below that the Cyprus government has shifted the burden of taxation onto the 22% who own properties valued between €200,000 and €400,000 and the 20% who own properties valued between €400,000 and €1.5 million who will be required to pay €79 million of the €137 million of the Immovable Property Tax the government plans to collect.

A number of people commenting on earlier articles in Cyprus Property News have already raised the point that they will be paying more Immovable Property Tax this year than last, despite the Interior Minister’s assurance that they would pay less.

Assessed Property Value
IPT Rate
Number of Owners
IPT
Total386,695 (100%)€ 137,489,891.70
Up to € 200,0000209,883 (54.3%)€ 0
€ 200,000 to € 400,0000.1%85,540 (22.1%)€ 24,407,083.10
€ 400,000 to € 1,500,0000.1%77,463 (20.0%)€ 54,299,733.80
€ 1,500,000 to € 5,000,0000.1%11,635 (3.0%)€ 28,133,688.60
€ 5,000,000 to € 10,000,0000.1%1,423 (0.4%)€ 9,683,055.50
€ 10,000,000 to € 30,000,0000.1%591 (0.2%)€ 9,267,679.70
€ 30,000,000 and above0.1%160 (0.0%)€ 11,698,651.00

And who do these changes benefit? You’ve guessed it those larger owners, including property developers, whose properties are valued in many millions of Euros.

As well as the larger owners, the owners of low value properties will also benefit from the change in taxation; those owning property up to €200,000 (54% of owners) will be exempt under the new arrangements.

Meanwhile I’ve received reports and supporting documents showing that the nefarious developers have already invoiced their deed-less customers for Immovable Property Tax for 2014 based on the 2013 rate (1.9%) rather than the 2014 rate (0.1%) – 19 times more than they should be paying.

I wonder if the government and lawmakers will ever have the will or the intestinal fortitude to stop all the lies and deceit that has given Cyprus such a bad name internationally.

Maybe they should start with the people at the top – perhaps lessons in speaking the truth would help.

Readers' comments

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  • Richard Knowles says:

    As Ghandi stated well passive resistance (en masse) achieves more than force. If all individuals that are owed title deeds but have not received them are asked to pay a land tax, then simply state you will not do so until the deeds are given. Write back to the developers charging this tax that you are not required to pay it unless your deeds are issued forthwith as you are not on title. Soigné them a choice (never back someone into a corner). Let them either pay you back the purchase money you gave them or tell them to pay the land tax themselves as the title owners. Tell the developer he cannot have both. Unless the whole legal and political system is crooked and completely “in on it”, something I feel sure of incidentally, then this will be settled in court. This will prove complicity either way.

  • @dimitri on 2014/07/09 at 8:37 pm – I’ve just published an article Immovable Property Tax up in the air.

    The only good thing I can say about taxing those without deeds is that it will stop the crooked property developers from robbing their customers.

  • dimitri says:

    hello all, well just heard on the RIK news that cypriot politicians will be looking at amending the tax again and this time pushing for a change that will lumber purchasers who have a sales agreement lodged at the land registry with the tax…..my question is why pay the tax on something is not legally your own?…and if there is no reference in the sales contract on who pays ANY of the taxes(e,g ipt communal charges etc) of the property purchased what would hold in a court of law if gov were to press for taxes to be paid….

  • @Peter Davis on 2014/07/09 at 7:47 pm – You could tyry asking the Land Registry, but I doubt you’ll get anywhere as the information is confidential.

  • @Andrew on 2014/07/09 at 12:16 pm – It is imperative that those without the deeds to their property check their sale agreement before refusing to refund the IPT that the developer has paid on their behalf. They may be obliged to pay and if they refuse, they could be in breach of contract and would have to face the consequence of their actions.

    For more information see – Refunding developers’ Immovable Property Tax.

  • Peter Davis says:

    I own a 3 bed villa.

    Across the road from me are two similar villas owned and built on Greek Cypriot family land.

    I will wait to see if all three of us have the same value.

    So how do I find out? Anyone any idea?

  • Andrew says:

    All buyers who are not in possession of their title deeds, should steadfastly ignore any demands for payment. Why pay IPT on something you may never own?

  • @MartynG on 2014/07/08 at 8:13 am – According to ‘Mr Pinnochio’ you may appeal the 2013 valuation by obtaining “a single document from a property valuer indicating the true value of their property”.

  • @Tony Loach on 2014/07/08 at 10:28 am – I’m sure that most ‘holiday apartments’ (a.k.a rabbit hutches) will be exempt from IPT. But as well as these rabbit hutches there are residential apartments whose owners will be subject to tax. There are many family-sized apartments in Limassol in excess of 200 sqm. but I’m not sure of what the other towns and Nicosia have.

    As for only Brits and other Europeans paying the tax (I assume you include Cypriots) that is true – and there also quite a few Russians with decent sized properties that will also be paying IPT. You also need to bear in mind that many Cypriots own or have shares in a number of properties that they have inherited – Cypriot friends of mine own 17 residential houses and apartments (not rabbit hutches) in and around Limassol, many of which they’ve inherited.

    I live in a village – my neighbour has a family house – it’s 450 sqm. and there’s a similar sized property next to him. At the end of our road there’s a big house, I guess it’s at least 600 square metres. Most of the properties where I live are family sized. Old houses in the village centre tend to be quite small – but some have been knocked together to form single large houses – these will also be taxed.

  • @Martin B on 2014/07/08 at 11:46 am – There are a couple of possibilities as to why these 299,000 properties lay ‘undiscovered’ by the Land Registry:

    1. They were built illegally – i.e. without having been issued with required planning and building permits.

    2. They were built legally but no-one asked the Land Registry to include them on the deed.

    It’s the way the crazy system here operates – every stage in the process of issuing Title Deeds has to be initiated by the owner. So you can get all the permits and build perfectly legally, but unless you request the Land Registry to add the property(ies) to the deed, they will not even know that you have built – ignorance is bliss.

  • Martin B says:

    I see from the latest stories published about IPT that during the revaluation exercise 299,000 previously unregistered properties were “discovered” ! Can anyone explain (Nigel ?) how on earth that can be, perhaps an extra 0 or two has crept into that figure, and how exactly were any of them “discovered” anyway?

    299,000 must be something like half of the housing stock in the Republic, and if unregistered until now, they have not got (and obviously don’t want) their Title Deeds.

    As I understand it, owners without Title Deeds are not liable for IPT, it falls on developers etc, so who will pay for all these newly discovered properties?

    Not a day passes without something completely implausible making the news here!

  • Tony Loach says:

    This means that almost every apartment will be exempt from IPT, also all Cypriot homes in villages will also be exempt, and hence the good old British, other Europeans who bought small 2/3 bed villas and who live of pensions coming from other countries have been shafted again, to bring in outside money, not wooden dollars from the Cypriot economy.

    Disgusting, just like the 12000 Euro stitch up on title deeds where multi deed properties can become exempt.

  • Mike says:

    Protecting the developers, hurrying to charge people at the old higher rate, passing the tax burden onto the lower paid and generally honest hard working taxpayer – surely not here in Cyprus!

    As for the Interior Ministers rhetoric claiming the majority will be paying less; well if anyone believes what a politician – especially what a politician in Cyprus says – then there really is no hope is there. How many more daily examples of half truths, lies, statements designed to deceive are needed to convince people.

    I’m not convinced it is the individual politicians fault it may be that the advice and briefing he is given is so poor as to border on the criminally insane. Worrying however if he cannot think for himself.

  • Stuart says:

    “False words are not only evil in themselves, but they infect the soul with evil”. Socratis should take this lesson from Socrates.

  • @kufrahdog on 2014/07/08 at 8:28 am – Until the Title Deed for the property you purchased is issued, it doesn’t exist and you will be unable to appeal the valuation. However, your developer could appeal the valuation of the development – and it would be in his interest to do so.

  • kufrahdog says:

    … and, of course, if you are not the registered owner of the property you have purchased, you will not be able to appeal the valuation of your property as determined recently by the Land Registry … is this correct, Nigel? KD.

  • MartynG says:

    Touch of the Pinnochios there then, but how many of us are surprised?

    And we haven’t yet heard about the second key part of this exercise – the new ‘2013’ values…

    ….and also, importantly, how these new values have been determined!

    Have they organised ‘fly-pasts’, used the nouveau method (a la Google), or simply guesstimated them?

    And what method(s) of appeal and re-assessment will be applied where owners contest the values ascribed?

  • Costas Apacket says:

    Unfortunately, the truth is often a stranger here.

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