THE debate on the Cyprus property tax reform and the ‘hidden mortgages’ bills agreed by the Government has been delayed, according to media reports.
The bill to reform property tax will be referred to the House in September, after the summer recess, due to a delay in its submission by the government.
The Tax Department disagrees with the delay as it needs four months to collect the tax, according to the Taxation Superintendent Yiannakis Lazarou.
The Union of Municipalities and Communities asked for bill to be submitted to the coming House plenary otherwise it will be forced to issue taxes demands based on 1980 prices. The Union also asked to collect the taxes themselves.
The General Manager of the Interior Ministry Costas Nicolaides said that if the Municipalities sent out tax demands based on 1980 values, 30% of immovable property would not be taxed.
We understand that submission of the ‘hidden mortgages’ bill to the House plenary has also been delayed by the House Finance Committee.
However, the bill on reducing Property Transfer Fees 50% by the end of 2016 will be placed before the plenary on Thursday. The bill proposes an extension to the reduction in transfer fees that was introduced in December 2011 until the end of 2016 – and extending the scope of the reductions to transactions agreed before December 2011 and resale property transactions.
The bills are aimed at modernising and reforming Cyprus’ tax framework and provide for the imposition of a single tax rate, the abolition of municipal and community fees, a reduction in Property Transfer Fees by 50% by the end of 2016, the setting of property tax 0.1% and the transfer of responsibility for their setting and collection from the tax department.