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28th November 2022
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HomeLegal MattersProperty tax law to help refugees corrected

Property tax law to help refugees corrected

In February 2021 the House of Representatives passed an unenforceable law levying a 0.4 per cent tax on all sales of immovable property, the proceeds of which were to go towards supporting Greek Cypriot refugees.

The legislative proposal, which was passed by a unanimous vote in the plenum, aimed to compensate refugees for their inability to possess, have access to, or otherwise gainfully use their land in the occupied north of the Republic.

It provided for a tax on any sale/transfer of real estate, as well as on the transfer of shares in a company where that company owns immovable property or where the transfer of the shares results in the buyer taking control of the corporation or exploiting the immovable property in question.

The funds raised were to go into a fund managed by the Central Agency for the Equal Distribution of Burdens, the state agency tasked with assisting refugees of the 1974 war.

However, there was an inexcusable flaw in the law as it failed to specify how the tax would be levied and which government department would be responsible for its collection.

As a consequence, the law was unenforceable!

Last week, more than 18 months after the unenforceable law was passed, a revised law was passed designating the Tax Department responsible for levying and collecting the 0.4 per cent tax.

Although the law was passed by a unanimous vote in the plenum, a clause stipulating that the tax would apply from February 2021 when the original, unenforceable law was passed resulted in some friction. An amendment to cancel this clause, which was submitted by DISY, was rejected.

The 0.4 per cent tax is payable by the seller of the property.

Who are Greek Cypriot refugees?

Cypriot refugees are the Cypriot nationals or Cyprus residents who had their main residence in an area in the north of the Republic that was forcibly evacuated during the 1974 Turkish invasion. The government of Cyprus also recognizes as refugees the descendants of the original refugees in the male line.

Since 1974, the number of Greek Cypriot refugees has ballooned.

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