The Reduction & Eventual Abolition of Immovable Property Tax in Cyprus
DISY Leader, Mr Averof Neophitou’s drastic proposal for abolishing Immovable Property Tax (IPT) in Cyprus by 75% last year in 2016, abolishing it altogether from the start of 2017, was passed by a majority vote during a parliamentary meeting held back in 2015.
The vote followed days of negotiation talks, with finally DISY ruling proposed a bill stipulating that IPT for 2016 would be based on 1980s property value. The proposal was eventually backed by other majority seated parties EDEK and DIKO however was opposed by AKEL and ELAM by 18 and 2 votes respectively.
EDEK leader Mr Marinos Sizopolos said the 1980 prices are unfair, whereas the 2013 valuations were based on the distorted prices created by the property bubble (A property bubble is an economic bubble that occurs periodically, typically following the rapid increase in the market price of land such as housing until they reach un-maintainable levels and then decline in a bubble).
The Citizens’ Alliance Party in Cyprus stated that all the proposals bills contained an amount of inequalities. “We need to move toward fairness, and as a compromise we will vote for the most just and fair proposal” they assured.
Property Tax payable to Communities & Municipalities in Cyprus
This is local property tax which has not been abolished by the courts and residents with property on the island will continue to pay this, which is calculated on the Land Registry’s assessment of the 1980 value of the property.
Property Transfer Fees in Cyprus
The temporary reductions in Property Transfer Fees that that came into force in 2015 and applied to transfers that took place by the end of 2016 was made permanent in July 2016.
(a) If VAT was paid when purchasing the property, no Property Transfer Fees are applicable.
(b) If VAT was not paid when purchasing the property, the Property Transfer Fees will be reduced by 50%.
NB: for more accurate figures the Cyprus Department of Lands & Surveys has an online transfer fee calculator.