Immovable Property Tax in Cyprus Slashed by 75 Percent in 2016

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Immovable Property Tax in Cyprus Slashed by 75 Percent in 2016

July 26, 2016

 Are you planning to sell your property in Cyprus quickly? The news from Cyprus is very good! The Cyprus parliament has decided to reduce the Immovable Property Tax for 2016 by 75%. What’s more, the Immovable Property Tax in Cyprus will be completely abolished in 2017.

Averof Neophytou, the leader of the ruling DISY is the person behind this radical proposal. Mr. Neophytou had the decision passed by the parliament in Cyprus by a comfortable majority vote.

 Indeed, before the vote there was a lot of debate between the government and the opposition parties, all of whom wanted their own proposal to be passed. But eventually it was the ruling DISY that had the last say on the matter, getting a 75 percent discount on the Immovable Property Tax this year and planning to do away with it entirely in 2017.

The 2016 tax will be based on 1980s prices. The government’s proposal was supported by the Solidarity movement as well as by EDEK and DIKO. .  The new proposal was only opposed by 18 members of AKEL and 2 members of ELAM.  The Citizen’s Alliance and the Greens decided to abstain from the vote.

What it means is that if you are an owner of a property in Cyprus, you will be expected to pay 25 percent of the property tax that you paid in 2015.  However, if you delay paying the property tax, a penalty of 2.5 percent will be imposed, which means, you will end up paying 27.5 percent of last year’s amount.

An earlier bill by the government wanted a flat rate on property tax based on 2013 property values. This was rejected by the parliament. This proposal would have raised €45 million, of which €15 million would be given to the local authorities.

There was a counterproposal from AKEL and DIKO who wanted a progressive taxation instead and wanted a higher rate of tax imposed on high value properties. This proposal was also rejected by the parliament.

 Mr. Neophytou fought accusations that his government had introduced the new proposal to protect the interests of rich investors in Cyprus properties. He said, “The wealthy may have more debt than the value of their assets, whereas those who have never paid tax may, in fact, be the truly rich.”  

 Giorgos Loucaides of the AKEL said in response, “The government has left the less-privileged to pick up the tab in a bid to serve big private interests. We are in favour of scrapping this tax, but by turning it into a tax on the wealthy, not in favour of the very few privileged.”

Christiana Erotocritou of DIKO supported the government. She said, “The 2013 valuations create many distortions, and those from 1980 are unfair, but the choice was between the devil we know, meaning the 1980 distortions, and the one we don’t, meaning the unknowns that will emerge if we employ the 2013 pricings.”  

Giorgos Lillikas of the Citizens’ Alliance insisted that all the proposals tabled were wrong and unfair. “We need to move toward fairness,” he concluded.

Regardless, if you’re looking to sell your villa in Cyprus online, you should be happy about the positive steps taken by the government to protect the interests of property investors and home owners in the country.