Cyprus Eases Up Property Taxes
August 23, 2013 Taxation in Cyprus
NICOSIA – The government of Cyprus is adjusting the tax treatment of property in order to ease obligations for some taxpayers, while reducing administrative costs for the government, and raising the amount of tax revenues collected.
At a meeting held in Troodos on August 20th the Cabinet of Ministers of Cyprus agreed to amend the country’s Immovable Property Tax (IPT) by excluding low-value properties from the system, and updating the property values at which the tax is levied.
Currently all immovable property in Cyprus is taxed under the IPT system, with the rate starting from 0.006% on properties valued at less than EUR 40 000, and rising to 0.019 percent on property valued at more than EUR 3 million.
Under the system, all land owners are required to make a minimum payment of EUR 75, even if their effective tax obligation is calculated to be less.
However, under the amended rules, the tax will not be applied to property valued at less than EUR 5 000, and the EUR 75 minimum payment will be scrapped entirely.
The tax is currently based on recorded values as at 1980, but from 2014 onward the valuations will be updated to be based on calculations in 2013.
The government estimates that the revision of the property values will bring in an extra EUR 10 million in taxes each year, raising the total collections to approximately EUR 110 million per annum.
Explaining to decision to stop taxing the lowest valued properties, the Government Spokesman Christos Stylianides said that currently the tax is applied even to insubstantially valued lands, such as “…a field with three olive trees,” and the government now believes “…the administrative cost to be too large for such properties of insubstantial value.”
Photo by Jesper Hauge