Cyprus Slashes Property Tax

June 2, 2016 Taxation in Cyprus

Bell TowerNICOSIA – Owning and purchasing property is about to become cheaper in Cyprus, but not for businesses.

On May 1st the government of Cyprus announced that it is slashing the taxes on property held or bought in country.

The rate of the Immovable Property Tax (IPT) will be slashed to 0.05 percent of the value of the property, from the current rate of 0.1 percent.

The IPT levied by local governments will be abolished, though the loss in revenues to be seen by the local authorities will be compensated by the central government.

The basis for calculating the IPT to be paid will also change, with the tax to be calculated from the value of properties compiled in 2013, as previously the tax was based on properties as valued in the 1980s.

The government will also maintain the 20 percent discount currently available to individuals who pay their IPT obligations on time.

Individuals with small properties with an IPT obligation of less than EUR 25 will also be exempt from payment.

The decreases in tax obligations will be offset by the inclusion of commercial property transactions to the scope of VAT at a rate of 19 percent.

Photo by Jesper Hauge