Cyprus Property Tax Reduced By 50%
It has been approved that the immovable property tax rate to be reduced by 50% and to abolish immovable property tax collected either by municipalities and communities.
The Minister of Finance Mr. Harris Georgiades stated “Today we made another important step towards tax reform and reducing the tax burden for households and corporations.”
He continued to say that the government approved a reduction of the immovable property tax by 50% to 0.5 mille off setting the obligation by the EU to charge VAT rate of 19% on transactions of property in the context of commercial transactions of buildable land.
He also estimated revenue from the 19% VAT is €24 million whereas the revenue less from the reduction of the immovable property tax is estimated to €45 million.
The immovable tax collected from previous years was €103 million and will go down to €45 million, which means a tax break amounts to at least €58 million.
Mr. Georgiades also said the Council of Ministers decided to continue the 20% discount given to citizens who pay their immovable tax via the internet or through credit institutions and the 17.5% discount for those who pay on time at the Tax Department counters.
Immovable tax up to €25 will not be collected, the Finance Minister said.
Georgiades also said the government reduced the transfer fees by 50% for all immovable property sales.
“With this proposal, that will be submitted to the parliament the soonest possible, I believe we are taking another step towards reducing those burdens that have been rendered necessary in the previous years,” Georgiades said.
The proposal’s total fiscal impact is estimated at 0.2% GDP, he added.
It was emphasized that the 19% VAT charged on plots sold will be only on land developing companies and not on transactions by natural persons.