IPT stays at 1980 base, payable by 30/11

Financial Mirror (Cyprus) - - FRONT PAGE -

The govern­ment has de­cided to stick to the 1980 base value for the im­mov­able prop­erty tax (IPT) af­ter it failed in early July to push through par­lia­ment a re­vised bill that would see levies im­posed on cur­rent val­ues and wants the fees to be paid by the end of Novem­ber in order to raise some 100 mln eu­ros for the pub­lic purse.

The Tax De­part­ment of the Min­istry of Fi­nance an­nounced that all com­pa­nies, or­gan­i­sa­tions and in­di­vid­u­als, res­i­dent or not, who had im­mov­able prop­erty reg­is­tered in their name in Cyprus as at Jan­uary 1, 2014, are sub­ject to IPT, if the to­tal value of their prop­erty had a 1980-base value of over EUR 12,500.

Ini­tial plans had the govern­ment seek­ing the IPT for prop­er­ties val­ued to­day at more than EUR 200,000, but at a frac­tion of the tax paid so far, in order to bal­ance the dif­fer­ence.

But dis­agree­ment arose over the method of cal­cu­la­tion, as own­ers and politi­cians said it was un­fair for those with prop­er­ties worth over EUR 200,000 to pay the tax in full and those below to pay noth­ing. The com­pro­mise pro­posal had been to ex­empt the first EUR 200,000 from the en­tire value.

Ac­cord­ing to the an­nounce­ment is­sued by the Tax De­part­ment, “in case you don’t re­ceive a tax as­sess­ment dur­ing Au­gust or if you so re­ceive, but not all of your im­mov­able prop­erty is in­cluded therein, then you are obliged to file a dec­la­ra­tion nd pay the cor­rect amount of tax.

“In case where the prop­erty of a de­ceased person has not yet been trans­ferred to the le­gal heirs, the le­gal heirs have an obli­ga­tion to pay the cor­rect amount of tax to the Tax De­part­ment; by in­cor­po­rat­ing the value of the share of the prop­erty in­her­ited to their dec­la­ra­tion”, it is added.

The an­nounce­ment notes that any ob­jec­tions can be raised by Septem­ber 30, 2014.

The dec­la­ra­tion form is avail­able on

the web page http://www.mof.gov.cy/ird . The De­part­ment added that if the IPT is paid in full by 31 Oc­to­ber, there is a 15% dis­count on the tax payable, while any IPT de­layed af­ter Novem­ber 30 will bear a 10% penalty plus in­ter­est and any other ad­min­is­tra­tive charges im­posed by the law.

On July 10, par­lia­ment voted an amend­ment to the IPT law that re­moved the tax obli­ga­tion on sold prop­er­ties from de­vel­op­ers and plac­ing it on buy­ers, with the deed of sale serv­ing as suf­fi­cient proof of own­er­ship trans­fer in the ab­sence of ti­tle deeds.

As the old law had placed the tax bur­den on prop­erty own­ers – with ti­tle deeds as the sole criterion for de­ter­min­ing own­er­ship – pro­tec­tion to de­vel­op­ers from un­due IPT payable was deemed nec­es­sary by deputies when they were told by Land Reg­istry officials that some 40,000 ti­tle deeds had been is­sued but not col­lected by buy­ers who could not af­ford the trans­fer fees.

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