IPT stays at 1980 base, payable by 30/11
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.