Im­mov­able prop­erty tax ab­sur­di­ties As­so­ci­a­tion of Prop­erty Own­ers’ pro­pos­als ac­cepted

Financial Mirror (Cyprus) - - FRONT PAGE -

The Cyprus As­so­ci­a­tion of Prop­erty Own­ers (KSIA) has re­ceived com­plaints from its mem­bers and oth­ers that the val­ues placed on prop­er­ties for the bench­mark 1/1/2013 val­u­a­tion were un­ac­cept­ably high.

A lot of peo­ple waited to see the new level of the 2015 tax be­fore fil­ing a com­plaint.

April 25 was the last date for fil­ing an ob­jec­tion and many rushed to do so at the last minute. Bet­ter late than never, our sug­ges­tions to ex­tend this pe­riod un­til 31/12/2015 were fi­nally ac­cepted.

De­spite this, there are still a few is­sues re­gard­ing the Im­mov­able Prop­erty Tax (IPT) that need to be re­solved:

1. It is al­ready May 2015 and we still do not know if we’ll be pay­ing IPT based on 1/1/1980 val­ues or those of 1/1/2013.

2. The gov­ern­ment has ac­cepted that the 1/1/2013 val­u­a­tions were rushed due to the mem­o­ran­dum dead­lines, some­thing which trans­lates to in­ac­cu­rate val­u­a­tions. Based on this, why are own­ers asked to pay high fees to the gov­ern­ment just to be able to file an ob­jec­tion? Is this a way to de­ter ob­jec­tions and take some work­load off the shoul­ders of the gov­ern­ment?

3. Why must the IPT be cal­cu­lated and set around June to July each year and be payable in Oc­to­ber? The li­a­bil­ity to pay tax lies with who­ever was the owner on the first day of Jan­uary of the same year. Isn’t this strange, es­pe­cially if some­one sells a prop­erty dur­ing the first months of the year? It would make more sense to set the IPT from the pre­vi­ous year.

4. Why does the level of IPT de­pend on who is the owner of a spe­cific prop­erty? This method of tax­a­tion only com­pli­cates mat­ters, es­pe­cially if it is based on ob­jec­tions filed and the value of prop­er­ties changes. It would be much bet­ter if the IPT was set at a fixed per­cent­age for all prop­er­ties so that own­ers would eas­ily cal­cu­late what is due. The present tax­a­tion leads to strange phe­nom­ena. If, for ex­am­ple, a 4-mem­ber fam­ily has four prop­er­ties, owned by the mother, a higher IPT would have to be paid than if each prop­erty was owned by each fam­ily mem­ber separately. This leads to mem­bers of the same fam­ily trans­fer­ring own­er­ship to an­other fam­ily mem­ber.

5. The IPT is one of three taxes paid by own­ers based on ei­ther the 1/1/1980 or 1/1/2013 val­u­a­tions. The oth­ers are the sew­er­age fees and the prop­erty tax paid to mu­nic­i­pal­i­ties.

Since we are talk­ing about one and the same prop­erty shouldn’t all three be in­cor­po­rated into one to make life eas­ier both for the state and its cit­i­zens?

Also, the level of tax­a­tion should be di­rectly con­nected to the ser­vices of­fered to the prop­erty, like the devel­op­ment of green ar­eas, rather than the fi­nan­cial needs of the state, the mu­nic­i­pal­i­ties and the sew­er­age boards.

Tak­ing the op­por­tu­nity of the ob­jec­tions for the 1/1/2013 val­u­a­tions, there ap­pear to be sev­eral ab­sur­di­ties in the tax­a­tion of prop­er­ties.

KSIA has iden­ti­fied sev­eral changed in the real es­tate sec­tor.

The state lacks a tax­a­tion strat­egy and seems to show no re­spect to its cit­i­zens. The strat­egy should re­volve around sen­si­ble prop­erty tax­a­tion lev­els to make sense for some­one fi­nan­cially to buy and own prop­erty.

Among other things, tax­a­tion should be sim­ple and easy to cal­cu­late. It is un­ac­cept­able to be li­able for 11 dif­fer­ent





be tax­a­tions and fees, payable to six dif­fer­ent de­part­ments/au­thor­i­ties. It is also un­for­tu­nate for any­one not to know the level of tax payable for the run­ning year.

Do the of­fi­cials be­lieve we are all masochists and wish to pun­ish our­selves?

When politi­cians de­cide on some­thing, should they not have the in­ter­est of the peo­ple and the coun­try as their main cri­te­rion?

We ap­peal to of­fi­cials to re­duce and sim­plify tax­a­tion so that cit­i­zens are in a po­si­tion to eas­ily fore­cast what they will be pay­ing over the next few years.

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