Govern­ment slashes prop­erty tax by 50%

Financial Mirror (Cyprus) - - FRONT PAGE -

The Coun­cil of Min­is­ters has ap­proved the re­duc­tion of the im­mov­able prop­erty tax rate by 50% and abol­ished the im­mov­able prop­erty tax col­lected by mu­nic­i­pal­i­ties and com­mu­ni­ties.

“To­day we made an­other im­por­tant step to­wards tax re­form and re­duc­ing the tax bur­den for house­holds and cor­po­ra­tions,” Fi­nance Min­is­ter Har­ris Ge­or­giades said fol­low­ing after the cabi­net meet­ing meet­ing.

He said the govern­ment ap­proved a re­duc­tion of the im­mov­able prop­erty tax by 50% to 0.5 per mille off­set­ting the obli­ga­tion by the EU to charge VAT rate of 19% on trans­ac­tions of prop­erty in the con­text of com­mer­cial trans­ac­tions of build­able land.

Ge­or­giades said the es­ti­mated rev­enue from the 19 VAT is EUR 24 mil­lion whereas the rev­enue loss from the re­duc­tion of the im­mov­able prop­erty tax is es­ti­mated to EUR 45 mil­lion. This re­duces tax rev­enue from im­mov­able tax from 103 mil­lion to 45 mil­lion, he said adding the tax break amounts to at least EUR 58 mil­lion.

Fur­ther­more, Ge­or­giades said the Coun­cil of Min­is­ters de­cided to main­tain the 20% dis­count on cit­i­zens who timely re­pay their im­mov­able tax via the in­ter­net or through credit in­sti­tu­tions and the 17.5% dis­count for cit­i­zens pay their im­mov­able prop­erty tax on time at the Tax De­part­ment coun­ters.

Im­mov­able tax up to EUR 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 i mpact es­ti­mated at 0.2% GDP, he added.

Ge­or­giades ex­plained the 19% VAT is im­posed on plot sales by a land de­vel­op­ing com­pa­nies and not on trans­ac­tions by nat­u­ral per­sons.


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