On Wednesday 1st of June 2016, the Council of Ministers of the Republic of Cyprus approved the following:
- the reduction of the immovable property tax rate by 50%;
- the abolishment of the immovable property tax collected by municipalities and communities;
According to the statement of the Minister of Finance, Harris Georgiades, this is another significant step towards tax reform and reduction of the tax burden for households and companies. Specifically, the government approved the reduction of the immovable property tax by 50% to 0.5 per mille in order to counterbalance the obligation imposed by the EU to charge a VAT rate of 19% on transactions in the context of commercial transactions of buildable land.
Moreover, Harris Georgiades mentioned that the Council of Ministers decided:
- to keep the 20% discount for those who pay their immovable property tax online or through credit institutions within the time limit;
- to keep the 17.5% discount for citizens who pay their immovable tax on time at the Tax Department counters;
- the tax up to €25 will not be collected;
Mr.Georgiades claimed that the expected revenue from the VAT rate of 19% is €24 million while the loss from the reduction of the immovable property tax is expected to be €45 million. Mr.Georgiades also added that the government has reduced the transfer fees by 50% for all immovable property sales. It should be pointed out that this proposal will be submitted to the Cyprus Parliament soon.
In case you have questions related to immovable property regulations in Cyprus, then contact one of our lawyers. The legal team of Michael Chambers & Co. LLC is committed to providing you customised solutions that will fit your needs. If you wish to speak to one of our lawyers, then please contact us: [email protected]