A while back the Government promised to consolidate several Cypriot taxes and is now keeping that promise. At the beginning of May, the Government announced it is preparing a bill that will integrate the Cypriot immovable property tax and other municipal taxes and send it for debate to the Parliament before the summer vacation.
The Minister of Internal Affairs, Socratis Hasikos, declared the Cypriot property values will be updated based on the new legislation and that a new draft bill to consolidate several taxes will be created. Tax consolidation would unify the immovable property tax applied by the state and the local and municipal property taxes, thus reducing the tax burden on Cypriot citizens. The only exception would be the sewerage tax, which would continue to be paid separately. The tax consolidation bill is expected to bring 100 million euros from the state property tax and 13 million euros from the municipal tax.
The minister also declared the property values have been reassessed. The new Cypriot property valuation base will be completed by the end of the month and in the first week of June will be sent to the Finance Ministry. However, no new rates have been discussed yet. The real estate property values reexamination was started in 2010 in collaboration with the Cypriot Land Register and was meant to update property values last established in 1980
The minister also declared there will be no property tax increases in Cyprus this year. The tax rates will probably remain the same as last year but, solutions for lower tax rates are still under discussions. The question that remains is what categories of taxes would allow lower rates.
The Minister of Internal Affairs also stressed the importance of protecting Cypriot citizens who have purchased houses from real estate developers and have paid their loans diligently despite not receiving any contract. Hasikos reiterated that responsible home owners must be protected against the newly-passed Foreclosure Law and must be given their property titles.
For information about current property taxes and real estate due diligence procedures you may refer to our law firm in Cyprus.
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