Cyprus Government announces cuts in property tax

02/06/2016
The Minister of Finance, Harris Georgiades, said that another important step towards tax reform was made, in announcing what is essentially a tax cut in property taxes for households and businesses.

Speaking after the Minister’s Council on Wednesday, Georgiades said that EU regulations stipulate that a 19% VAT for sales and purchases of land plots for development will be put in place, something which will generate revenue of €24 million for the government.
The Minister’s Council decided to offset this tax increase by reducing the Property Tax to half per mille from 1 per mille as was originally suggested, and the cancellation of double-paying for municipal and community duties on real estate.
This, said Georgiades, cuts tax revenue from property taxes down from €103 million to €45 million.

The generous discount of 20% for those who pay their property taxes in time will stay in place. In addition, those who owe taxes up to €25 will be exempt from paying their taxes, which means 19% of property owners will pay no taxes.
As an additional tax cut measure, transfer dues will be cut to 50% for all sales of property.

Georgiades specified that the VAT tax in sales of land plots is not in place is sales conducted by physical persons, except in cases of a purely commercial activity.

“If a citizen sells a plot, there is no obligation for VAT, however there is an obligation for VAT if e.g. a land development company conducts such a sale. In any case, the tax cut that we propose, which we refund to the citizens, is double the cost of complying with European regulations”, said Georgiades.