By a decision of the House of Representatives in July 2016, amendments have been made to the Immovable Property Tax Law (the “Property Tax”). The amendments have been published in the Official Government Gazette as of the 25 July 2016 and have taken effect as of that date, and have the effect of reducing the immovable property tax burden for tax year 2016 by up to 75% and abolish the immovable property tax completely as from the year 2017.
Summary of Immovable Property Tax Law
Property Tax is imposed on an annual basis, on the basis of the market value (as at 1 January 1980) of the immovable property situated in Cyprus as at 1 January of each relevant year.
The Property Tax is calculated by applying the following rates on the total market value of the immovable property owned by each person (either individual or company irrespective of its tax residency status):
|Total Immovable Property Value–as at 1 January 1980||Tax Rate|
|Up to 40.000*||0.6|
|40.001 – 120.000||0.8|
|120.001 – 170.000||0.9|
|170.001 – 300.000||1.1|
|300.001 – 500.000||1.3|
|500.001 – 800.000||1.5|
|800.001 – 3.000.000||1.7|
*NOTE: Owners whose total immovable property is valued at less than €12.500 are exempt from the Property Tax.
Amendments to the Immovable Property Tax Law
The amended IMP Tax Law provides as follows:
- Taxpayers that settle their 2016 Property Tax liability by 31 October 2016, are only required to pay 25% of the ta due as this is calculated according to the above rates (75% discount).
- Taxpayers that settle their 2016 Property Tax liability during the period 1 November 2016 – 31 December 2016, are only required to pay 27.5% of the tax due as this is calculated according to the above rates (72.5% discount).
- Taxpayers that do not settle their 2016 Property Tax liability by 31 December 2016, will be subject to an additional 10% charge, imposed on the 27.5% tax due.
- If the taxpayer’s 2016 Property Tax liability is less than €10, thetax is not collectable.
- Lastly, the Property Tax is abolished as from 1 January 2017.