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Taxand Cyprus explains the recent legislasive changes in the real estate market.
Every owner is liable for the payment of immovable property tax for all immovable properties situated in Cyprus and registered in the owner’s name on 1 January of each year. The value of the immovable property is deemed to be the price based on the valuation on 1 January 1980.
On 14 July 2016, the Cyprus Parliament agreed that immovable property tax for 2016 will be based on 1980 values but reduced by 75% of the amount paid last year (2015). Further, it was decided that the immovable property tax will be abolished in 2017.
The immovable property tax for 2016 will be calculated at 25% of the price of the property based on the valuations of 1980. The deadline for payment of the 2016 tax has been set at 31 October 2016. Late payments made between 1 November and 31 December 2016 will be calculated using an increased value of 27.5% of the 1980 valuations.
Taxpayers who fail to pay before 31 December 2016 will be subject to an additional 10% monetary penalty on the unpaid tax calculated on 31 December 2016.
Discover more: Cyprus amends property taxes and fees
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Despite global market challenges, the Cyprus real estate market has remained attractive to foreign investors. A number of legislative changes were introduced during 2015 and 2016, further adding to this attraction, including the reduction -and in some cases the abolition- of transfer fees as well as reduction of immovable property taxes which are described below.