Years of omissions and delays have forced the government to submit provisional Immovable Property Tax legislation (IPT) in a bid to meet immediate bailout conditions, but which will have to be amended by the end of June to make it fairer, says spokesman Christos Stylianides.

The spokesman said authorities lacked sufficient data to prepare a comprehensive proposal but at the same time the bill had to be approved in the next few days for Cyprus to be eligible for the much-needed first tranche of a €10 billion bailout at the beginning of May. “Unfortunately, past omissions and shortcomings have resulted in insufficient data,” Stylianides said, adding that the government could not accept the current distortions in the system.

Cyprus has until now taxed properties according to their 1980s values while many properties have not even been registered. “There are whole areas in Limassol, Nicosia, and Larnaca, where houses worth millions of euros are built, which do not have a building permit at the moment and are considered plots and fields,” Stylianides said. 

This means any law passed under current circumstance would be unfairly distributed among registered home owners. The administration was asking for more time, pledging to have a fairer final proposal before parliament by the end of June. “We must send a bill to parliament … because we all know that we need the disbursement ofthe first tranche. We expect the approval of this proposal being fully aware there will be a much better and much fairer IPT by June,” Stylianides said.

The finalised IPT was expected to be paid by property owners towards the end of September. Stylianides said the state would use information and data held by local authorities, the land registry and even the VAT service. The finance and interior ministries judged that they could not collect all the data in such a short time, he said. “We are asking for this small extension because we saw that the data is distorted and insufficient,” Stylianides said.

The bill aims to raise €75 million on top of the €30 million collected from the IPT in 2012. Stylianides said the final bill provided for €125 million in revenues from IPT – €75 million plus €30 million plus a ‘cushion’ included because “not everyone will be able to respond during the specific timeframe. " 'Cushions’ are included in all memoranda in all countries,” the spokesman said.

According to the bill, reports said, individuals will pay between €50 for a property valued at €12,500 in 1980 to €51,419 for those over €3.0 million. Owners whose properties were worth between €40,001 to €120,000 would pay an average €305 and a maximum of €640. Properties worth between €170,001 and €300,00 will be taxed an average €1,500. The maximum amount for this bracket will reach €2,340, reports said.

Source: Cyprus Mail