Cyprus slashes immovable property tax

Paphos, Cyprus Photo: Sergey Yeliseev

Cyprus has slashed Immovable Property Tax for some homeowners in a new bill approved this week. The bill, approved by the Council of Ministers, will exempt all property worth up to €200,000 from the levy. For those above the threshold, the tax will be reduced to just 0.1 per cent.

The move is a big step compared to the previous legislation, which based its tax upon 1980 valuations of property and levying an amount between 6 and 19 per cent. The island has been rushing reevaluate its real estate, though, as part of its bailout conditions. Now 2013 values have been established, the government is adjusting its tax brackets accordingly, making the cost of owning property more favourable for buyers.

"Previous legislation exempted 40 per cent of property owners, whereas this year 54 per cent will be exempted," Deputy Government Spokesman Viktoras Papadopoulos said, reports Cyprus Property News.

The island is also reported to be considering reducing Property Transfer fees too, by 50 per cent. The move, which would be temporary, would help to clear up the backlog of Title Deed applications that has plagued Cyprus for some time.

The Cypriot property market is still seeing prices fall, but recent figures revealed positive signs of recovery in the market, with sales climbing in May 2014 for the first month in a row.

Figures from the Department of Lands and Surveys show that overseas property sales more than doubled year-on-year in May 2014, led by a rise of 800 per cent in Nicosia.