Great news for property owners as on the 1st of June Cyprus Council of Ministers approved reduction of the immovable property tax rate by 50% and abolished the immovable property tax collected by municipalities.
Following a Council of Ministers meeting, the Minister of Finance, Mr. Harris Georgiades said that another significant step towards tax reform and reduction of the tax burden for households and corporations has been made. He also mentioned that the government approved a reduction of the immovable property tax by 50% offsetting the obligation by the EU to charge VAT rate of 19% on transactions of property in the context of commercial transactions of buildable land, the Cyprus News Agency reports.
According to the data, the estimated revenue from the 19% VAT is €24 million whereas the revenue loss from the reduction of the immovable property tax is estimated to €45 million. This reduces tax revenue from immovable tax from 103 million to 45 million.
Furthermore, Mr. Georgiades said that the Council of Ministers decided to maintain the 20% discount on citizens who timely repay their immovable tax via the internet or through credit institutions and the 17.5% discount for citizens who pay their immovable property tax on time at the Tax Department counters.
The government also reduced the transfer fees by 50% for all immovable property sales. Mr. Georgiades added that this proposal will be submitted to the parliament the soonest possible.
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