Immovable Property Tax (IPT)
The way IPT works is that the owner, in the case that the title deeds have yet to be registered in your name, the developer, is liable for IPT on all the property he owns. So if he owns (say) 20 properties each of which has an assessed 1980 value of (say) CYP 10,000, then the amount on which his IPT liability is calculated is CYP 200,000.When he gets his IPT bill, he splits it between those people who are the ‘beneficial owners’ of the properties (ie. those people who have bought properties, but who have yet to complete their purchase and get Title Deeds).So even though the assessed value of each individual property means that it is exempt from IPT (properties whose assessed 1980 value is below CYP 100,000 are exempt) the ‘beneficial owners’ are required to pay.
Advice on Immoveable Property Tax
Cyprus Property Tax Refunds
Dear Sir, Question: I am told that I can get a refund on the property taxes that I have been charged by the developer.
When I bought my apartment, five years ago, prior to transfer the developer charged me £360 for property taxes. Can I claim this amount back?
Answer: There is a government property ownership tax that is charged on all real estate, from 0%-3½% based on a 1.1.80 value. There is an exception, however that on up to £100,000 value of property, the owner is excluded.
For values over £100,000 but under £250,000 the tax is 2½%. For values over £250,000 but under £500,000 the tax is 3%. For values over £500,000 the tax is 3½%.
In your case, when you bought your property from the developer and depending on your contract, the developer charged you the analogy of the project’s property taxes.
The value of 1.1.80 is set by the Lands Office when the titles are issued, so no-one knows really what the charge is, until the deeds are issued. Because the developer might have in his ownership property (in total) in excess of £100,000, then he is charged the tax, which he passes on to his purchasers.
You can claim, however, a refund from the Income Tax Department charged to you, provided you do not own property in excess of £100,000 (as at 1.1.80) and provided you have deposited your contract at the Lands Office and provided you are a purchaser as a person and not a company.
Yours faithfully,
AP. Loizou F.R.I.C.S.
Cyprus Property Help & Advice Centre™ ® ©The Black Art of Buying Property in Cyprus™ ®
The Cyprus Informer™ ® ©
http://cyprusinformer.eu
