IMMOVABLE PROPERTY TAX ….. YOUR OBLIGATIONS AS OWNERS OF PROPERTY IN CYPRUS.
Recently there has been a lot of press about Immovable property taxes or IPT as it is more commonly known.
To simplify matters, the law states that owners of immovable property must pay taxes according to the value of these assets. Its is also norm but according to the law, that each owner who has possession of the property to pay all bills, all taxes and all expenses of the property.
Until recently, most developers paid the immovable property tax (albeit it was at a higher tax bracket as the IPT was determined by the value of the property – which as the property was in the name of the developer, meant the entire plot /project and not just your property) until the transfer of the title deeds was executed, at which point the owner was then responsible to pay this.
However, the law changed and now ‘the registered’ owner of immovable property is responsible to pay their IPT obligations from 2014. This means that on an annual basis, you must complete a form to the TAX AUTHORITIES and declare all the immovable property that you own. THE TAX AUTHORITIES will then calculate the amount of IPT you must pay.
If you decide to sell your property, prior to being able to complete the transaction, you will be required to complete a tax clearance which will show if you made any profit from your initial purchase, but now, the IPT also falls within this category and the TAX office will not provide a tax clearance until the IPT tax has been paid.
There is a new provision by a 2014 legislation that states (in regards to IPT Taxes) that if you can prove that you do not have the title deeds because of the fault of your developer, then you should not pay your IPT. However you should state your reasons for not paying in writing to the director of the Tax Authorities and this should be sent recorded delivery to ensure you can prove that you submitted this declaration.