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By Peter Stevenson MEMBERS of Volunteer Doctors Cyprus have treated around 350 people at their free clinic in Nicosia since it opened three months ago, while two more, one in Paphos and one in Polis are due to open today. Limassol also has a free clinic, which was opened only last month, and plans have been drawn ...
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SOME 10 days ago, foreign minister Ioannis Kasoulides raised expectations by announcing the possibility of a deal with Turkey for the opening of the fenced off area of Famagusta, for the return of its inhabitants. In exchange the Cyprus government would agree to the opening of Tymbou airport to direct flights. ...
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By George Psyllides PRIVATE auditors have expressed doubt the electricity authority (EAC) could be considered a going concern and have asked its board to draft a credible plan to tackle the problem, according to the auditor-general’s 2012 report on the semi-state company. Among other issues, ...
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Are you eligible for an immovable property tax refund?

MOST of those who purchase immovable property are not subject to the payment of immovable property tax. However, since the property purchased has no separate title deed, they are obliged to pay the vendor the immovable property tax for their property until it has been transferred into their name. They do so according to the rate paid by the vendor and are entitled to its refund if they are exempted or taxed at a lower rate. This right is given to every purchaser provided his property was transferred to him, the purchase price and the immovable property tax on it has been paid and his sales contract was deposited at the Land Registry. To be entitled to the refund, a purchaser must prove that the vendor has paid immovable property tax for his property at a sum higher than the one he is to be charged or exempted.

The immovable property tax is imposed and payable every year prior to September 30 on the value of the whole immovable property of the vendor at its market value as of January 1, 1980 at the following rates:

€0 – 170,860.14, tax is 0

€170,861.85 - €427,150.36, taxed at 0.25%

€427,152.06 - €854,300.72, taxed at 0.35%

Over €854,300.72, taxable at 0.40%.

It is evident from the relevant provisions of the law that most foreign purchasers are exempt from the payment of the immovable property tax since they do not own a property valued over €170,860.14 as at January 1, 1980.

The Inland Revenue Department collects the immovable property tax from the vendor since he is the registered owner and pays the tax for the whole of his property, including that of the purchaser, according to the rates which apply to him. This is due to a lack of a separate title deed for the property of the purchaser, which remains in the name of the vendor. Therefore, the higher the value of the property of the vendor, the higher the tax rate and the immovable property tax payable. Consequently, the purchaser must annually pay the vendor an immovable property based on the vendor’s tax obligations rather than on his own. If the purchaser was to be taxed on his property, he would be exempt or pay tax at a lower rate.

The immovable property tax is always payable by the registered owner, thus by the vendor, who claims it from the purchaser. However, the person who is subject to the payment of the immovable property tax is the “owner” of the immovable property, a term which means the purchaser is the person entitled to be registered as the owner so the relevant provision in the law qualifies him to claim the refund.

To clarify: If Mr A bought his only property in 2000 for €85,430, its value at January 1, 1980 is estimated to be €25,620. If the value of the whole property of the vendor, including that of the purchaser, as at the 1.1.1980 is up to €170,860.14, the tax rate is 0 in which case there is no tax payable or refundable; if the value is up to €427,150.36, the tax rate is 0.25%; if the value is up to €854,300.72, the tax rate is 0.35% and if the value is over €854,300.72, the tax rate is 0.40%. Therefore, Mr A will have to pay annually either no tax; tax at 0.25% = €64.05; tax at 0.35% = €89.67; or tax at 0.40% = €102.48. These amounts payable annually to the vendor can be refunded from the Inland Revenue Department since Mr A is tax exempt.

Purchasers who are entitled to a refund of the immovable property tax need to apply to the Inland Revenue to claim the amount of the tax the vendor paid for their property. They are entitled to do so provided the property was transferred into their name, their sales contract was deposited at the Land Registry and they submit to the Director of the Inland Revenue the relevant sales contract and receipts proving that the immovable property tax was paid.

n George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca. Tel: 24 818288, email

(Source: Cyprus Mail)

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