On 14 July 2016, the House of Representatives approved changes to the Immovable Property Tax Law (the "Law"). The amendments, which were published in the Official Government Gazette on 25 July 2016, reduce the immovable property tax burden for tax year 2016 by up to 75% and abolish the immovable property tax as from 2017.
Prior the amendments to the Law took place, the tax was imposed on an annual basis, on the market value (as at 1 January 1980) of the immovable property situated in Cyprus as at 1 January of each year.
The tax was calculated by applying certain rates on the total market value of the immovable property owned by each person (either individual or company irrespective of its tax residency status).
Now the Law provides as follows:
- Taxpayers that settle their 2016 IMP tax liability by 31 October 2016, are only required to pay 25% of the tax due as this is calculated according to the above rates (75% discount).
- Taxpayers that settle their 2016 IMP tax liability during the period 1 November 2016 – 31 December 2016, are only required to pay 27.5% of the tax due as this is calculated according to the above rates (72.5% discount).
- Taxpayers that do not settle their 2016 IMP tax liability by 31 December 2016, will be subject to an additional 10% charge, imposed on the 27.5% tax due.
- If the taxpayer's 2016 IMP tax liability is less than €10, the tax is not collectable.
Finally, the IMP tax is abolished as from 1 January 2017.
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