His proposal to do away with Immovable Property Tax (IPT) is no flash in the pan, ruling DISY leader Averof Neophytou said on Wednesday.
Neophytou caused a stir earlier in the week when he sprang the idea of scrapping IPT and covering the €45 million the state would lose in revenue via spending cuts – for example by rationalising pensions paid out to state officials.
Coming back, the DISY chief said that during this Thursday’s House plenary he would submit specific proposals equating the retirement age of state officials to workers in the private sector. And on Friday, he would separately unveil a detailed plan regarding IPT.
“We were not bluffing,” asserted Neophytou following a meeting he had with the Chamber of Commerce and Industry (KEVE) on Wednesday morning.
He was responding to criticism that the only reason he proposed abolishing IPT was to throw a spanner in the works after DISY found itself isolated in supporting the government’s proposal for a flat IPT rate.
The first bill to be tabled by DISY would deal with bringing state officials’ retirement age on a par with the “rest of the people”, he said.
“People are asking, and it is a valid question, why a construction worker should retire at 65 while members of parliament and ministers retire at 60.”
Such cost-saving measures cannot on their own fully address fiscal issues, Neophytou added, and that was why he would also be submitting “a package of proposals” for IPT.
The proposals would be backed up with figures and timetables, with a view for implementation as of January 1, 2017.
Neophytou recalled that back in 2010, the state collected some €11 million from IPT, which later skyrocketed to around €80 million during the latter part of the Demetris Christofias administration.
IPT revenues remained at or above that level during the three-year economic adjustment programme following a March 2013 bailout deal with international lenders.
Neophytou has argued that the state was being inconsistent and unfair in taxing only immovable property. Someone who invested his savings in land was being taxed but someone who invested in gold or bonds was not.
The kerfuffle began after main opposition AKEL tabled a proposal for ‘progressive’ taxation – the higher the value of the property the higher the tax – which would exempt half the owners from paying tax. As part of its rhetoric about helping the poor, the party wanted the government’s flat rate of 0.05 per cent at 2013 prices, scrapped. This led to a flurry of suggestions by other parties – ranging from exempting the first residence from IPT, to exempting farmland or land in protected zones.
The government had proposed introducing a flat IPT rate of 0.05 per cent and scrapping the IPT paid to local authorities altogether.
The flat rate will be levied on property values updated in 2013. To date, IPT is calculated on 1980s values, excluding many properties because they did not exist at the time. Rates differ depending on the value.
Exempted from paying are the small owners with an IPT of up to €25. This would exempt some 65,000 property owners.