Cyprus Mail

No sign of agreement over IPT ahead of House plenum


Lawmakers on Monday again failed to find common ground on a new regime governing Immovable Property Tax (IPT), as a result of which the fate of a government bill on the matter will be decided during this Thursday’s House plenum.

Ruling DISY is proposing a 75 per cent discount on payable IPT for this year, and scrapping the tax altogether as of 2017.

Under their bill, payable IPT for 2016 would be based on 1980s prices.

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.

The government bill entails levying a flat rate on property values updated in 2013. Initially the government wanted to levy a flat IPT rate of 0.05 per cent.

Under that proposal, the government would have collected €45 million, of which a third would be channelled to local authorities, whose own property tax would be abolished.

Later, the finance ministry changed its mind, proposing a 0.035 per cent flat rate. The central government and local authorities will now collect €30 and €15 million respectively.

Opposition parties argue that a flat rate benefits large landowners and the wealthy, and are pushing for a staggered rate. But during successive discussions in committee they have been unable to reach consensus.

AKEL wants a staggered rate, but based on updated 2013 property values.

Socialist party EDEK on Monday came up with an even more novel notion – doing away with IPT, effectively immediately.

EDEK leader and MP Marinos Sizopoulos went so far as to argue that taxes on property are unconstitutional.

There is also disagreement among the parties on the taxable threshold – although most appear to be on board with the idea of abolishing IPT, but starting next year.

Unless the parties come to agreement by Thursday’s plenary, the government bill will remain on the table, with the parties submitting amendments to it on the House floor.


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