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Cyprus

House approves law for tax breaks for landlords renting to businesses

Parliament on Thursday passed two items of legislation granting tax breaks to landlords who voluntarily reduce their rents to businesses financially stricken by the coronavirus-related restrictions.

The first bill provides for tax credit equal to 50 per cent of the reduction in rent, which must be 50 per cent.

The rent reduction should be for up to three months – the landlord may choose which three.

It’s intended to incentivise landlords to lower their rents to businesses suspending operations from January 1 through June 30.

A similar regimen had applied until December 31 of last year, with the government recently deciding to extend it.

The second bill passed provides for exemption from contributing to the defence fund. This concerns premises owners who voluntarily reduce rent. The contribution is 3 per cent on 75 per cent of the rent.

Similar laws are in force, but they cover all businesses. The bills in question are only addressed to businesses that have partially or fully suspended operations because of government measures to stop the spread of the coronavirus. They apply to companies and individuals.

Both bills passed by 40 votes for, and one against.

Diko MP Charlalambos Pittokopitis, who cast the sole vote against, described the measures as “smoke and mirrors” with no real benefit.

Other MPs from opposition parties, voting in favour “but under protest,” said a more effective measure would have been for the government to directly subsidise tenants’ rent payments.

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