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House passes bill regulating 0.4 per cent tax on real estate sales

File photo: The House of Representatives

The House on Thursday passed a bill regulating the levying of a 0.4 per cent tax on all sales of real estate, the proceeds going to support Greek Cypriot refugees.

Despite the unanimous vote, and support for the bill from all parties, opposition MPs traded barbs with their colleagues from ruling Disy over the minutiae.

The initial legislation levying 0.4 per cent was passed back in February 2021. It provided for a tax on any sale/transfer of real estate, as well as on the transfer of shares in a company where that company owns immovable property or where the transfer of the shares results in the buyer taking control of the corporation or exploiting the immovable property in question.

The levy is payable by the seller of the property.

The funds raised will go into a fund managed by the Central Agency for the Equal Distribution of Burdens – the state agency tasked with assisting refugees of the 1974 war.

However, the February 2021 law did not specify how the taxes would be levied or by which agency – meaning it was unenforceable.

The bill passed on Thursday corrects that omission, by designating the Tax Department as the responsible agency.

What caused friction at the House plenary, was a clause stipulating that the 0.4 per cent tax will apply retroactively – from February 2021 when the original law passed.

Disy tried to cancel this clause by proposing an amendment, by which the tax would be levied as of now. Their proposed amendment was defeated.

Diko MP Nikos Kettiros, who also chairs the House refugees committee, lambasted the ruling party for springing a surprise by introducing their amendment at the last moment.

And he accused Disy of “carrying water” for realtors.

Edek’s Costis Efstathiou said that since February 2021 – when the tax ought to have been levied – the notional tax revenues accrue to some €17 million.

This was money “owed” by the state to the refugees, he remarked.

For his part, Diko deputy Zacharias Koulias proposed that the state now cover the €17 million, instead of “chasing down” people involved in real estate transactions over the past year and a half.

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