Fund raises €43 million for struggling refugees

MPs heard on Tuesday that to date some €43 million has been collected through a special levy on immovable property transactions, the proceeds going to assisting refugees facing financial hardship.

In February 2022 parliament passed a law introducing a levy of 0.4 per cent on the sales price of immovable property. The same levy is imposed on the sale of shares of a company, when the company owns immovable property, and such transfer will result in the purchaser acquiring the control of that company. The obligation to make the above contribution burdens the sellers of real estate.

The levy is intended to serve humanitarian purposes. The proceeds generated go to a fund managed by the Central Agency for the Equitable Distribution of Burdens.

The House refugees committee was discussing a legislative proposal tabled by Dipa MP Alekos Tryfonides that seeks to retroactively exempt certain sales transactions from the levy. The sales to be exempted are those where the transaction is intended to restructure a non-performing loan.

Under the bill, any such transactions taking place between February 22, 2021 and November 17, 2022 will be exempt from the special levy.

Tax Commissioner Soteris Markides described the proposed change as “fair.”

He told MPs his agency has sent out 37,000 letters to taxpayers concerning payment of this fee. This concerns an estimated €24 million to be collected.

However, approximately 3,000 of these cases relate to property sales done in the context of restructuring non-performing loans – with a combined value of €2 million.

Markides said he has received numerous complaints from persons who feel they should not have paid the 0.4 per cent levy.

He added that ways can be found to refund those who already paid the levy and who fall under the exemption provided for in the bill.

The bill will go to the House plenum for a vote this coming Friday.

The matter came up during parliamentary review of the 2024 budget of the Central Agency for the Equitable Distribution of Burdens. Earlier, lawmakers had threatened to veto this budget after the government slashed €21 million from the state grant to the agency.

The finance ministry later came back with a promise that it would tack a note onto the state budget bill stating that any required credits to the agency would be made available.