Property Tax

[MARTEE]

Good Morning All

Would someone be so kind as to explain in layman's terms the payment regarding Immovable Property Tax.

I had reason to contact my developer to ask for a copy for some paperwork which has taken over 4 weeks and up until
now I haven't seen--however on my last text to him he replied that it is being sorted but I have to pay him
3900 euros for the immovable property tax ?.
Never heard from him for years until my request.

Before I speak to him regarding this I am asking is this correct ?

We do not have Title Deeds and they are as I understand not available at present.
We do not live on the Island and have had the property since 2004/2005.(Purchased new)

Many Thanks

[KG]

As I understand it, until 2014 the owner of the property (i.e. the developer) was responsible for the IPT, until the title deeds were issued, and then the bill would be passed to the buyer with the transfer of title. In 2014 the government changed the law to allow the developer to hand over the liability from 2014 to the purchaser, so you should have a liability for the IPT from 2014 i.e. 2 years.

You haven't said what sort of property is involved, but I think I can say without fear of contradiction that the liability for the two years will be nothing like €3900. My own (large detached house) property tax for 2015 was of the order of €200, with a similar amount for 2014.

The developer should have informed you in 2014 that he was handing over the responsibility to you.

I think you need to visit the Department of Inland Revenue (you will get nowhere with telephone or e-mail) or get your solicitor to do so on your behalf, and ascertain if the tax has been paid for 2014 and 2015 by the developer. The tax office will require the developer to complete a valuation form for the property before they can evaluate the amount of your liability for 2014/2015.

I think the developer is trying to get you to pay all the taxes due since the house was built. You should not pay that until the title deeds are issued. You need him also to produce the receipts from the tax office for 2014 and 2015 if he has paid those. My bet is that he hasn't, so be prepared for a modest penalty charge for late payment for 2014 and 2015 when eventually it is resolved.

You will need the help of your legal adviser to get to the bottom of this, especially if you are not on the island. Don't pay anything until you have that legal advice.

[mo watt]

thanks KG for that ...I am trying to sort mine ....again stupid monies asked for by the developer ....he even wants us to pay his accountant as he has no money!!!! will be hopefully sorting it all next week ...will see!!!

[MARTEE]

Many thanks for the reply I did think it wasn't right as I remember reading something months ago about it.
Am back over in a couple of weeks and will see Lawyer then and then contact developer.

Once again thanks.

M

[Mike.1940]

You have to realise that builders pay IPT at the commercial rate. We had to pay at a higher rate for the last 8 years, but, now we have the deeds and as our property is rated lower under the 1980 rules and we both are owners there is nothing to pay anymore under that ruling. There may be some to pay when we are revalued. We are awaiting a full rebate of IPT paid so far through our Lawyer which takes up to 18 months. As mentioned before do not pay anything without consulting your Lawyer.

[Nigel-Howarth]

Good evening Martee

Immovable Property Tax (IPT) is the local equivalent of the much debated Mansion Tax in the UK. It is an annual tax based on the 1980 value of the property (and for 2014 and 2015 you should have been paying these directly to your local Tax Office in Cyprus – see http://www.news.cyprus-property-buyers. ... id=0039392 )

IPT is a personal tax calculated on the total 1980 values of all the properties purchased/owned by a taxpayer. You can see the current rates for 2013, 2014 and 2015 at http://www.news.cyprus-property-buyers. ... id=0018004

It is likely that your contract obliges you to pay IPT from the year in which you took delivery of the property. Until the law changed in 2014, your developer would have been paying IPT on all the properties registered in the company’s name (including the one you purchased) and you need to reimburse the company the amount that relates to the IPT on your property from the year in which you took delivery. €3,900 may seem high, but as the 1980 value of properties registered to your developer will be considerable he will pay tax at a much higher rate – but once you have the deeds to the property registered in your name you can submit an application to the Tax Office to recover any legitimate overpayments.

BUT before paying your developer the company needs to supply you “with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property.” (Please refer to this letter from the Interior Ministry.)

Regards,

[MARTEE]

Good Morning Nigel,

Many-many thanks for the reply-it makes easy reading now along with the links.

Will endeavour to sort this when I am out in 2 weeks.

[Charis Charalambous]

Dear MARTEE

As you have purchase your property since 2004/2005 all kind of taxes are normally charged in the nameof the developer, the registered owner of the title deed of the land.

Immovable Property Tax in the past was charged to in the name of the developer from the date of ofifcial delivery and possesion of the property to the the purchaser until 2013. If your have accepted in the Sales Ageement these charges to be debited in your account for settlment prior to the transfer of the title deed to your names you are aware of this matter.

Note all developers in Cyprus had estimate the market value of 1/01/1980 value to declare in the list of all their Properties to the Tax Authority to be assessed for IPT. These estimated values used to calculate the property tax values are sometimes much higher to the actual land Registry value from my own experiecne for many years after the issuance of the separate title deeds.

In your case the developer asked you to pay 3,900 euros without giving you any explanation. I assume this amount coveres the period of "9" years 2004-2013. If you know have the Architectral drawings of your property and the covered area is know it is possible to estimate the market value of 1/01/1980 to challenge the developers bill of 3,900 euros. If you need assistance to estimate the above and investigate your title deed situaton of your property you are wellcome to make contact with me at my private email if you wish I helped many people thta are in a similar situation. Property Tax it is overused by developers in Cyprus, you need experience to be able to tackle this matter carefully in order to obtasin your title deed.