Under the Cyprus “Immovable Property Tax Laws 1980 – 2004 all property owners, regardlenss of whether they are resident in Cyprus or not, they are liable to pay an annual tax based on the total value of all the immovable property registered in their name.
Cyprus property tax is calculated on the market value of the property as at 1st January 1980 and must be paid annually to the Inland Revenue Department.
Individual owners are exempt from this tax if the 1980 value of their property is less than €12,500.
Every registered owner whose immovable property value exceeds €120,000 is required to submit a declaration of Immovable Property (IR301 and IR302) and must pay the respective tax every year before the end of September.
Immovable Property Tax Rates are as below:-
Assessed 1980 Property Value
Annual Property Tax Rate
Accumulated Tax (Max)
|€1 to €12,500|
|€12,501 to €40,000|
|€40,001 to €120,000|
|€120,001 to €170,000|
|€170,001 to €300,000|
|€300,001 to €500,000|
|€500,001 to €800,000|
|€800,001 to €3.000,000|
|More than €3.000,000|
Due to the delay in issuing Title Deeds, some developers are the registered owners of land banks and properties whose value is many millions of EUROS.
According to the law, it is the “registered owner” who is obliged to submit annual declarations of their immovable property to the authorities and pay the Immovable Property Tax, plus any penalties imposed due to late payment, until Title Deeds are issued buyers pay Property Transfer fees to secure ownership of the property they have purchased, which will then be registered in their names.
However, in their Contract of Sales, developers often include a clause making buyers liable to Immovable Property Tax when they take delivery of a proporty and will ask buyers to pay their contribution.
Some developers attempt to charge buyers outrageous sums of money based on the purchase price of the property and some will even add the penalties they been charged by the tax authorities for late payment.
Before paying any Immovable Property Tax demanded by a developer, buyers must ask the developers to provide them with written evidence of the amount of Immovable Property Tax that has been paid to the Inland Revenue of the land on which the development has been constructed and the buyers share of that land. (e.g. if the development has been constructed on 10,000m² of land, and the buyers plot measures 500m², then the buyer should only pay 1/2 or 5% of the tax bill).
Reclaiming Immovable Property Tax From The Inland Revenue
Once buyers receive their Title Deed they may apply to the Inland Revenue, (form IR314) to reclaim any overpayment of Immovable Property Tax paid by the developer on their behalf to the Inland Revenue. Buyers should take the completed form together with the below:
1. Copy of the Title Deed of the property
2. Receipt issued by the Lang Registry when the Contract of Sale/Sale Agreement was deposited for specific performance
3. Copy of the Contract of Sale/Sale of Agreement
4. Receipt(s) issued by the property developer confirming the Immovable Property Tax paid to their local Inland Revenue Office
Buyers should note that the 1980 value of their property (the value on which Immovable Property Tax is calculated) will be assessed by the Valuations Desk at the Lang Registry at the time their Title Deeds are issued.