Stavrakis backs down on Cyprus tax property plan

Property worth over EUR 1 mln to be taxed

The government has bowed to intense pressure from real estate developers and the opposition DISY party over its plans to amend the reappraisal of the island’s property tax system, which was supposed to raise up to EUR 100 mln in additional revenue as part of the grand scheme to raise EUR 500 mln to plug the deficit.
Finance Minister Charilaos Stavrakis has now clarified that the tax plan will affect only 2000 people as property of up to EUR 1 mln will not be taxed.
“Only 2% of the Cypriots and those who have properties exceeding EUR 1 mln will be affected by the measure and not 90% as the opposition wants the public to believe”, Stavrakis said after his meeting with Interior Minister Neoclis Silikiotis.
“Today, only 1.3% pays taxes on properties while 98.7% doesn’t”, Silikiotis said.
“Based on the values of 1980, the properties of up to EUR 170.000 are not taxed. With the new revaluation, the properties of up to EUR 1 mln will not be taxed and with the new readjustment more than 80% of the citizens will not be taxed”, he added.
Silikiotis said that the bill on title deeds is still pending before Parliament, while the deliberations on the measures for the inactive plots is still in progress.
Only a week ago when the measures were announced, there was no mention of the minimum level of property tax, which led opposition Deputy Chairman Averoff Neophytou to describe the tax as a stealth “tax-raid”.
“The value of land in 2010 is 20 times higher than in 1980 and this means that the Cypriot citizen who currently pays a tax on real estate of EUR 1,000, next year will be called to pay EUR 20,000”, Neophytou said.