Municipalities charge what they like

2 mins read

Real estate property tax has been abolished; however, the Municipal taxes remain in place.

These taxes are based on January 1, 2018 valuation as prepared by the Land Registry and a certain percentage is applied on this to deduce the Municipal taxes.

The question that we raise is how the percentage is calculated and where does it apply?

We were informed that the Municipalities who are in charge of the Municipal taxes, such as the sewage tax, estimate their expenses, submit them to the Auditor General and once approval is obtained, they go on to charge the owners with the percentage charge depending on the Municipality’s costs.

The explanation given is that more or less the charge is a cost-plus basis i.e. what it costs to the taxing authority to come up with the figures.

So, if we are to take an extreme example is that whatever the level of efficiency of a charging authority they are “ok” since they cover their cost, which the public has no right to object since the basis is not known??  It is the decision of the Auditor General (if any) that counts.

So, an apartment in Paralimni Municipality is charged 1.10% on the assessed value, whereas another apartment in Limassol bears a tax of 0.38% – an almost 300% difference.

We cannot understand why there is such a huge difference or is it because the Paralimni Municipality has a more expensive Mayor’s car and other hefty salaries than Limassol or they are less efficient than Limassol or what?

What is even more objectionable is that properties without any buildings, no access, but they fall within the development land zone, are also charged with sewage taxes, yet they do not have such a service available.

This non-availability period may take more than 10 years, yet the fields are subjected to the tax until and when they get it.

The reason for this is that the Sewage Board needs to collect a lump sum ahead of the time of execution so that they have the money to carry out the project.

So, in Platres we have waited for 15 years to have the sewage service, notwithstanding that our client was paying, in addition, €500 p.a. to empty the sewage pits of his home.

Having argued that this amount (€500 p.a.) should be deducted from the sewage tax it was turned down – “based on legal opinion” as we were told.

In another case where the property evaluation was assessed at x level and the client of ours paid the amount, this value-based 1.1.2018 was downgraded/reduced by the Land Registry and the client asked the Municipality for a refund (around €200 p.a.).

They told him they could deduct this from the next year’s charges since they did not want to “upset their books”.

You may remember our recent article on the subject “Who Governs Cyprus” where we concluded that the local “Mafia” be it white-collar ones (Municipalities included), are free to do what they are doing — this is another case to add to the list.

In a previous case (be it some years ago) we protested to a Mayor, who replied to our question why the property taxes in the tourist areas are so high, he replied: “because we do not charge the locals”!!

Duly reported, and in the end, the government included the locals as well – but is this the way to go?

Instead of the Auditor General handling such issues as a priority and reporting wrongdoings, he prefers the route of self-promotional actions, such as the subsidy of the bicommunal event/theatre at the Salamina ancient amphitheatre (he made a lot of fuss because the government offered €250 for the event!!).

This government has introduced all sorts of commissioners in an effort to improve/protect the citizens’ rights.

Yet on such occasions that we have applied to them, out of the 5 commissioners only one has replied that “we are looking into it” – no one came back and for the others, we are still waiting (18 months ago).

This Government told us that these commissioners are “the best of the best”.

We doubt it based on experience.