New property sales tax payable by the vendor

New property sales tax payable by the vendor

Real Estate Tuesday, 16 February, 2021

The House of Representatives on Thursday passed a law levying a 0.4 per cent tax on all sales of immovable property, the proceeds of which to go toward supporting Greek Cypriot refugees.

The legislative proposal, passed by a unanimous vote in the plenum, aims to compensate refugees for their inability to possess, have access to, or otherwise gainfully use their land in the north.

It provides for a tax on any sale/transfer of real estate, as well as on the transfer of shares in a company where that company owns immovable property or where the transfer of the shares results in the buyer taking control of the corporation or exploiting the immovable property in question.

The levy is payable by the seller of the property.

The funds raised will go into a fund managed by the Central Agency for the Equal Distribution of Burdens, the state agency tasked with assisting refugees of the 1974 war.

Speaking on the House floor, ruling Disy leader Averof Neophytou welcomed the consensus on the bill.

He called it a correct move, though one that would not solve refugees’ problems on its own. That objective, he added, can only be achieved through a settlement of the Cyprus issue.

The between €16 million and €20 million raised through the tax was at least something, Neophytou said.

Main opposition Akel said political parties had been forced to table legislation due to the government’s ‘indifference’ on the matter.

Akel had proposed a scalable tax rate depending on the value of the property being transferred, but their amendment did not muster the necessary support.

Diko MP Charalambos Pittokopitis noted that throughout the years the state has failed in its duty to adequately help refugees.

He also expressed surprise that the ruling party backed the bill, given that the government has indicated it is opposed to the new tax.

Edek leader Marinos Sizopoulos said that though the financial support to refugees is a positive, the political aspect is more significant.

After 2008 and the “wrong” decision – as he put it – of the European Court of Human Rights greenlighting the Immovable Property Commission (IPC) in the north, many refugees in dire straits took to the IPC to sell their homes for a fraction of the real value.

Given the government’s stated opposition to the bill, the president may refuse to sign off on the law and return it to the House.

Source: Cyprus Property News

Christos Nikolaou

Author: Christos Nikolaou

BEng Mechanical Engineering, MSc Real Estate, ETEK Property Valuer, Register and Licensed Real Estate Agent.

Christos Nikolaou is the founder and Managing Director of Property Canvas, he holds a license as an Estate Agent from the Association of Real Estate Agents of Cyprus and he is a registered Property Valuer in the Technical and Scientific Chamber of Cyprus (ETEK). He is the author of our “New property sales tax payable by the vendor” and is a certified advance negotiator.

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