Cyprus: Cyprus immovable property tax reform

Abstract

The Cyprus Council of Ministers has approved the reduction of immovable property tax rates by 50% from 1 per thousand (that had been initially proposed) to 0.5 per thousand. The decision, which was approved on June 1 2016, of the reduction of the immovable property tax rate came following the obligation by the EU to charge VAT (at the current rate of 19%) on transactions of properties which constitute a commercial transaction. This VAT will be imposed on commercial transactions and will thus mainly impact land developers. Individuals will only be taxed in cases of purely commercial activity.