Cyprus Plans Property Tax Hike

By ExpatBriefing.com Editorial 17 August, 2011

Cyprus plans to increase the taxation of immovable property as part of an austerity package which hikes value-added tax, personal income tax and withholding tax on savings interest.

in a move expected to raise around EUR24m (USD34.5m) in additional revenues, the tax bands on immovable property are to be altered. Based on 1980 property values, immovable property with value of EUR120,000 or over will be subject to tax, down from EUR170,000 previously. According to the plans:

As detailed by the government last week, other measures in the fiscal consolidation plan include a 2% VAT rate increase to 17%, a hike to withholding tax on savings interest derived by Cypriot residents from 10% to 15%, and the introduction of an additional top rate of personal income tax of 35% on income above EUR60,000 (USD41,750).

In addition, companies formed in Cyprus will soon be required to pay a EUR350 annual fee to the government.

The measures are aimed at achieving an additional 1% reduction in the fiscal deficit expected in 2011, to 5.5% of gross domestic product (GDP), and a European Union-assigned deficit target of below 2.5% of GDP by the end of 2012. However, it is far from certain that the fractious Cypriot parliament will accept these government proposals as they stand.

A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp

Tags: Expatriates | Tax | Investment | Real-estate Investment | Value Added Tax (VAT) | Property Tax | Real-estate | International Financial Centres (IFC) | Offshore | Withholding Tax | Cyprus |

 





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