Sale of Immovable Property

Sale of Immovable Property

New tax announcement

The Parliament has passed a new law levying on a 0.4% tax on all sales of immovable properties. The imposition of this levy is intended to serve humanitarian purposes by supporting Greek -Cypriot refugees. The funds raised will go into a fund managed by the Central Agency for the Equal Distribution of Burdens.

In accordance with the amended legislation all transfers of immovable property as defined in the Immovable Property (Tenure, Registration and Valuation) Law Cap 224   and shares of a company which are not listed on any recognised Stock Exchange and that directly or indirectly owns immovable property, a tax of 0.4% will be paid by the seller of the property or shareholder.

For immovable properties the tax is calculated directly on the sale amount and in case of disposal of company shares on the latest general valuation value of the property attributed to the shares.

It is considerable to mention that the tax is not imposed in case of a company reorganization as defined in Income Tax Law, a restructuring of a non-performing loan as defined in the Capital Gains Tax Law, a sale filed either with the Department of Land and Surveys or the Cyprus Registrar of Companies as the case may be prior to 22 February 2021.

The Tax Commissioner announced in November 2022 that it intends to grand a reasonable period of time to settle obligations that have arisen during the period between the initial enactment of the law imposing the Tax (22^nd of February 2021) and the current amending legislation (18^th of November 2022) and will not impose interest or penalties on such settled amounts.