Cyprus Property Forum for Buyers, Sellers & Investors

Dear Nigel, help required if possible.
My wife and I bought and paid for ? a 2 bedroom apartment (complex of 24) in 2006 for 120000e. Our neighbour had previously registered for IPT and found out the 1980 value for each flat (approx 20,000e). So last week we visited the solicitor in view of getting the deeds, they gave us a "statement" from the developer (which we believe has not been paid) that we owe, comprising of property tax 06-2012 @ 213e p.a , sewerage 06-2014 @ 186e p.a and Municipality @ 80e p.a ( which coincidently I have always paid). The Inland revenue web site rates put us at zero tax for 06-2012.
The solicitor has not offered us any proof from the developer that these bills have been met or are indeed correct but has said they are the developers tax liabilities and any over payment could be liable for a refund? not sure if the sewerage is ball park figure. What to do ???

Many Thanks.

Dear Tiki,

Welcome to the forum.

Firstly it is vital that the developer supplies you with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property as required by the Interior Ministry. (Refer to this letter from the Interior Ministry).

Without these records you may face great difficulties when trying to obtain a refund of legitimate overpayments of IPT from the Inland Revenue Department.

Until you have paid the Property Transfer Fees and the Title Deed to the property has been registered in your name, it is owned by the developer and he has to pay the IPT. And because his company will own all those properties it has built whose purchasers do not have the Title Deeds he will pay IPT at a much higher rate as it is calculated on the total 1980 value of the properties registered in his name:

For years 2006 - 2011 he will have paid at the rate of 0.4%
For 2012 he will have paid at the rate of 0.8%

Based on a 1980 value of €20,000 (which I strongly suggest you check), he will have paid Immovable Property Tax amounting to €640 for the property you purchased. (If he failed to file an annual IPT return - or was late in paying, the Inland Revenue will have fined him).

If you/your lawyer is able to extract this information from the developer, you will be able to submit a claim to recover all the IPT you paid (but not any fines that the developer has had to pay).

Once the property has been registered in your name, you will not be liable for IPT (at least for this year).

As for the Sewerage Tax, this (I believe) is also calculated on the 1980 value of the property. Sewerage Charges are something different - in some areas companies are installing sewerage systems to collect sewerage rather than you having to collect it via a soak-away in a storage tank. In areas where these systems are being constructed, those living in the area have to make a contribution towards their cost. (You may have read about the alleged corruption in Paphos involving the sewerage system there).

If you have paid the Municipal Tax, then obviously you do not have to pay this again.

I suggest you speak with your lawyer again and see if they are able to get the information you will need.

Regards,