Wednesday, October 16, 2013

Paying the 'Immovable Property Tax' in Cyprus

Seven years ago when we were buying our house here in Cyprus, the previous owner told us that there was one bill that would not be chased up. We thought he said it was a municipal tax related to the new sewage works.

At least, that's what we thought he said. His English was a great deal better than our Greek, but far from fluent. What was very clear, though, was that if we did not pay it, nobody would send a reminder, and one day we might have to pay a vast bill for ten years all at once.

We were a bit concerned about this, until a bill looking like this arrived:

Actually there were two of them, as we each (technically) own half of the house. Oddly one is addressed to Richard James and the other to Richard Jane; I assume the latter is supposed to be me.  I have obediently paid these bills every year and assumed that these were the ones we were warned about.

In recent months, since the banking crisis, we have been hearing rumours and reading reports about an 'immovable property tax'.  The Cyprus Mail ran an article supposedly to help us understand this tax - which implied that it was something that was payable every year. 

Not being very good with finances or the vagaries of the system, I somehow assumed that this must be the same as the municipal tax bill we had been paying every year. 

I hoped so, anyway. 

But I did start to wonder if in fact we SHOULD have received another bill every year, but that it had never arrived. It's hard to recall exactly what was said more than seven years ago, so maybe we had imagined the details, and that we were really being told about this Immovable Property Tax (which I shall henceforth refer to as IPT) - and that we were now going to owe rather a lot. 

Then I read an article which said that all IPT forms had been sent out. So, I assumed, since we had not received anything extra, it must simply refer to the Municipal bill we had been paying regularly.  

I could breathe again.

Last Friday Richard had a meeting with his sailing buddy. In the course of the conversation it transpired that someone from his office had gone to the local tax office in Larnaka to pay the IPT since there was a discount for all bills paid before October 16th. Apparently the majority of home-owners had NOT been sent an IPT bill. The whole situation, apparently, is chaotic and disorganised. 

So I did some more research and discovered this worrying article about the IPT. Our house is undoubtedly worth more than €120,000.  And while its value in 1980, as recorded on our deeds, is only €48,000, it was clear from the new banding that we definitely have to pay the tax this year, and possibly for previous years too.  Even if just for this year, the table on that page suggested that we would have to pay €880, and it wasn't clear whether that was one payment, or whether we would each have to pay that amount. 

So we found our house title deeds:

And set off for the tax office, which isn't far away.  There were two queues outside. We joined the longer one, but a helpful guy told us that this was the queue for people who were going to pay it because they were already registered, or had received a bill in the post. The other queue was for people who had not received a bill. 

So we joined the other queue, which moved quite fast despite there being only one person on duty. He took our deeds and made a phone call. He gave us forms to fill in, and told us to go to the fifth floor. 

On the fifth floor there was a group of people in the same situation. Some were sitting, some were standing, most were complaining. Our forms were in English so we filled them in, and eventually - after about an hour - it was our turn.  A young woman typed the information on our forms into her computer - interspersed with chatting with her colleagues around the office - and eventually gave us two printed forms, which contained our new tax reference numbers.  

We asked how much we owed, and she said she could not tell us - we had to go down to the fourth floor for that.

So we went down a floor, and it wasn't long before we were seen by another young woman, who entered yet more information on her computer, and presented us with two bills.  To our great relief, each bill was for €143 - apparently since we share ownership of the house, we pay 0.6% each of half the 1980 value (ie €24,000) which, thankfully, is nowhere near the large amount we feared. 

So, we asked, could we pay there and then?

No, she said, we would have to go back to the ground floor and join the queue. I asked if we could pay online, and she said that we could indeed do that, at the JCCSmart site. But not until Monday, since our information would probably not be online yet. 

She then grabbed a small scrap of paper on which she carefully wrote out the lengthy reference numbers we would need. 

When we saw the length of the queue on the ground floor, we decided to try the online option, and to my great relief our information was there when I logged into JCCSmart on Monday morning, and entered the codes. 

Moreover, since I was ahead of the October 16th deadline, we did indeed have a 10% discount... and the amount we actually had to pay was just under €130 each. It's hard to imagine how this could possibly make much difference to the huge amounts of money that the Cyprus government is having to raise, and how it can even be financially viable, given the amount of time it seems to be taking to sort this all out. 

The IPT will undoubtedly be higher next year, when our house is revalued to nearer what it is actually worth, but at least we should be in the system by then, and thus - possibly - will get our bill in the mail. 

1 comment:

Anvilcloud said...

This whole post floors me — so to speak.