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Property taxes to be reduced by €20mn

02/07/2015 13:29
The government is proceeding with a series of bills to reduce property tax and to give incentives in order to encourage economic activity and investments.

Finance Minister Haris Georgiades, in statements at a press conference, said that from the reduction of property taxes, the state coffers will suffer losses of €20 mn - €21 mn.

He said that only one property tax will be imposed on the basis of a single low tax rate of 1/1000 on the prices of the latest general valuation.

Another proposal is the reduction of transfer fees by 50% for all transactions until 31/12/16.

The minister noted that a suggestion is made for the full exemption from the capital gains tax of the future sale of property that will be acquired until 31/12/2016.

In relation to the possession of property, the minister said that the taxation is simplified, becomes fairer and the tax burden is limited.

So as to encourage investments, Mr Georgiades stated that a new provision is to be established that of a tax discount on new capital.

The tax deduction, he said, will be calculated on the basis of a notional rate on the total capital of a company in a way that basically aligns the tax treatment of debt (since the interest payable is considered taxable expense) with the use of shareholders' interest.

This encourages the introduction of new capital to all companies, irrespective of the nature of their activities.

Also, the concession of increased capital discount for machinery, installations and buildings is extended till the end of 2016.

As regards to the attraction of foreign businessmen and high income level people, the finance minister referred to the introduction of the term “Non-Domicile”.

The main incentive for these persons will be their exemption from the special defense tax.

Moreover, the allocation of a tax relief on the fee of an individual who was Non-Domicile before the commencement of the employment will be extended too.