Continuing economic problems in Cyprus may see foreign residents of the island hit by rises in two major taxes. The nation is currently negotiating the terms of an EU bailout to help finance its debts, following similar rescue packages for Greece, Ireland and Portugal.
The Cypriot government is expected to announce significant tax rises as part of the austerity package, which will see both income and property taxes rise. Keep reading to learn more.
Cyprus set to lose its reputation as a low tax country
One of the main reasons that foreigners buy property in Cyprus is that the country has relatively low rates of tax. However, taxes are set to rise as part of the bailout deal.
Currently, the top rate of income tax in Cyprus is 35 per cent, compared to 52 per cent in Spain, 45 per cent in the UK and 46.5 per cent in Portugal. And, you can earn up to of ââ¬19,500 (ã15,660) before you start to pay tax.
A spokesman for international tax specialist Blevins Franks said: ââ¬ÅWe cannot rule out the possibility that it will look to earn more revenue from income taxes, whether from employment or income from capital. Tax rates here are relatively low.ââ¬Â
The Daily Telegraph reports that ââ¬Ëexpats feel the government is under pressure to increase its tax grab to reduce its fiscal debts as quickly as possible.ââ¬â¢
One British expat, who wished to remain anonymous, told the newspaper: ââ¬ÅBasically, the government is looking at lots of different ways it could raise its revenues without too much resistance from people.ââ¬Â
As well as possible changes to
income tax, the Cypriot government is also considering an additional property
tax on all homes worth more than ââ¬500,000 (ã402,200). This is on top of plans
to introduce medical fees in state hospitals and a rise in Value Added Tax
(VAT) to 18 per cent.
author Nick Marr
Are you looking to buy property in Cyprus ? Limassol , Nicosia , Paphos , Famagusta , Peyia
Are you looking to rent property in Cyprus ? Protaras , Limassol , Larnaca , Paphos , Pissouri
Author
Nick Marr
I am an internet entrepreneur with a passion for driving big audiences and a love for real estate. I have had plenty of ups and downs which has given me the experience to help others launch their own businesses. I enjoy projects that save consumers time and money, challenge convention and add real value to peoples lives.