Only Pay Your Own Immovable Property Tax
Sam Orgill ProACT PArtnership Expatriate Advice Suggests You enjoy the reductions in Immovable Property Tax (IMPT) and that you Only Pay Your Own Immovable Property Tax
Don’t get caught out. Since 2014 contract of sale owners, without title deeds, have been able to register and pay IMPT directly. This is always at a lower IMPT rate than the developers who pay at a rate based upon their total land holdings.
This is because developers pay an IMPT rate based upon the whole title deed of their development. This could be 3 times as much, 1.9% instead of 0.6%. So registering to pay IMPT direct if you hold a contract of sale gives a big tax saving on your overseas property.
Buyers only have to pay developers IMPT for previous years if their contract of sale explicitly states the buyer is responsible for IMPT.
IMPT Rebate of Tax Paid to Developers
While a tax rebate is available to buyers for paying IMPT to developers for previous years (after title deeds are issued!) , this is only rebated if the contract of sale confirms the liability, and the rebate will not include any IMPT tax penalty of interest paid by the developer for late payment of IMPT from previous years.
ProACT assist clients to negotiate to pay the minimum IMPT in such cases on the principle IMPT is the tax of the title deed owner. Ask us how if you have not reclaimed IMPT paid to a developer.
Tax Saving Plans
What steps should the overseas property investors be taking to protect property assets from the taxman. Tax Changes make this a good time to review how best to protect your wealth and income. .
By gifting property to family, creating more owners, the overall IMPT rate for the property can be reduced, which means the family can save IMPT tax.
Gifts of Cyprus property to family can also avoid inheritance tax at up to 40% in the UK.
This process can also capitalise capital gains and reduce any potential capital gains tax of 20% on a future sale.
The gift can be made to a family member, Investment Company or a family trust that you can control and manage as you would with a investment or pension fund. Someone administers for you while you retain ownership.
Who can you trust?
In crusader days Knights would lock up their wife’s in a chastity belt and entrusted the key to a friend who was responsible for protecting his assets. This law became part of English law and is a basis of inheritance tax trust and estate planning.
Make a Will and Trust your family and friends to protect your assets on death. A Family Trust avoids Cyprus laws of succession. By creating a Family Trust today for Cyprus Property you could also make tax savings in capital gains, inheritance tax, IMPT and inheritance taxes on your death.
Look Forward – Plan Ahead
Overseas Property in Cyprus has become a better investment with lower property taxes in Cyprus. ProACT can offer help and guidance about the Movable Property Taxes for Expats . Asset Protection is about looking forward to make tax savings. ProACT expat experts offer tax saving for people living and working and investing abroad. Find out more at our website.
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