The radical proposal was presented by the ruling DISY party, asking for homeowners to pay 25 per cent of the tax asked for in 2015 as long as payment is by the end of October 2016. Payments made after then will carry a 2.5 per cent penalty surcharge, with payments made after December 2016 incurring a 10 per cent penalty, although this figure still remains far below the amount that would have been previously owed.
The decision to use the 1980 values was a controversial topic of debate, with some noting that the outdated values are unfair, while others point out that using more recent 2013 valuations would rely upon distorted prices created by the island's property bubble.
Cyprus has also ruled to keep its Property Transfer Fees at 50 per cent. The temporary reduction to the charge was originally set to end at the end of 2016, leading some to worry that they might miss out if their transfer did not complete by 31st December. Now, though, the government has made the discount permanent, which is good news for those aiming to buy homes in the country.
The Finance Ministry said the above arrangement aims to boost additional growth in the construction industry and attract new investments from both the domestic, and the foreign markets.
Indeed, the equivalent saving from that discount means that a title transfer on a home worth $1m would now cost around $40,000, compared to $80,000 two years ago.
The moves both arrive as Cyprus begins to show positive signs of recovery, with house prices on the island up 1.5 per cent in Q1 2016 and condo prices up 1.2 per cent, according to the RICS.
Figures from the Department of Lands and Surveys show sales rose 42 per cent in June 2016, the third month of increases in a row, with 30 per cent going to overseas buyers. Property sales to the local market rose 39 per cent year-on-year, while property sales to foreign buyers rose 49 per cent year-on-year.