The law on tax relief for property owners against the reduction of rents does not have the expected results so far

Закон о налоговых льготах для владельцев недвижимости Кипра не оправдал ожиданий
11 June 2020 Liza Medvetskaya
2236

The cost of rent seems to be the second cost in a row for commercial stores, after payroll. The subsidy from the government to ensure the survival of the companies that suspended their operations during the measures to deal with corona, greatly relieved the companies from the wage costs. It is accepted by the majority of those involved that the wage measure was effective.

However, for the measures related to the cost of rent, it does not seem that there is a corresponding treatment. There are reactions from businesses to the effectiveness of the bill, which is an indirect measure to reduce rental costs, which essentially provides incentives to property owners to reduce their rent in exchange for the tax credit.

Unfortunately, the legislation passed has not given sufficient incentives to property owners to temporarily reduce rents. The legislation on tax relief for property owners against the reduction of rents does not have the expected results so far and is presented below the circumstances. 

Закон о налоговых льготах для владельцев недвижимости Кипра не оправдал ожиданий

The tax relief ate is equal to half of the rent reduction, with the reduction having to range between 30% and 50% for a period of three months. The owners are not given a strong incentive to make rent reductions since the maximum tax credit reaches the amount corresponding to 25% of the rent, while there is no tax credit for any reduction of more than 50%. 

The contrast between the shops inside the malls and beyond is also remarkable. The voluntary reduction of rents made by the administrations of the shopping centers, which ranges around 50%, before the tax relief law. Unfortunately, there is no similar understanding of retail business by real estate owners outside the mall.

Source: Economytoday


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