The Cyprus Property Developers Association (CPDA) has appealed to the government to reconsider the proposed tax reform, which focuses on incentivizing eco-friendly investments in residential real estate. Instead of the proposed €1,000 tax exemption for each spouse or partner, the CPDA proposes introducing direct government subsidies, which the organization believes will ensure faster and more tangible results.
The association states that tax incentives based on income or socioeconomic criteria significantly limit participation. This, in turn, could slow down Cyprus’s achievement of the EU’s climate strategy goals . for 55″.
According to the CPDA’s proposals, the program should cover both the renovation of existing residential properties and new construction completed according to modern environmental standards. This approach will ensure equal rights for all market participants—both owners of existing properties and buyers of new one-, two- , and three-bedroom houses and apartments.
The Association’s proposal places particular emphasis on the principle of fairness and proportionality: the amount of subsidies should be based on the actual costs of green improvements, but with a reasonable ceiling. This will ensure the efficient use of budget funds and increase transparency in the distribution of public funds.
It is also emphasized that a similar system has already been successfully implemented in EU countries such as Italy, Germany, and the Netherlands, where a significant portion of the costs of improving energy efficiency is reimbursed by the state.
The CPDA initiative was submitted as part of a public consultation on a major tax reform being implemented by the Cyprus Ministry of Finance. The reform encompasses changes to income tax, special contribution for defense, capital gains tax, certification and tax collection procedures, and stamp duties.
According to the ministry, these six bills form the foundation of a fair, stable, and effective tax system. The reform is in line with the president’s election platform, takes into account the views of businesses and society, and incorporates recommendations from EU experts and research from the University of Cyprus’s Economics Center.
The aim of the changes, in addition to increasing budget revenues, is to reduce inequality, combat tax evasion, stimulate entrepreneurship, and restore public confidence in the tax system.
