What’s Behind the New Tax Allowances?
The reform introduces several tax allowances, particularly for home insurance, energy-efficiency improvements, and housing loan interests. Each of these allowances is underpinned by strategic policy shifts aiming to foster personal responsibility and resilience in the housing sector.
Why Prioritise Home Insurance?
Natural disasters have increasingly plagued Cyprus, revealing glaring underinsurance in both urban and rural settings. Recent disasters emphasised that many homeowners were inadequately covered, leading to complex compensation issues. The new tax allowance on home insurance is thus a nudge towards ensuring better coverage. It signals a possible future where compensation for uninsured properties might no longer be state-funded.
What About Home Energy-Efficiency?
Cyprus is currently lagging behind the EU in residential energy efficiency, with a paltry 5% of homes having been upgraded in recent years. The tax incentives for energy-efficiency improvements are targeted at modernising the aging housing stock. Beyond aesthetic refurbishments, these upgrades aim to lower energy consumption, contributing to long-term environmental sustainability and reducing household costs.
How Does the Reform Address Housing Loans?
Interest on loans for new homes is also included in this reform. By rewarding tax relief solely on loans in good standing, the reform incentivises fiscal responsibility. The allowance, which can reach up to €2,000 per spouse, acts as a buffer, supporting individuals in obtaining their primary residence and emphasising regular loan repayments.
What Messages Are Embedded in the Reform?
This reform is, at its core, a call to action: insure your homes, upgrade your dwellings, and maintain loan standing. Each measure encourages Cypriots towards financial responsibility, risk mitigation, and a sustainable housing environment.
While these incentives are beneficial, they also craft a narrative of increased personal accountability in financial planning. It’s about safeguarding one’s assets, enhancing living standards, and sustaining personal and national economic stability.
Curious about how these changes impact your financial strategy? Contact Christos Makrides and Associates Ltd. at contact@makridestaxconsultants.com. For more insights and updates, subscribe to our newsletter. Let’s explore how these reforms can be aligned with your financial goals.
