A dispute has reportedly arisen between the government and the International Monetary Fund (IMF) over a proposal to introduce a ‘Secondary Property Tax’ in the 2027 budget proposals.
The IMF has proposed that this property tax be introduced in this year’s budget targeting additional or second residential properties. However, the government is of the opinion that such a tax is not necessary since other government revenue targets have already been met.
The IMF has proposed a tax on second and subsequent homes owned by individuals to increase government revenue under the Extended Fund Facility (EFF) program, which will be implemented from 2023. However, the government has informed the IMF that there will be no need to introduce this tax as the revenue sources to be proposed for the 2027 budget are sufficient to meet the required targets.
However, it is reported that the IMF is likely to continue to exert strong pressure to introduce this tax. According to the initial agreement reached in 2023, a public property tax was to be imposed across the island by 2025.