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Nicosia -The Cypriot parliament has passed a law requiring landlords to slash rents on residential and commercial properties in a move to ease pressures on the cash-strapped, recession-hit economy.
The measure, which takes effect November 1 and will apply for 12 months, was adopted on Thursday night and will impose reductions of 15% or 20%, depending on monthly rental rates.
Residential rents of up to €300 ($411) will be cut by 15%. On rents above that, the reduction will be 20%, but with a ceiling of €120.
On commercial properties of up to €600 a month, there will be a 15% reduction. For properties in the range of €600-2000, there will be a 20% decrease, but capped at €250, and a similar percentage for more than €2 000, capped at €400.
The law, which applies only to contracts signed prior to September 1 2012, also stipulates that reductions already agreed be taken into account when calculating the new rent.
In a separate measure, parliament also extended a 10% discount on the new immovable property tax. It had expired on Wednesday, but was extended until November 5.
Those who do not pay by then will have until November 15 to pay the full amount, after which they will be liable to a 10% fine and 4.75% annual pro-rated interest penalty.
In March, the nearly bankrupt government obtained a €10bn bailout from the so-called troika of the European Commission, European Central Bank and International Monetary Fund.
In exchange, it was forced to adopt tough austerity measures that have exacerbated the country's economic woes.
The government forecasts that GDP will contract by 8.7% this year and by 3.9% in 2014. Unemployment has soared to a record 17% as businesses have cut back on staffing levels or even gone under.
