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 percent or 20 percent, depending on monthly rental rates.

Residential rents of up to 300 euros ($411) will be cut by 15 percent. On rents above that, the reduction will be 20 percent, but with a ceiling of 120 euros.

On commercial properties of up to 600 euros a month, there will be a 15 percent reduction. For properties in the range of 600-2,000 euros, there will be a 20 percent decrease, but capped at 250 euros, and a similar percentage for more than 2,000 euros, capped at 400 euros.

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 percent 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 percent fine and 4.75 percent annual pro-rated interest penalty.

In March, the nearly bankrupt government obtained a 10-billion-euro 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 percent this year and by 3.9 percent in 2014. Unemployment has soared to a record 17 percent as businesses have cut back on staffing levels or even gone under

Reuters

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