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Cyprus real estate agents criticize state

The real estate agents have criticized strongly the state for the latest increase in the price of properties, since they believe that it is receives not a negligible sum from the value of sale. “A study revealed recently that 30% of the value of properties go to the state funds. The only way out is […]

The real estate agents have criticized strongly the state for the latest increase in the price of properties, since they believe that it is receives not a negligible sum from the value of sale.

“A study revealed recently that 30% of the value of properties go to the state funds. The only way out is to abolish the transfer duties for plots and cut the capital gains tax from 20% to 10%. These measures will moderate the sum that ends up at the state funds by 8%-12%”, Vice Chairman of the Real Estate Agents Association, Solomon Kourouklides told StockWatch.

Taxation

According to Mr. Kourouklides, the imposition of taxes during the procedure is as follows:

  • Transfer duties paid at the sale of the property, which is 3% for a value of up to £50 thousand and 5% between £50 thousand and £100 thousand.
  • The capital gains tax imposed on the profits of the property sellers, which stands at 20%.
  • VAT of 15% on material and labour costs.
  • VAT of 15% at the sale of the house, unless this is the first residence. In that case, the government returns 10% of the VAT.

Solutions

The property price hikes is the major issue of discussion of the House Commerce Committee in the past two weeks. According to the Committee, the increase in the price and value of properties is linked to the high demand and the low offer. In the next few sessions, the MPs will deal with all the aspects of the issue.

© 2006 Stockwatch Ltd

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