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Call to reform the property tax system

George Strovolides, president of the Cyprus Property Owners’ Association , urged the government to reform the property tax system tax during the association’s annual general meeting.

THERE is still a long way to go before the property market recovers, with any movement in the sector seen as only a flash in the pan, the president of the Cyprus Property Owners’ Association George Strovolides warned this week.

Speaking at the association’s annual general meeting, Strovolides said the dramatic drop in the sector was ongoing, especially in tourist areas where prices remain 30% down compared to the previous two years.

He was clear that any activity in the property sector is only temporary and the market here depends on the economic recovery of international markets mainly Britain and Russia – the island’s main markets.

There continues to be a slump in the market and purchases by Cypriots in the tourist areas of Paphos and Protaras are only a drop in the ocean,” he said sounding the alarm that it was premature to make statements about a recovery.

Even transactions through the Land Registry may concern older sales where transfers are made at a later stage,” he added.

The Association favours the proposal to review property prices for tax purposes from 1980, provided a tax reform is in place so that the system becomes fair.

The untaxed sum of properties should be corrected since values will multiply,” Strovolides said.

He criticised the ongoing delay in issuing title deeds with 130,000 still pending and the state losing hundreds of millions in transfer fees.

The association insists on the simplification of the property tax system so that state coffers would benefit.

Strovolides argued property taxes are currently multiple and complex while a simplification of the system would boost state revenues and spark mobility in the moribund sector.

The Association is proposing a reduction in capital gains tax from 20% to 10% and higher untaxed sum, saying lower taxes would help combat tax evasion.

It also suggests the reduction of transfer fees to 3% without scales, the abolition of property tax and abolishing double taxation of rents – as income or corporation tax, and a special defence contribution.

Tax payments should also be simplified, so that property owners pay a single authority.

Call to reform the Cyprus property tax system

Readers' comments

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  • Terry says:

    Yes, taxation is an issue but we Europeans – well Northern Europeans anyway – are used to taxes and we tend to pay them. Don’t forget that Club Med is only surviving because because of the bail out from tax paying Northern Europeans who are unlikely to be able to retire until we reach 70 years.

    The collapse of the Club Med property bubble will not reverse until the obstinately minded Cypriot bankers, Lawyers and property developers bring about a volte face in their practices – quality, value for money and above all, honesty.

    Cyprus has no intrinsic value outside of tourism. It is tourism that fills the hotels and restaurants and brings potential home buyers from all over the EU – the majority of tourists continues to flow from the UK. It is the rich, Northern European financial giants of Germany, France, UK and the Nordic countries currently propping up the largesse of Club Med disaster. Russian money flowed for a while but where are they now? Certainly within the UK, we are digging in (not just because of the snow) and stashing what little cash we have left into safe pension provision albeit with low returns.

    Make no mistake, we will not return with our wheelbarrows full of hard earned £s for a long long time and even then, only when we believe that Cyprus business can be trusted. You have screwed us once, it won’t be so easy next time. Cash is, and always will be king.

  • Peter says:

    “THERE is still a long way to go before the property market recovers” says George Strovolides

    In the past many of the expats had served on the British Bases with fond memories of Cyprus. I had made several friends, ex-forces who came out here, only to find the ‘Old Cyprus’ they knew was nothing like the money grabbing, greed place it had now become. Many have already sold and returned to England.

    The current residents of the British Base reads the papers and now know the inhabitants well. How many of these will be looking for a retirement home in Sunny Cyprus when they see what has happened to the gullible Brits who brought here?

    The market will never recover to the levels once seen. The British don’t suddenly wake up one morning and say “Lets move to Cyprus”. The expat has either lived, or been here on holiday before buying, enjoyed the experience and wants to return, to make it their home. You need to ask once you have been to Cyprus what was the experience?? Good or Bad?? Would you return again or warn your friend off?….Enough said.

  • @Mickey – the figures you are looking for are published on the Department of Lands and Surveys website:

    In 2009 – 8,170 contracts of sale were deposited at the Land Registry and 11,444 transfers took place.

    To the end of November this year, 7,901 contracts have been deposited and 12,153 transfers have taken place.

  • Mickey says:

    Presumably with the drastic reduction in property sales over the past two years, the number of outstanding deeds to owners has similarly decreased?

    We should be told.

  • andyp says:

    Sorry George but you have got it all wrong. Brits are not coming back because of the Cyprus Deeds fiasco and all the property industry’s other sharp practices e.g. tax scams, lack of electricity, etc, etc, etc. Get rid of the crooks in your midst George or you will not recover.

    P.S. Brits will continue to tell everyone else about Cyprus property even at their own cost. Even the Russians are now aware according to a recent article by Antonis Loizou.

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