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Title deed transfers on steroids

There has been a noticeable increase in the number of Title Deed transfers carried out by Land Registry Offices throughout Cyprus since the start of the year.

ALTHOUGH the provisions of the ‘town planning amnesty’ bills have yet to be implemented, there has been a noticeable increase in the rate at which Title Deeds are being issued and transferred by the Land Registry Offices throughout Cyprus.

The reasons behind this increase are unclear, but it is obviously good news for property buyers, many of whom have been  waiting for their Title Deeds for several years. It is also good news for the government, if you assume that each transfer brings an average €8,000 into the state’s coffers.

Source: Department of Lands and Surveys

(The dip in the number of transfers completed in April is probably due to the Easter holiday at the start of the month).

Excessive property transfer fees

However, as we have reported on a number of occasions, many people find themselves being asked to pay excessive Property Transfer Fees for the privilege of owning their home.

The Land Registry Offices are required by law to calculate Property Transfer Fees based on the property’s market value on its date of sale and will usually accept the sales price quoted in the contract, but not always. It will check the contract price (known as the declared price) against records it maintains of prices for similar properties in the same area sold at the same time.

If you paid €150,000 for a property and the Land Registry records show that similar properties in the same area were selling for €175,000, it will base the Property Transfer Fees payable on €175,000 (this is known as the accepted price).

Shockingly, the Land Registry is under no obligation to provide a written report on how it has calculated this ‘accepted price’ which is always higher than the ‘declared price’; never lower.

This situation has arisen because ‘a good percentage’ of individuals under-declare the sales price in efforts to reduce the vendor’s Capital Gains Tax liability and the purchaser’s Property Transfer Fees.

To give you some idea of how much alleged ‘fiddling’ goes on, so far this year 4,897 property transfers have taken place. These properties had a total declared price of €750,071,483.52, which the Land Registries uplifted to an accepted price of €806,491,914.39; an increase of 7.5%.

If you are caught in this situation, what can you do?

The first thing you should do is argue your case. This proved successful for a couple dealing with the Limassol Land Registry Office.

If that fails, you can obtain an independent valuation of your property and apply to the Supreme Court to contest the Land Registry’s valuation within 40 days of the Land Registry’s assessment. To strengthen your case it’s probably best if you obtain two or three independent valuations.

If you want to know what your property Transfer Fees could possibly be, the Department of Lands and Surveys has a handy on-line Property Transfer Fee Calculator.

Readers' comments

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  • dimitri says:

    @Mike, I have to agree it seems to be the norm, and the honest persons pick up the pieces….

  • John Swift says:

    Amazing what the EU can do, Issues like this and taxis not using metres should be directed at the EU you’ll get nowhere locally but the threat of EU sanctions/penalties is another matter.

  • Mike says:

    Gentlemen

    I must be the only individual to agree with Land Registry on this one. I’m afraid we are suffering the effects of years & years of individuals defrauding the state, in collusion with lawyers, of billions in unpaid taxes because black money was handed over to vendors in addition to the reduced price stated on the sales contract. It is still happening today in much bigger amounts.

    If the state was resourced and permitted to investigate the movement of money from one account to another then some of this fraud would be picked up & addressed, as it is they do what any of us would do given the lack of resource but sadly the consequence is that some honest individuals are charged more than they should be. Blame those who have gone before you not the state because we are all part of the state and anyone who has perpetrated this fraud in the past has in fact defrauded us all.

  • @dimitri – No this isn’t something new. Property Transfer Fees are calculated on the market value of a property on the date of sale – when the contract is deposited at the Land Registry.

    If the buyer’s lawyer ‘forgot’ to deposit the contract, as well as the contract, the buyers has to produce receipts so that the Land Registry can confirm the purchase date and calculate the Property Transfer Fees accordingly.

    Incidentally, under the new Specific Performance law which is coming into effect at the end of next month, the onus is placed on the vendor to deposit the contract of sale – and the time in which this can be done is extended to six months.

  • dimitri says:

    Is this something new? “The Land Registry Offices are required by law to calculate Property Transfer Fees based on the property’s market value on its date of sale”. I thought transfer fees were based on the current value of a property?

  • Andrew says:

    Wow at that rate it will only take about ten years to clear the 130,000 backlog. That is if no one else buys a property in Cyprus.

    I see the cunning 7.5% hike in transfer fees is just about as far as they can push it before people would seriously consider paying for 3 independent valuations. Small mercy eh!

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