Latest Headlines

Christofias says no to transfer fee changes

The euphoria felt by property developers in Cyprus that the House of Representatives had agreed unanimously to abolish or reduce Property Transfer Fees for a period of six months may be short-lived as President Christofias has asked them to think again.

IN A MEMORANDUM President Christofias cites several reasons why the proposed changes to the law that would abolish and reduce Property Transfer Fees should be rejected, according to a report in today’s InBusinessNews.

The President said that the state could lose some €40 million in revenue if the property tax changes were implemented and that the property market would not benefit significantly from the proposals.

He also believes that the changes would put intense pressure on the Planning Authorities, Municipalities and Land Registries from the rush of those wishing to take advantage of the relaxation saying that it would be humanly impossible to process the workload created by tens of thousands of applications in six months.

The President also referred to the risk that cancellation agreements that have already been signed would benefit those who the changes are not intended to cover.

Finally, the President considered that although the law would apply for just six months, there is a risk that bogus contracts of sale could be submitted that would have the option of identifying the purchaser at some later date.

In light of President Christofias’ comments, the House of Representatives amended their proposals and these were passed by a majority vote by MPs earlier today. They will come into immediate effect on their publication in the Gazette and will remain in force for six months.

We will bring you further details once the changes have been published.

Readers' comments

Comments on this article are no longer being accepted.

  • Odd_Job_Bob says:

    I actually quite like my lawyer with a bit of rouge on! Keeps me distracted whilst she’s ripping me off…

    It is possible to reform the whole property purchase system from top to bottom, making it clean, clear, transparent and have all the fair and efficient rights of redress if ever there were a problem, as well as valid title deeds at point of sale (as everywhere else does).

    However, even if all the above were to happen (which it won’t due to vested interests etc etc, we all know the drill now), the simple fact is prices are just WAY too high for the product you get. Not just the build quality etc, but the cost of everything else that Cyprus has to offer compared with the quality.

    The very fact that Our Beloved Leader thinks that there will be a rush of people transferring properties to their name due to the amnesty on Transfer Fees means that either the man simply does not understand why people are not transferring (developers liabilities needing to be cleared first) or he is having a laugh. I suspect the latter.

    Many people are like those little Egyptian fisherman (in De Nile – geddit?) about what people will be willing to pay to live and own property here compared to anywhere else. The re-arranging of the deck chairs with all the legislation tinkering would be funny if the consequences weren’t going to be so tragic.

    No, wait, it’s funny anyway…

  • out of the frying pan into the fire says:

    I agree with Costas first comment.

    If the president wants to raise more money for the state, then reform all the property laws in Cyprus, have a law that bans rouge lawyers, developers, estate agents and banks from trading in any property area say for 5 years and a big fine with costs and compensation .

    That would then make Cyprus a good place to invest. Not now though.

  • Mike says:

    Peter

    As far as I understand you are correct, but so is Marcus. Land law is based on the Ottoman model as you correctly state but Marcus was referring to the system of taxation, which is a British inheritance, not the system of purchase.

    I think (and hope) that the President’s advisers have informed him that reducing the taxes payable on purchase will do little other than offer developers a further means to raise prices and profit if they sell whereas the reality is that sales will only move significantly if title is transferred at the point of sale which is what the administration really should be concentrating on. Any other sticking plaster legislation will do nothing. The cat is out of the bag world wide now so only a total numbskull or deluded individual of foreign origin would attempt a purchase.

    It is OK for us Cypriots as we have our properties or land as primary homes and productive crop areas. We generally do not sell and prefer not to pay the taxes levied as a consequence as long as we have title to the land our homes are built on title including the home is of no consequence.

    Regards

    Mike

  • Peter says:

    @ Marcus

    I have bought and owned 4 brand new houses from developers in the UK. The British tend to move home every 8-10 years on average. I got my title deeds at the same moment in time as buying. No delay. I understood that the land ownership system in Cyprus was based on the Ottoman Empire system and certainly not on the British system. There is stamp duty to pay but never heard of IPT until I came to Cyprus.

  • Costas Apacket says:

    It would appear that an amended version of the proposal to remove transfer fees for 6 months has been passed by the politicians.

    I guess this means that the rest of us waiting for our Title Deeds have just been pushed back in the queue by at least a year if this takes off.

  • @Marcus – Thanks for your comments.

    In the UK a Stamp Duty Land Tax (SDLT) is levied, but there are numerous exemptions to help first-time buyers and encourage sales in deprived areas. You can view the current rates at SDLT rates tables – quick reference.

    As for Capital Gains Tax in the UK. Capital gains resulting from the sale of primary residence are exempt. But Capital Gains tax is payable on gains made from the sale of secondary residences (such as holiday homes).

    No inheritance tax is payable on property in Cyprus. But this would not apply to UK citizens who are domiciled in the UK.

  • Marcus says:

    It is about time that the property transfer taxes were revised they are taxes that have been inherited from the British.

    The world over they have been described as the most inefficient way to raise revenue. In a lot of ways they discourage people from buying and selling.

    One cannot sell if one is not buying. I have seen situations where older members of a community desired to downsize as they no longer needed a large home as the children had moved on.

    However the thought of paying the taxes made up their mind for them. They did not sell. As they did not see somebody out there did not up grade.

    Another evil tax is the Capital Gain Tax as it also influences whether there will be a sale and a purchase.

    While we are at it lets not forget the evil inheritance taxes.

    All of the above taxes have a history relating to good old Britian.

  • Costas Apacket says:

    It almost sounds like Christofias doesn’t trust the Cypriot Developers and the tricks that they and their mates might get up to.

    Strange that!

    Also strange that I find myself, for once, agreeing with the President.

    Also strange that Christofias is worried about the State potentially losing circa €40 million in revenue, due to this proposal, when there is a mega amount of outstanding Transfer Tax due to circa 130,000 unissued Title Deeds, some of which have been outstanding for over 10 years.

    Doesn’t add up does it?

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

SELECTED REPORTS

Back to top