EARLIER today, the Memorandum of Understanding between Cyprus and the Troika came into the public domain. The complete 29 page document, which includes the timetable and target dates for implementing the measures, can be viewed by clicking here.
Here is an abridged summary of the key points relating to property regulation and taxation:
Provide for mandatory registration of sales contracts for immovable property.
Eliminate the title deed issuance backlog to less than 2,000 cases of immovable property sales contracts with title deed issuance pending for more than one year.
Publish quarterly progress reviews of the issuance of building and planning permits, certificates, and title deeds, as well as title deed transfers and related mortgage operations throughout the duration of the programme.
Implement electronic access to the registries of title deeds, mortgages, sales contracts and cadastre for the financial sector and government services.
Introduce legislation on amending the procedure on the forced sale of mortgaged property to allow for private auctions as under the rules for immovable property recovery under bankruptcy regulations.
Better target the rules of court to improve the pace of court case handling. The authorities shall assess the need for additional measures – including if necessary legislative reforms – to eliminate court backlogs by end of the programme.
Provide for specialized judges akin to the rules for criminal case handling in order to expedite the handling of cases under commercial and immovable property laws.
Implement a property price index that establishes the average property market valuation in 2013 by square meter of habitable surface and land plot.
Implement the recurrent immovable property tax based on imputed market valuations of land plots according to a unit tax base established by this property index.
Establish the legal basis for a mandatory annual adjustment of the property unit tax base by a competent executive authority.
Provide for an extension of the reduction in property transaction fees until 2016.
Property pledged as collateral can be seized within a maximum time-span of 1.5 years from the initiation of legal or administrative proceedings. In the case of primary residences, this time-span could be extended to 2 years.
Ensure additional revenues from property taxation by: (i) updating the 1980’s prices by applying the CPI index over 1980 to 2012; and (ii) amending tax rates for the value bands. The new rates, which will apply to the updated values, are as follows:
For values of EUR 0 – 150,000 coefficient of 0‰
For values of EUR 150,001 – 500,000 coefficient of 6‰
For values of EUR 500,001 – 1,000,000 coefficient of 8‰
For values of EUR 1,000,001 and above coefficient of 10‰
Memorandum of Understanding on Specific Economic Policy Conditionality between Cyprus and Troika