- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Transfer fee discount could be win-win for all

DURING the “fat cows” era, transfer fees (i.e. fees for the transfer of title deeds) were a significant income for the State Treasury. This income has declined very much not only because of the collapse of the building industry, but also because of the “difficulties faced by the purchasers in paying the fees”, as the Ministry of Interior admits on its official site.

It is true that the “difficulties faced by the purchasers” is not the only reason for the non-transferring of title deeds. Other reasons are the existence of a mortgage against the property, the absence of a penalty in the case where there is an unreasonable delay in proceeding to the transfer and paying the fees etc. The fact remains that thousands of title deeds which have been issued in recent years as a result of the combined efforts of the Government Departments have not been transferred to the name of the purchasers. As a result the Public Treasury loses tens of millions of euros.

A generous discount on the amount of property transfer fees for those transferring the title deeds within a reasonable time from the date of their issue could be a serious motive to both sellers and purchasers to complete the transfer. At the same time it would result in the immediate flow of millions of euros into the State Treasury. The mechanism for implementing this proposal could be as follows:

  1. As soon as the new title deeds are issued, the Land Registry informs both the seller and the purchasers about this fact and that if the titles are transferred within, say, three months, there will be a discount in the transfer fees of, say, 30%.
  2. If the property is not transferred within the deadline specified and the delay is due to acts or omissions of the seller e.g. because of the existence of a mortgage, the seller will be liable to a penalty for the purpose of reimbursing the purchaser for his loss, by paying the difference between the discounted fees and the full fees, when the property is eventually transferred.

This procedure will also be available to titles which have been issued in recent years but no transfer was made so far.

This procedure will:

  1. encourage purchasers to transfer the property in their names asap in order to benefit from the discount;
  2. encourage developers to collaborate by lifting any mortgage or any other impediment in order to avoid paying the penalty and;
  3. will result in a very significant flow into the Public Treasury in a short time.

A similar measure (discount within a deadline) has been applied in the case of Immovable Property Tax during the last few months with great success.

I understand that there may exist some administrative or bureaucratic issues in applying the measure but this cannot be an excuse for not introducing it. After all it leads to a win-win situation. It goes without saying that an amendment of the Law is necessary for implementing my proposal.

Andreas D. Symeou
LL.B., M.Sc (ULA), MRICS
Property Consultant
Visiting Lecturer, Neapolis University