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

Property sales hampered by inertia and bureaucracy

THE CRASH in property sales is not only attributable to the recession, record levels of unemployment and the unresolved Title Deed problems.

A good friend – a registered estate agent in the free areas of Famagusta – has been in touch to explain that she has no shortage of willing buyers and her company’s problem is getting sales to completion.

The company currently has 28 property sales where deposits have been paid but all efforts to move 21 of these forward are being hampered by inertia and bureaucracy:

Seven of the properties have title deeds – not a problem you would think – but tax clearance by the Inland Revenue is taking weeks, (the longest is now 6 weeks) as the Tax office staff are engaged in the collection of Immovable Property Tax.

These seven sales will result in a minimum of €25,000 revenue in Property Transfer Fees for the government (assuming the Land Registry does not inflate the properties’ market values) – and this figure does not include Stamp Duty and other fees.

Five of the properties have memos lodged against them by the Inland Revenue Department. Their developers have been negotiating with the Inland Revenue for more than 18 months to reach agreement to pay an amount per property.

If the Inland Revenue and the developers can reach an agreement, the developers are willing to release the share of the land. But the Inland Revenue keeps moving the goalposts so effectively these properties are unsaleable.

Their sale would result in a further €23,000 Property Transfer Fees plus approximately €12,000 in tax revenue from the developers.

Eight properties are burdened by pre-existing developer mortgages to either Bank of Cyprus or Ex-Laiki Bank. In every one of these cases the bank has agreed that the developers owe nothing on these projects yet they refuse to issue waivers as a waiver was not issued to the first owner.

This is an absolute travesty and in the longest running case, the lawyers, developers and our office have been fighting with the bank to issue the waivers for nine months!

We have another couple who have now been waiting over 4 months who have a severely disabled son and they need the money to obtain care for him.

These sales would result in Assignment fees of minimum €7,000 plus Stamp Duties in excess of €2,000 euro.

In a further three of these sales the projects have received their Final Certificate so the Bank will have to release the properties on issuance of their Title Deeds – or will they?!?

One 12-year old property has no planning permission. The buyer is fully aware of this and the developer has been very open about their efforts to secure the permit and it will be granted soon.

The remaining seven properties are clear and should (hopefully) move to completion in a reasonable timeframe.

She concludes that “A buyer in Famagusta needs to be extremely patient!!”