Latest Headlines

Unpaid Immovable Property Tax from 32 developers

Politis, the Greek language newspaper, has listed the names of thirty two property developers who failed to pay their Immovable Property Tax to the Inland Revenue by the due date of 15th November.

immovable property taxALTHOUGH the vast majority of property owners paid their Immovable Property Tax (IPT) before the 15th November deadline, thereby enabling the government to achieve its property taxation revenue target agreed with the troika, a number did not.

Yesterday the Inland Revenue Department presented a list to parliament containing the names and details of individuals and companies who failed to pay by the due date and who owe more than €100,000 Immovable Property Tax.

The list contained a number of property development companies, many of whom had strongly protested against the tax because of bureaucratic delays resulting in an unacceptable delay in issuing Title Deeds.

The Greek language newspaper ‘Politis’ named and shamed these property developers on this morning’s front page  together with the tax they owed at 30th November plus the interest charged plus the 10% penalty for delay imposed by the Inland Revenue.

Company Name
Tax Owed (€€)
Maximos Holdings Ltd111,517.67
Kouroushi Bros Ltd112,861.68
Astarti Development Plc116,997.76
Christakis Giovanis Κ Σια Κατασ Λτδ120,071.09
Hjisoteriou Nicolaou Tour Eltd123,450.17
Polynikis Tourist Enterpr Ltd125,954.17
Finance Ministry in disagreement with Chacholis Ltd126,051.81
Christoforos Karayiannas & Son Ltd127,938.84
K Onisiphorou Construction Devel129,783.34
D.N.P. Enterprises Ltd133,266.00
Cyproperties Constructions Limited143,468.00
Heathrow Estates Ltd146,011.72
I.C.E. Developers Ltd149,765.98
Κυπριακοσ Οργανισμοσ Αθλητισμου178,366.29
Ergoliptiki Eteria Andrea Georg190,351.64
Chris Karaolis Contr-Developers Ltd191,480.46
Paschalis Holdings Construction Ltd213,285.44
Ioannou & Paraskevaides Ltd240,047.86
J Aristodemou Ideal Homes Ltd243,702.48
A. Chacholis Developers Ltd246,576.99
Karma Estates Limited246,944.90
A. Tsokkos Hotels Public Limited289,399.73
Venus Rock Estates Ltd314,735.49
Orphanides Public Company Limited (in liquidation)355,460.19
Aqua Sol Hotels Public Company Ltd388,764.55
Kleanthis Savva Developers Limited401,748.44
Giovani Developers Ltd420,852.31
Alpha Panareti Limited437,532.43
Cyprus Land Development Corporation446,166.04
Lanitis Development Ltd483,192.39
Pafilia Property Developers Limited1,243,288.11
Aristo Developers Limited2,376,356.10
Total:10,575,390.07

From what I can gather from the report, the Inland Revenue plans to seek judgements against these developers in the courts. If successful, they will be able to place ‘memos’ corresponding to the debts against property registered in their names. This will (of course) further delay the issue of Title Deeds to properties’ rightful owners.

Readers' comments

Comments on this article are no longer being accepted.

  • @GermanSixth – Yes, if a developer collapses all the company assets can, in theory, be liquidated including homes that people have bought and paid for. No-one is 100% safe until title to the property is registered in their name.

    Please refer to the comment by a former banker at
    http://www.news.cyprus-property-buyers.com/2013/12/13/cyprus-property-news-review-2013/id=0016365#comment-11084

    The Cyprus government introduced legislation in 2011 to ease the problem – see New specific performance law increases safeguards but it only applied to new sales and was not retrospective.

  • GermanSixth says:

    @Nigel
    (cit.):
    “And I’ve heard from people at the eastern end of the island that the banks are slapping ‘memos’ for unpaid mortgages on all developments registered to the developer – including those that are not mortgaged.”

    This is an interesting question. If a bankrupt developer owes money to a bank, the bank will try a liquidation process on all assets/securities available from the developer. Does this include even sold property that is still registered to the developer??

    We could read a statement: “once the contract of sale is deposited at the Land Registry, the seller is prevented from selling the land to another interested party. ”

    In my opinion, this excludes sold property from any repossession process. Otherwise, the statement would be worthless.

  • Costas Apacket says:

    Perhaps the IRD should compile another list showing which of those Developers on the above list have been fraudulently taking IPT payments from their clients and not passing these on to the IRD?

    Surely, even in Cyprus, this is a criminal act?

  • Stuart says:

    Mike rightly supposes that these developers will find a way around the impending legal consequences of their dishonest behaviour.

    After all, at least one on the list has a company lawyer with a criminal record that we are all well aware of since she was jailed in 2008 and fined by the Cyprus Bar Association in 2012.

  • Mike says:

    I assume if push comes to shove all the limited companies will close down on a Friday night and start up again on a Monday morning as so and so Cy Ltd. Once of course all tangible assets have been transferred into a new holding company. I wonder how many are only limited in liability to the tune of 100 one euro shares.

    I would not hold my breath in the hope of a solution to this debacle as the ‘artful ways’ have been ingrained into the psyche for millennia and will continue.

  • Steve says:

    I have said a number of times before that non-performing mortgages are not the only way for buyers to lose their property when developers don’t meet their financial commitments. It is my understanding that the Cyprus Inland Revenue is bound to call for payment of taxes and where these are not paid, then to take the necessary legal action to recover these taxes, which would be a first step on the road to loss of property for those who signed purchase agreements with the offending developers.

    Just to take the example of Aristo Developers, previous issues of Cyprus Property News have stated that there are outstanding bank loans of millions of Euros from the Bank of Cyprus that have not been the subject of any payments, even of interest, for years. Now, only two weeks ago, the bank is demanding that defaulters start making payments. Also, we see that Aristo is by amount of IPT the largest, most serious defaulter, so how long will it be before the Inland Revenue takes the legal action it is obliged to take?

    I recall seeing Aristo advertising all over this island with the proclamation in big letters “Title Deeds Guaranteed.” Around 2009, they all disappeared.

  • Peter Davis says:

    @ Deanna

    you need to see the case of Salomon v Salomon to understand how a Limited Company works. The developer and the company are two different personalities. In the case of Salomon he owned a shoe company and when the company couldn’t pay its debts and it went into liquidation, he was the first to sue his own company for money. Directors are often secured creditors, so not only do they get to keep their houses and big cars they also get paid before the unsecured creditors, ie: their clients who bought homes from them.

    Some said “he” was the company, but the law stated they were separate identities, so the developers assets are safe. That is UK law and used in Cyprus.

    http://en.wikipedia.org/wiki/Salomon_v_A_Salomon_%26_Co_Ltd

  • @Linda – unfortunately this ‘blackmail’ has been going on for as long as I can remember. I get 2 or 3 emails a day from people in this situation. (I’ve published numerous articles – search for “immovable property tax” and you’ll find quite a few!)

    These people are between a rock and a hard place. If they want to own the property their only option is to give into the developer’s demands – it’s disgusting and I sincerely hope these scumbag developers end up in prison where they belong.

    If there is a pre-existing mortgage on the land then getting the deeds will not be possible until the debt has been repaid. And I’ve heard from people at the eastern end of the island that the banks are slapping ‘memos’ for unpaid mortgages on all developments registered to the developer – including those that are not mortgaged.

    And there’s the Capital Gains Tax and Immovable Property Tax that has to be paid as before the Land Registry will transfer the property – plus sewerage tax and Municipal/Community tax.

    Once they have the deeds buyers could sue their developer – but that could take years and would it get them anywhere?

  • Deanna says:

    @Nigel. Surely there must be assets – apart from houses sold – that they could be stripped of; for instance their own houses, cars, summer residences etc etc?

  • Linda says:

    We have reports in Pegeia of developers blackmailing buyers into paying up exorbitant IPT bills before they’ll hand over title deeds. This has been going on for years, but now with the Troika, there are a lot more titles becoming available at last. We hear that many buyers just pay up rather than ask the developer for proof from Inland Revenue that they’ve paid IPT.

    We’re also getting some interesting cases emerging where buyers who applied under the Amnesty are being asked by Pegeia to pay the developer’s outstanding fees for planning, building and final completion certificates. It has been explained that once the buyer does this, the final completion certificate is issued, it goes to Land Registry who then are required to inform the developer (within 21 days I think) to hand over the deeds. Developer has 21 days to do so and if it doesn’t happen, the buyer proceeds to court, where it is fast-tracked to a hearing within 1 month. If the developer doesn’t comply with the court ruling, he goes to jail.

    I suggested to our Chief Engineer that the jails will be full but they tell me that some developers are paying up already & that a few have already gone to jail. But what happens in above scenario when there is a mortgage? Interesting times coming up over the next few months.

  • @Deanna – Unfortunately their assets include properties that people have bought but have yet to be issued with Title Deeds.

  • Deanna says:

    What’s the good of ‘judgements’ and ‘memos’: they should be sending in the Bailiffs and seizing every asset these bar-stewards possess.

  • @Gavin Jones – thank you for your comments. To answer your questions:

    Before paying any Immovable Property Tax to the vendor (be it the property developer or anyone else) the vendor has to supply the buyer with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property. Please refer to this letter from the Interior Ministry.

    If the buyer pays the vendor without having first been given the information, there is no guarantee as to how the monies will be used and furthermore – they will be unable to reclaim any legitimate overpayments of IPT from the Inland Revenue once their Title Deeds have been issued.

    Before the transfer of ownership from the vendor to the purchaser can be achieved, the vendor has to provide the Land Registry with a tax clearance certificate from the Inland Revenue confirming that the Immovable Property Tax AND Capital Gains Tax (on profits arising from the sale) relating to the property in question has been paid.

    Furthermore, the Land Registry requires confirmation that the following have been paid, where appropriate:

    Sewerage Board Tax. (Receipt obtained from the Sewerage Board).
    Town rate. (Receipt obtained from the municipality in whose boundaries the property is situated)
    Communal rate. (Receipt obtained from the community in whose boundaries the property is situated)

  • Gavin Jones says:

    Nigel Howarth.

    I would like to raise the following issues.

    If the owner of a property is just about to pay IPT to any of the developers on the list published in this article in order to obtain his title deeds, it seems more than likely that those monies will disappear into the developer’s black hole of liabilities and the title deeds would not therefore be issued. Could you confirm that this could well be the case.

    In addition, are there other charges, such as capital gains tax, that the developer needs to pay the state before those deeds can be issued?

    If the above is so, how can someone guarantee that all the proverbial ducks are in a row to ensure that their deeds will be issued BEFORE handing IPT and deed money over to the developer?

  • M R Hannah says:

    The Government of Cyprus You should be ashamed of yourselves These people should be put in Prison.
    Regards

  • Peter Davis says:

    Not a problem my developer just passed all his fines for late payment onto his victims who wanted their title deeds.

    As he said. “In Cyprus you are regarded as a poor businessman if you don’t take advantage of a situation”.

    So it’s not as though these developers will be picking up the bill.

  • Curmudgen says:

    Imagine how long the list would be if the threshold was lowered to €50,000

  • Costas Apacket says:

    Note the ‘Limited Company’ status of the majority.

    We all know what this means don’t we?

  • Fighting For Justice says:

    No surprise to see Chacholis on there. I believe it is increasingly difficult to get memos lifted to allow sales to go through.

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

  • Text size

Back to top