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Cyprus property values updated

Announcing the completion of the task of updating Cyprus property values as part of the island’s bailout agreement, Interior Minister commented that privately owned land in Cyprus is worth some €200 billion.

PRIVATELY owned land in Cyprus is worth some €200 billion, Interior Minister Socratis Hasikos said on Wednesday, announcing the completion of the process of updating immovable property values as part of the island’s bailout agreement.

“It appears we have private property worth a total of €200 billion,” Hasikos told reporters after a cabinet meeting. “This does not include Turkish Cypriot properties and state land.”

As part of the bailout, Cyprus had to update real estate values by mid 2014.

Until 2013, property owners were taxed based on 1980s values with many paying peanuts and others nothing at all.

Completion of the process paved the way for the Finance Ministry and the Inland Revenue department to set new, lower, Immovable Property Tax (IPT) rates.

“We have said that the tax will be lower than last year,” Hasikos said.

This was due to the fact that the updating process has added some 300,000 properties to the mix.

“This is a job that should have been done every five years; in the Republic of Cyprus it took us some 30 years to update the values and that is why people reacted,” the minister said. “It is one thing to tax a field, another to tax a (residential or commercial) plot of land, and yet another to tax the building on the plot. All this did not exist so there could not be fair taxation.”

A bill approved by cabinet on Wednesday also includes provisions concerning objections and fees to be paid when submitting an appeal.

Readers' comments

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  • @Phil on 2014/07/05 at 8:20 am – I used to have the form to be used for submitting an appeal, but I can’t find it. The Land Registry Office should have a supply. It’s been predicted that the revised valuations will result in “a storm of appeals”.

    My home has a 1980 value of €60,000 – and even if they increase that by a factor of 10 I will be paying less property tax annually than I used to pay in two months in the UK.

  • Phil says:

    Hi Mike

    I could not believe the 2013 valuation that they placed on my property. Never ever in a million years or even during the good times would my property demand such a high price. Strangely the figures imply to me that a visit to evaluate the property might have been conducted in an office by adding lots of addition zeros. Sorry that they refused to give you YOUR valuation so much for the new transparency policy.

    Nigel, I looked at the last paragraph “A bill approved by cabinet on Wednesday also includes provisions concerning objections and fees to be paid when submitting an appeal”. That tells me nothing again no transparency, do you have any knowledge of how one obtains the appeal documents against recent 2013 property valuation as that would help.

    PS Just heard the news ref IPT being reduced to 0.1 so for me that’s an 85% increase on last years IPT, so much for paying less than last year!!!!!! was never going to happen.

    Phil

  • @Mike Jennings on 2014/07/04 at 1:43 pm – If you look at the last paragraph of the article you will see that there is an appeals process contained in the bill.

  • Mike Jennings says:

    Phil, having seen your comment about your updated property value, I thought I would check my own updated value. Have just been to the Lands Department and was told that although the revaluation has been done, they are not allowed to release any figures yet.

    The 1980 values show some very strange differences in similar properties so I wonder how the new figures have been assessed. Your increase from €58,000 to €580,000 seems an excessive rise. Not sure whether there will be an appeals process but I can see there will be a lot of argument once the figures are finally revealed.

  • Phil says:

    So lets see if I have got this correct. My understanding is that because they have found, I assume hidden away is towns and villages approx 300,000 properties not registered) but are now, paved the way for the lowering of IPT rates and that the IPT this year will be lower than last year.

    OK so far so good but now this is where it gets a little confusing. I paid IPT of approx €325 (and that was with the 10% discount) on a valuation of €58,000 last year based on 1980 values. However my new valuation for 2013 as recorded on my title deeds is €580,000 and as we all know IPT is based on Valuation as a percentage.

    According to Mr Hasikos my IPT payment this year will be lower than last year.

    My IPT % rate would need to be a simple 0.055 or less for my IPT payment to be lower than last year. I think the current rate is between 0.6 to 0.8% so a massive rate reduction can be expected!!!!!!!!!!!. “Oh ya really”

    Phil

    I wait with bated breath

  • Whirlybird Rtd says:

    I am at a loss here what with the government updating this, new rules coming out for that, no straight answers regarding title deeds, with developers either not trading or going bankrupt and us not able to pay our IPT because the tax office is not allowed to accept our cash.

    This will result in us all receiving large bill at sometime in the future. Does the government have an agenda of some sort regarding allowing people to own their own piece of property? or are they that incompetent? or perhaps other forces are dictating to them. Shhhhhh!!

  • kufrahdog says:

    300,000 previously unregistered properties in a country of approximately 850,000 people! Words like ‘incompetence’ and ‘corruption’ come to mind. Evidence, perhaps, that the planning, building and land authorities etc have been earning their pay under false pretences?

    Of this total, one wonders: How many are illegal and to what degree? And how many have been purchased by buyers who are unable to acquire the title deeds for one reason or another?

    This is yet further evidence that the Cypriot national system for the control and management of property is dysfunctional and not fit for purpose. The entire system should undergo root and branch business process re-engineering under the supervision of an international (external) organisation. KD.

  • Andrew says:

    I know these concrete boxes seem to spring up overnight but to discover 300,000 new properties should cause some embarrassment, somewhere.

    With a population of 840,000 and an average household size of 2.7 this equates to about 1 extra property per household.

    Maybe they have been using some sort of Trekkie cloaking device.

  • Stuart says:

    @Nigel.
    You may recall back in 1954, ‘The Voice of Hesikos’ was all about a lost planet. Now, 60 years later, the voice of ‘Hasikos’ is all about lost revenue!

  • Mike says:

    @Nigel – It would appear the myth of “Cyprus has one of the best Land Registries in the world” is, as you suggest, now shown to be as hollow as many of the other self serving myths and self praising rhetoric is. It seems we are past masters at fooling most of the people most, if not all, of the time and only now, when ordered to do so, do we go through the motions of compliance. I will still wait to be convinced that we do drag ourselves into 21st century ethics and accountability in public service as history indicates the contrary despite any codes of practice in place.

    Adding 300,000 properties on an Island this size is a terrible admission to be forced to make and really needs addressing.

    Keep up the good work and thank you for your unrelenting service.

  • @ILL Eagle.l – Property Transfer Fees are based on a property’s market value on it’s date of purchase and are the local equivalent of the Stamp Duty Land Tax (SDLT) that you pay in the UK when buying a property. A property’s current market value is irrelevant.

    However, Property Transfer Fees in Cyprus are significantly higher than their UK equivalent and the Land Registry has been known to value a property at significantly more than its purchase price (but you can contest their valuation all the way to the Supreme Court).

    As for Immovable Property Tax, you may or may not be liable to reimburse your developer the amount he has paid in relation to the property you purchased – you’ll need to check your sale agreement. If you are obliged to pay the developer you will be able to submit a claim for any legitimate overpayments, providing you follow the advice in my article at Refunding developers’ Immovable Property Tax. You will be able to submit a claim to recover all of the IPT paid for years up to and including 2012 – and most of the IPT for 2013. It’s a crazy system I admit, but if the developer refuses to provide you with information you need to reclaim any overpayment – you should refuse to pay him until he does.

    What amazes me is the 300,000 properties that have been ‘uncovered’. Oxford city only has 55,400 households – so were looking at a city nearly five and half times the size of Oxford that has gone undetected. The myth that Cyprus has one of the best Land Registries in the world has been well and truly exploded!

  • ILL Eagle.l says:

    Those of us who have yet to get title deeds, and pay huge transfer taxes which now bear no relation to reality, and probably never will do, and will also be required to pay backdated IPT for many years, when most of the properties in Cyprus were paying nothing, will be yet again fleeced by this corrupt system.

    It is a disgrace! And Hasikos crows on about the irrelevant and completely academic valuation of 200 billion euros for property in Cyprus…

  • @Victoria – No announcement has been made, we’ll have to wait to see.

  • Victoria says:

    How will we be informed of our new updated property valuations? Will our title deeds need updating?
    Does anyone know about this?

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