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Property tax bills hit obstacles

Concerns have been raised over the process by which property valuations have been assessed with the Land Registry providing “unconvincing explanations” on how these have been calculated.

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Limassol District Lands Office

THE submission of the two government bills revising property tax coefficients to next week’s plenum has come under question as yesterday’s session of the House interior committee revealed several concerns with regard to the way property revaluation to 2013 prices was made.

After the session, committee chairman Yiorgos Lamaris said that committee members also expressed reservations with regard to a bill stipulating that local authorities will be required to reduce property taxation from 0.15 per cent to 0.022 per cent, in order to take account of 2013 prices.

Until now, properties were valued at 1980 values for taxation purposes, but these were revised by the Land and Surveys department to reflect 2013 values. A land registry official told the committee that some areas saw property values revised at six times their previous value and others at 36.

“An initial view is that the process through which property prices have been revised has not been adequately substantiated,” he said. “The Land Registry and others failed to provide convincing explanations as to how it was done.”

One example of such “unconvincing explanations”, Lamaris said, relates to on-the-spot appraisals that involved reviewing only the exterior of premises.

“It is a matter of concern with regard to the number of objections to revised property values that may be received,” he explained.

The government bill provides for the exemption of properties worth up to €200,000 and lower tax rates for properties valued above this threshold.

But Yiorgos Pantelis, who attended the session representing the Finance ministry, said that despite the lower rates there may well be cases where property owners will be called to pay a higher tax than last year, due to the upward revision of prices. One example, Pantelis said, would be a property valued as an empty plot last year when in fact it was a house.

Lamaris said he has called on parties to reflect on whether they will proceed to vote on the bill next Thursday, and noted that a government bill submitted yesterday to the House Finance committee is also pending.

Committee member Yiorgos Perdikis also expressed reservations on the potential increase of local authority property taxation based on the revised valuation.

“The bill’s provisions cause justified concern that while property taxation may indeed be reduced, municipal taxes may increase,” he said.

The government’s 2013 revenues from property taxation were €100m, which is also this year’s target amount.

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Readers' comments

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  • Phil says:

    Nigel thanks I will obtain and keep readers updated.

  • @Phil on 2014/07/07 at 11:41 am – MartinG was commenting on my comment about a friend in Episkopi who was visited by the Land Registry and had her house inspected as part of the revaluation process.

    You can appeal the valuation – forms are available at the Land Registry offices.

  • Phil says:

    Nigel, is MartinG correct, are you aware of someone who has been re-assessed?

    If so would like to contact them to obtain info as to how they went about it.

    Regards

    Phil

  • Phil says:

    @MartinG You ask the question “has anyone had an official Valuer – and Valuation! – from the Land Registry or Tax Offices.

    All I saw was someone(s) with a clip board walking around our village (Kolossi) from Land registry conducting valuations so I would assume that in the eyes of the Land Registry they were official.

    Whatever qualifications, experience and more importantly how they based their values is anyone guess. However once ALL values have been announced and in the open, it will open a massive can of worms, if not already, as this will be bigger than the title deeds fiasco.

    My valuation for 1980 was €58,000 yes fifty-eight thousand. NOW 2013 AND CLEARLY PRINTED ON MY TITLE DEEDS IS €580,000 yes five hundred and eight thousand, they just added a few extra zeros.

    Bargain of the month: So here’s the deal, If anyone from the Land Registry is reading this, I have full and clean title deeds and you can have it for €470,000 yes four hundred and seventy thousand, no more no less.

    IF YOU BELIEVE THAT MY PROPERTY IS WORTH WHAT YOU SAY THEN HERE IS YOUR CHANCE TO MAKE SOME GOOD PROFIT €110000 to be precise, ANY TAKERS (I BET NOT)

    Phil

  • MartynG says:

    Mike: Drifting slightly off core subject but Yes, the whole Eurozone, still trying methinks to work to the monstrously flawed Lisbon Agreement, and ‘total integration’ – with not a snowball in Hell’s chance of success! – will pose, position, prompt, prod those like RoC who need sizeable bail-out/in funds, phase III really of ‘kicking the can down the road’, with, really only a partial eye on ‘how they do it’……..

    Working back to the core subject: yes the RoC government is trying to meet Troika requirements, moving from ‘mess’ to ‘muddle’, but, seemingly trying NOT to increase the IPT tax-take overall. I guess the outcome will be another ‘patchwork’ quilt.. We met a Cypriot businessman (a humble SME) recently who owns shares in several family properties, one he has a 1/49th share in, plus 6 olive trees. Wonder how they will work that one through!

    I’m a little pleased that Nigel knows someone who has been ‘inspected’ and presumably ‘re-assessed’. Has anyone else also be ‘done’? If not then I tend towards the Google Maps theory – and await the outcomes of this much delayed ‘exercise’, but I won’t ‘hold my breath’!

  • Stuart says:

    A nice picture of Limassol District Lands Office wherein, presumably, operate some of the best qualified land surveyors who decide whether your property is worth anything between 6 and 36 times its 1980 value depending on whether they now see a house or just a plot of land in front of them.

    With no clearly demonstrable rationale to substantiate the new valuations, it is totally predictable that everyone with a valuation greater than €200,000 will want to object to their respective assessment. This should serve to keep the pot boiling for many months to come.

    So what, indeed, do the Troika think of all this? My impression is they will again commend the Cyprus government for its fine handling of the re-valuation process and look forward to many more free trips to sunny Cyprus in the future. They are already booked well into 2016!

  • Peter Davis says:

    “Worth up to €200,000”

    Well in my village that will exclude all the Greek Cypriot living in the family houses, past down through generations.

    So the expats will be paying through the nose again.

    The Government really should understand the meaning of Direct and Indirect Discrimination, because this is what this bit of legislation is.

  • MartynG on 2014/07/05 at 8:24 am – A friend living in Episkopi was visited by someone from the Land Registry who inspected the inside and outside of the house. I don’t know how widespread this was.

    If you recall in the UK when properties were revalued for the Poll Tax/Council Tax all they did was a cursory inspection. As a local councillor at the time I successfully appealed the banding of a property downwards for someone living on my ‘patch’.

  • Mike says:

    Martyn – How true and sadly expected. There seems to be no official process or policy which seems to be undertaken in a logical, transparent, accountable and efficient manner to a standard operating model. It just all appears so haphazard and unpredictable so no wonder people become sceptical and suspicious.

    As for the Troika I don’t think they give a flying hoot as to what sovereign governments do as long as their core club is protected, expanded and eventually forms a United States of Europe with one President, one parliament and one police force. Individual states will continue to get away with anything they choose to and despite the rhetoric I don’t feel anything of any substance will be done about it except in the case of protecting the Euro.

  • MartynG says:

    The usual rag-bag, kickabout approach to important matters relating to property, registration and taxation. Will they, well IF, BUT….and so it goes on. And HOW are they assessing 2013 property values, has anyone had an official Valuer – and Valuation! – from the Land Registry or Tax Offices. No-one we know has.

    Rumours have circulated that they MAY have resorted to Google Maps in order to make (possibly) quick and dirty arms-length valuations. Who knows? Will we be told?

    What do the Troika think of all this? Hmmmm…….

    And anyway haven’t property values fallen still further over the last 15 months (since the Troika insisted on this ‘revaluation’), are they going to take this into account?

    It’s the annual Holiday season now and the Troika, presumably, want this sorted!

    Those of us owning Cyprus properties certainly do! Or DO we….really?

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