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

Property values call for transparency

THE CYPRUS Technical Chamber (ETEK) has demanded the Land Registry publish the criteria they have used to determine immovable property values for taxation purposes.

The chamber’s chairman Stelios Achniotis argued on state radio on Wednesday that the state was obliged to provide transparency to the public and that all data used by the Land Registry in reappraising immovable property, adjusting them to 2013 prices, should be made public.

“It is a fundamental right of citizens, and a fundamental obligation by the state,” he said. “We cannot fathom an appraisal methodology based on specific criteria and hard data that is selectively available to government officials or others.”

In an earlier statement, the chamber said that such disclosure would facilitate the application of immovable property tax (IPT) as it would allow citizens to be better informed and understand the appraisal method.

“Educating the public will directly result in fewer objections to the bare minimum, which will in turn help the Land Registry deal with objections more effectively,” ETEK said.

Daily Phileleftheros reported on Wednesday that several property owners from rural areas complained that the appeals process against the Land Registry’s appraisal of their properties would prove too costly as it requires an independent appraisal by a private-sector professional. The cost for appraising properties far from large cities ranges from €200 to €350, as transportation costs are also included, the paper said.

Achniotis said he was not sure why the government was reluctant to release detailed information, but balked at the suggestion that inconsistent methodology may have been followed.

“It is a fair assumption that at least some basic criteria were consistently employed,” he said. “Randomness is not acceptable by anyone. We cannot accept that this work has been done at random.”

Meanwhile, Interior Minister Socratis Hasikos offered a response to questions over the IPT placed on a plot of land owned by First Lady Andri Anastasiades which had been raised by AKEL MP Irene Charalambidou.

Charalambidou had noted that a plot of land bought by the First Lady from the Archbishopric earlier this year was appraised twice by the Land Registry in the space of just a few months, with the second appraisal producing a 15 per cent lower value. The MP’s questions implied that different appraisal criteria may have been applied in the updating exercise completed last month, which adjusted property prices in Cyprus to 2013 values.

Hasikos presented a letter of response from the Land Registry’s acting head Kyriacos Tsolakis, which argued that the second appraisal was made in March 2014 to determine the plot’s market value for the purpose of selling it, while the first one was carried out to determine the 2013 value for taxation purposes.

According to the acting Land Registry boss, “this particular property is adjacent to an electricity plant and is particularly large.” These factors, he added, were considered when appraising the plot’s market value and justified a 15 per cent reduction in the appraised value, but were not considered for the purposes of the general appraisal.

Additionally, Tsolakis argued, “it has been established that property values have decreased by approximately 15 per cent since the start of 2013, following the Eurogroup decision in March 2013,” a fact also reflected in the second appraisal in March 2014.

But Charalambidou was quick to question this reasoning, arguing that the 15 per cent drop in property values since 2013 should have been applied to all properties so that citizens are taxed on true market property values.

“Why did the Land Registry not consider this 15 per cent drop in market value, cited by the acting director of the Land Registry, for the purposes of taxing immovable property, so that appraisals approach real market values?” she asked.

“Why will citizens be asked to pay IPT on the basis of inflated pre-haircut prices?”