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Hidden mortgages & tax bills delayed

The bills designed to rationalise Cyprus’ various property taxes and address ‘hidden mortgages’ agreed by government will not be put to a plenary meeting of the House this Thursday as planned.

hidden mortgage bill delayedTHE debate on the Cyprus property tax reform and the ‘hidden mortgages’ bills agreed by the Government has been delayed, according to media reports.

The bill to reform property tax will be referred to the House in September, after the summer recess, due to a delay in its submission by the government.

The Tax Department disagrees with the delay as it needs four months to collect the tax, according to the Taxation Superintendent Yiannakis Lazarou.

The Union of Municipalities and Communities asked for bill to be submitted to the coming House plenary otherwise it will be forced to issue taxes demands based on 1980 prices. The Union also asked to collect the taxes themselves.

The General Manager of the Interior Ministry Costas Nicolaides said that if the Municipalities sent out tax demands based on 1980 values, 30% of immovable property would not be taxed.

We understand that submission of the ‘hidden mortgages’ bill to the House plenary has also been delayed by the House Finance Committee.

However, the bill on reducing Property Transfer Fees 50% by the end of 2016 will be placed before the plenary on Thursday. The bill proposes an extension to the reduction in transfer fees that was introduced in December 2011 until the end of 2016 – and extending the scope of the reductions to transactions agreed before December 2011 and resale property transactions.

The bills are aimed at modernising and reforming Cyprus’ tax framework and provide for the imposition of a single tax rate, the abolition of municipal and community fees, a reduction in Property Transfer Fees by 50% by the end of 2016, the setting of property tax 0.1% and the transfer of responsibility for their setting and collection from the tax department.

Readers' comments

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  • houlou says:

    @Who Gives , you just wait until next year when ananstassiades and Mustapha ‘sort’ out the Cyprus problem, that’s when the real fun will start……

  • Who Gives says:

    @ Houlou fully agree but do not need to book holiday to Disneyland as already here. Cyprus is Micky Mouse Island for sure always punching above it weight that at the end of the day “Who Gives”

  • houlou says:

    @Steve, I thought TROIKA were happy with the efforts that have been made thus far..or is it just the state leading us to believe this is the case?

    As for all the cheer by finance minister over Cyprus being eligible for the European QE….there are good points made in the article below, and this caught my eye

    “Guess what happens when uncompetitive countries get money for nothing? Their governments declare victory and retreat. In Europe’s low- to nil-growth Mediterranean flank, where the sun shines on the backs of a lost generation of unemployed youth, economic reform has moved forward with all the alacrity of a lobotomized sloth. It’s like owning a house with a big, fat, expensive mortgage on it. You work like hell to pay it off. But when the rates drop to almost nothing, the pressure is off and you book a holiday to Disney World.”

    The voodoo economics of Europe’s quantitative easing policy

  • mike says:

    Why oh why am I not surprised. Kleptocracy is indeed the word which best describes the governance.

  • houlou says:

    Sad how it has changed for the worse in Cyprus since the early 80’s when the main focus was Cyprus recovery after the 1974 invasion, a shame great shame…

  • I think a word that ideally describes the situation in Cyprus (and in Greece to a much greater extent) is ‘kleptocracy’.

    A term applied to a government seen as having a particularly severe and systemic problem with officials or a ruling class (such as bankers, property developers, lawyers and politicians) taking advantage of corruption to extend their personal wealth and political power. Typically this system involves the embezzlement of state funds at the expense of the wider population, sometimes without even the pretense of honest service. Savvas Vergas is a shining example of a kleptocrat.

  • houlou says:

    @who gives, yup true and sort of sickens me when I argue the point fro trapped buyers, and you have people sticking up for the banks instead….whole issue was collusion between developers banks and the state (and odd lawyer) hmm who lets say turned a blind eye…basically you had a sales agreement visited local tax office to register your intent of purchase and have the sales agreement stamped by them…they give you some sort of receipt that registers the sale, you coughed up nearly 100cyp at the time to the tax office..and basically for what…no checks are done….nobody subsequently checked that the developer either registered the gains as shown on the sales agreement, nobody at the land registry was inclined to check and warn you that this bod has outstanding debts on the property (ok I know its a lawyers job) ….

  • Who Gives says:

    @U Boat you are spot on there is an old saying a Leopard Never Changes It Spots which applies 100% to the Cyprus Governance. The former President was blamed for the collapse of the Cyprus empire but in reality it has been heading South ever since they joined the EU. In the early 80s Cyprus was a good place to live but today different story with a large population from the eastern block which has not helped the dire situation.

  • Steve says:

    I am concerned to see that this piece of news is being viewed solely with regard to its relevance to some of the property issues. This obsession is dangerous because there are equally serious issues relevant here that are being ignored. Cyprus spent money it did not have and forced the economy into a bailout from the IMF, the ECB and the EU.

    Their representatives, the Troika, looked at the situation and came to the conclusion that unless the financial deficiencies were addressed, Cyprus would never be in a position to repay and like a prodigal son in the EU family, they would go on spending and borrowing, but never paying back.

    The Troika set down a list of changes – sale of state assets, reform of property taxes, reform of the banking system, particularly with respect to non-performing loans and mortgages, reduction of pensions, cuts in the Civil Service – and the politicians of Cyprus agreed. They agreed, but very little progress has been made on implementation and then only when the Troika threatens to withhold further tranches of the bale out. Now the implementation is to be delayed again.

    There are parallels here with Greece and down the line there could be queues in Cyprus outside the ATM’s for €60 a day when the Germans get tired of financially supporting undisciplined Eurogroup members, who cannot be trusted to keep agreements. Maybe the German people should have a referendum on whether to support countries who just want the money and none of the consequences.

  • UBoat says:

    We see the saga continue on its merry way with not a care in the world for the innocent buyer who has paid in full years ago.

    Looks like the heap of deceit under that carpet is getting bigger again.

    Next you will see a cooy of the Greek situation and the banks will close to stall for more time.

    Sorry to say I have grown to despise Cyprus and some of its people because of all this.

    I truly wish I had invested my money some where else years ago.

  • houlou says:

    @Pete, ‘my source'(sorry I keep mentioning this) did tell me from day 1 when the proposed bill was mentioned, that the bill would be put to the vote in Oct as no time to discuss was available…Mr. Mavrides MP told me that we would know more by this coming Thursday, which alas doesn’t apply. Seems that Papadopoulos Votsis & co….want to water down the bill, and they will be fighting the corner of the banks I am 100% sure…..just a shame that Hasikos who was so absolute and clear in his statements over the last two months regarding trapped buyers and the mortgages being a problem of the banks and their irresponsible lending…..seems powerless…and the summer break also gives banks time to get their books in order and show the central bank of Cyprus, what kind of hit they should! rightly take after the burden is lifted off innocent buyers shoulders and placed on the shoulders of the buyers they are keeping hostage!

    Its beyond belief how anyone apart from the banks and those who have vested interests in the banks, can argue against this bill that frees buyers from a.hidden developer mortgages
    b.state memos on developers land…
    ..clear as day that
    a.bank should go after developer and force buyers into a corner instead
    b.state go after developers, again as they owe, and not keep buyers trapped due to these debts

    But this is Cyprus….no cert of final approval you are illegally occupying house, yet local council taxes you everything from rubbish collection to street lighting for living in this illegal construction. greeeeat

  • Who Gives says:

    @Houlou should be no surprise at all would have bet my house on this key issue that will keep going on without any real closure for the establishment to protect their friends

  • Pete says:

    Why am I never surprised when politicians delay or prevaricate? I’m inclined to agree with houlou who says it just gives ‘them’ more time to work out how best to screw the rest of us.

  • houlou says:

    Not good, gives ‘them’ more time negotiate with developer/bankers buddies by the poolside on how to continue and justify making trapped buyers suffer…..thanks again MP’s…..long live capitalism and the support of the banks.

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