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Reduced property transfer fees (update)

The law reducing the Cyprus Property Transfer Fees for transfers that take place before 31 December 2016 has been published and will be particularly welcomed by those waiting for their deeds.

Cyprus Property Transfer FeesFURTHER details have emerged of the eagerly anticipated reduction in Property Transfer Fees, which are paid by the purchaser and become payable whenever a property in Cyprus changes hands and are the Cyprus equivalent of the Stamp Duty Land Tax (SDLT) payable in the UK.

The key features of the legislation are as follows:

For transfers that take place before the 31st December 2016:

(a) If VAT was paid on the property, no Property Transfer Fees are payable.

(b) IF VAT was not paid on the property, the Property Transfer Fees are reduced by 50%.

However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the market value of the property at its date of sale less the price stated on the contract of sale.

In addition, where a property is transferred from parent to child, Property Transfer Fees have been abolished.

Those who have or will purchase property between December 2, 2011 and December 31, 2016 will benefit from the reduced Property Transfer Fees regardless of when the transfer takes place. (Article Transfer fee abolition/reduction law published at last! refers.)

The law make no mention of a refund to those who have already paid their Property Transfer Fees.

However, in a statement he made last year, the Interior Minister was reported as saying that there was no point in putting off transferring the deeds as any reduction would have retroactive effect if it is decided and that amounts commensurate with the reduction will be returned to all impacted parties.

Further reading

Consolidated Land Registry Fees Law (Greek)

Consolidated Land Registry Fees Law (English)

Readers' comments

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  • Jane Young says:

    I also applied for my title deeds last year when Mr Hajikos came out with the idea of 50% reduction on transfer fees, he said those thinking of holding back, carry on with getting title deeds as the amount will be refunded! Mr Howarth on behalf of us all who did just that (I still have the email sent to my lawyer to halt the proceedings until the bill was passed, but we carried on after reading his words!) I ask you to write a letter to the Interior Minister asking him to honour his word! It would look better coming from you!! Many thanks

  • Brian says:

    Hi Nigel,

    I Purchased my property back in 2008 and paid in full including VAT…a year after this I was advised that providing I lived in this property as my sole residence for 10 years I could claim back the VAT and did so.

    I am advised that my title deeds should be ready soon as the land is owned by my developer and not mortgaged and the 5 Villas on the site have been divided and given separate Land Registry numbers.

    My comment is does this mean free title deeds transfer, or just 50%, my suspicion is the latter would you agree!

    Cheers Brian.

    (Editor’s comment: If you read the Consolidated Land Registry Fees Law it says that those who have paid VAT do not have to pay Property Transfer Fees providing the transfer takes place before 31st December 2016. As it says nothing about those who have reclaimed some of the VAT they paid, I assume that the transfer will be at no cost.)

  • houlou says:

    Nigel what if your are stuck waiting for a cert of final completion and therefore issuing of deeds, BUT the delay is due to the various govt depts involved, municipal admin, town planning dept etc and because of the delay you miss out on the deadline 31st Dec 2016….can you use the fact that govt depts have not moved quickly enough to claim the discount after the deadline and when your deeds are ready?

    Editor’s comment: There’s nothing in the legislation enabling you to get a discount if the Title Deed is delayed by local/central government bureaucracy.

  • Tom Barr says:

    Hi Nigel,

    Could you tell me when did Hasikos first make his announcement about the changes to the property tax?

    Like Melissa, I paid quite a substantial amount to get my title deeds in February 2014, now it would appear if I had held off I could have saved a fortune.

    And again like Melissa, I had to pay the whole amount in cash, which with all the corruption you hear of in Cyprus, just doesn’t seem correct.

    Editor’s comment: You can use the search facility to find the information you need. Check out Hasikos “property transfer fees” and you will see that a possible discount was first mentioned in July 2014.

  • Denice burnett says:

    This seems totaly unfair for the people that payed the full amount that we was asked for July 2014 do we get a refund for the amount that we paid because this is so unfair for the people that pay there bills.

  • Richard says:

    Yes it does – my apologies.

    (Editor’s comment: no problem)

  • Nick Drag says:

    Hi Nigel,

    For a long time the “rumours” coming out from the Interior Ministry is that they would offer only a 50% discount to those who purchased properties before December 2011 (since after there was a discount anyway).

    However this article is saying that those who purchased properties before Dec 2011 AND paid VAT will actually get (basically) a 100% discount. This is the only website I’ve seen this claim, while other articles only mention the 50% discount.

    How confident are you about about the first part?

    (Editor’s comment: I’ve included a link to an English translation of the law in the article. Section 10 on the second page should set your mind at rest.)

  • Richard says:

    OK – thanks Nigel. So if you bought before Dec 2 2011?

    (Editor’s comment: The answer’s in the article)

  • Gary says:

    Nigel,
    Here’s a question that I don’t expect you can answer but here goes anyway. We are in the process of trying to get Final Certificate for our development. If we achieve this by say March 2016, we would then join the ‘Title Deed’ queue (to keep things simple I won’t mention Developer Loans etc). Is the issuing of Title Deeds realistic before end of 2016 and is there anything people can do to influence this? I think the earlier posts suggested this was a short term move by parliament to get things moving. It seems grossly unfair if you get the call in Jan 2017 to come and get your deeds when you have no influence over the waiting time?

    (Editor’s reply: The Land Registry is looking to speed up the Title Deed issuance process. Once they have the Final Approval Certificate, it shouldn’t take too long. Hopefully you’ll beat the deadline.)

  • John James says:

    Nigel.
    Hi, Good Afternoon,
    We have no title deeds yet (like many others), hoping to get them once this mess is all sorted and of course prior to 31 Dec 16. Although we paid no VAT we appreciate that therefore there will be a 50% reduction in the payment on transfer. We are in a situation that we have 2 contracts (Drawn up a few days apart by the solicitor) one for the land and one for the villa build, can you confirm if we will be allowed to pay the transfer just on the land and then add the property at a later date if we wish to at a minimal cost as you stated you did for around CY£60?
    Thank you.

    (Editor’s reply: I had the deed for my land 6 years before I applied for planning permission. In your case I expect you will have to pay the Transfer Fees on the price of the land plus the price of the actual property – but I can’t be sure.)

  • Ian says:

    Nigel, This is a very useful website that helps all of us Cyprus owners to attempt to navigate the constantly shifting waters that are the Cyprus land and tax regulations. My question is if I purchased my apartment outright back in 2004, but not surprisingly still don’t have title deeds, if I am able to get the title deeds transferred before 31st December 2016 (and that’s a big if), will I potentially benefit from reduced transfer fees?

    (Editor’s reply: YES)

  • Frank says:

    “However if the Director of the Land Registry considers that the price stated on the contract of sale does not reflect the market value of the property at its date of purchase he may, at his discretion, charge the full Property Transfer Fees based on the market value of the property at its date of sale less the price stated on the contract of sale.”

    I wonder which nationalities may be the ‘victims’ of such ‘discretion’.

    Peter Davis is so right when he says: “If there is a conspiracy to defraud lets see the developer prosecuted as well. He must be a party to the scam.”

    I wonder which nationality will be the ‘beneficiary’ of this apparent largesse and amnesty.

  • Aggis Demetriou says:

    I can’t wait to see the day we have property auctions here, once the hammer falls and you buy a property cheaper or shall I say “that’s the market price”.

    How can the land registry value the property higher?

    Surely it’s a clean cut case at any court.

  • @Melissa on 2015/07/29 at 11:18 am – Currently you will not be able to recover the Property Transfer Fees you paid in 2013. But Hasikos did say last year that any reduction would be retrospective – we await developments.

    However I doubt that you’ll qualify for a rebate as you paid before Hasikos made the announcement.

  • Deanna says:

    As with earlier posters, one can see that the huge ‘elephant in the room’ with this is the Land Registry which is allowed to maintain its own rulings.

  • Melissa says:

    I paid for my title deeds in 2013, would I be able to claim any money back now?

    My property was overvalued, even though I had the bill of sale I had to pay more as the official said that he did not believe that is what I paid! Basically he was saying myself the estate agent and the solicitor had all lied! It was outrageous, so I had to pay based on an amount he decided my property was worth, and this is the best bit I could not pay by bank transfer I had to pay cash…. Only in Cyprus.

  • @Richard on 2015/07/29 at 10:20 am – If you have purchased any form of immovable property (land, dwelling retail premises, office) and you paid VAT on your purchase (if applicable) you will pay no Property Transfer Fees if the transfer takes place before 31 December 2016.

    Those who have or will purchase property between December 2, 2011 and December 31, 2016 will benefit from the reduced Property Transfer Fees regardless of when the transfer takes place.

    When a Title Deed is issued it will bear the name of the developer as its registered owner. Once you pay the Property Transfer Fees, ownership of the property will be transferred (conveyanced) to you and the Title Deed will bear your name as the property’s registered owner.

    The problems associated with the Land Registry assessing the market values considerably higher than what was actually paid are well known and I’ve published several articles – see Is a property only worth what someone will pay for it?

  • Richard says:

    Is anyone else as confused about this as I am?

    So – let me (attempt) to get this straight…

    i) You have to have purchased property before 2/12/2012?

    ii) It doesn’t apply if you paid VAT on the properties?

    iii) If the valuation of the house/apartment was different to the market value (like – er..who decides what appropriate ‘market value’ was at the time and how do they arrive at that figure)? – then the delta between such a value and contract price is liable to be assessed for tax?

    And what if your developer still holds the deeds? Are they liable or are you?

    If the Director of the Land Registry gets out of bed the wrong side one morning, or hates your developer, or it’s Tuesday and raining will this affect the perceived valuation? How will he arrive at a “fair” market valuation? Certainly the banks never did – they have already stated verbally that the banks valuation of the house was HIGHER for the purposes of issuing a loan (we still dine out on that one – like – it’s worth £200k – so we value it at £220k and then charge you whatever interest we feel like setting that’s ongoing). Excellent – that’s seems perfectly fair – not!

    Sorry to be negative – but the whole affair is like some form of bad dream from which one never seems to awaken from – and which no analyst seems to be able to unravel.

    What is wrong with issuing a SIMPLE directive that states ONCE & FOR ALL – what guidelines / liabilities / arbitration routes / timescales exist if you are:

    i) An outright purchaser – just waiting for title deeds
    ii) A purchaser with a mortgage on the property – either in the local currency or (Gold help you) in CHF
    iii) You purchased via a developer
    iv) You self built

    Does anyone in the Republic’s government or the banks actually seriously care about cleaning up this debacle? Nothing that either of them have done since 2009 seems to have demonstrated that they are. It’s constant new directives, ‘now you see it – now you don’t’ legislation bought about by the plethora of ‘lawyers’ on the island and then a bunch of actions being taken that seem to have no correlation to the actual problems.

    Even Monty Python couldn’t write this…and they were pretty imaginative!

  • houlou says:

    That’s interesting my sales agreement says e.g 130k and the land reg valuation for IPT tax purposes says 160k …..at transfer time my land reg. will charge me full transfer fee rate cos he doesn’t like the sales agreement price….absurd….

    (Editor: You will be charged Property Transfer Fees on the difference between the declared price of €130k and the Land Registry’s valuation of the property at its date of sale of €160k. So you will pay Property Transfer Fees on €30k).

  • Peter Davis says:

    It is refreshing to see that the Director of the Land Registry can charge the full price on a contract without any evidence.

    So why is only the buyer ‘hit’. If there is a conspiracy to defraud lets see the developer prosecuted as well. He must be a party to the scam.

    Also lets see the developer reported for fraudulent trading and the company for falsifying tax revenues.

    Or does the ‘old boy network’ protect the developers?

  • Russ says:

    We are now just in the process of getting our deeds. Our purchase was October 2006, will we benefit from this announcement?

    (Editor: – Yes Russ, you will benefit)

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