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Building extensions amnesty slammed

Opposition parties have slammed the new measures to legalise formerly illegal building extensions announced by the cabinet yesterday claiming that they give favourable treatment to property developers.

Building extensions amnesty criticised

THE DECISION of the Cyprus government to legalise planning irregularities has come in for strong criticism by opposition parties who claim it will provide a sudden increase in building coefficients in residential, industrial and other property construction by 20 per cent or 60 sqm. until 2020.

Many of the provisions that were announced yesterday by the Cabinet do not require the approval of parliament and will impact existing and future developments.

The extensions amnesty together with the ‘hidden mortgages’ bill will help home buyers who have been unable to acquire Title Deeds to the properties they purchased because the developer exceeded the building coefficient , is unable or unwilling to settle his debts, or the transfer has been blocked because the developer owes taxes to the state.

In a written statement Aristos Damianou, a member of the Political Bureau of AKEL, said that at first sight, the big winners will be the large businesses and banks, “as they are given additional building rates and other generous incentives that will push up property values.”

EDEK considers that the amnesty must be based on an integrated planning strategy that treats business and citizens equally to avoid and favourable granting of exceptions.

“Any exceptions should be adequately justified and must be taxed as they will increase property values”, it said.

The Green party believes that permanent exceptions are given in the name of developments and asks the question who is being favoured by the amnesty.

“In an insidious way the cabinet’s decision opens a window of hope for the legalization of urban illegalities that concern hundreds of illegal small owners, while from the back door it makes scandalous planning relief permanent for a small group of large land developers”, it noted.

The June 2015 Memorandum of Understanding with the island’s troika of international lenders required the Cypriot authorities to address a number of planning-related issues:

By end-June 2015, the Cypriot authorities will submit for consultation with programme partners a report detailing the main obstacles for the title deeds issuance and recommendations on ways how to streamline these procedures during 2015, including a catalogue of tolerated deviations from building and planning permits. A further comprehensive streamlining of building, planning and title deed procedures will be proposed by the authorities following the completion of the in-depth analysis in progress.”

Readers' comments

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  • houlou says:

    @Ab, your case sounds like a pretty big overbuild, not sure this will be covered under the new amnesty…did the project get a cert of final completion?

  • Abraham Gerges says:

    Our infamous developer has submitted a plan for 4 houses then built and sold 5 houses.

    Definitely, it is not the buyer’s mistake to buy a house that had no problem whatsoever based on sale contract and documents presented!!!

    AKEL and others should put themselves in our shoes for once and ask themselves why they could not rectify this bad situation if they are really responsible MPs? The system is corrupt and it is time to clean up.

    Pass the law and penalize the developers at the same time, construction related illegalities should be treated harshly to deter others.

  • houlou says:

    @KC have similar issue…but not so many properties on my complex….@Nigel following on from Peter McGowan comments:

    If the trapped buyers law is passed, would I as a buyer be liable to pay the IPT on a property I bought that has no deeds and has no deeds as is the developers fault due to a building infringement or let me clarify there is more than one property on the plot and so the ‘property’ falls in the high tax band and according to tax office I would have to pay for 2014 at the higher rate and at deed issuing time would be able to claim back the amount extra I paid, as of yet I have failed to provide the tax people with the specifics of my purchase that is a fraction of the total project and so falls into a smaller tax band, I failed to provide them with details due to a promise of deeds end of last year, didn’t happen and then being informed planning infringement caused snag in whole process-and this was due to developer…

    Editor’s comment: I suggest that you get the property you purchased registered with the Tax Office a.s.a.p. to avoid possible complications with your tax.

  • KC says:

    Let’s just for once consider the customer, many of whom are innocent victims of property scams made possible by the inadequacies of the Cyprus property laws.

    I took possession of my house in 2005 and still await the final completion certificate because my developer took it upon himself to ignore the planning and building permits, submit false drawings and overbuild my house.

    He was able to do this because my (independent) lawyer failed to check the building ratio of the plot, nobody from the planning office checked the site during construction and on completion of the building the developer was not obliged to ask the building authorities to inspect the property and issue a final completion certificate.

    Furthermore in spite of the dimensions of the land and building being itemised in the Contract of Sale the Bank lent the developer money to build this illegal house and went on lending him money for several years. The bank had a copy of the Contract of Sale but failed to carry out due diligence.

    Needless to say the developer now has significant mortgage and income tax debts and lives in the biggest house on the estate.

    All of my neighbours are in the same position, none of us have our Final Completion Certificate and consequently we are not even on the troika radar as awaiting transfer of out title deeds. I suspect that thousands of title deeds are being held up by similar scams and this is causing serious damage to the economy. Many people don’t want to spend money on a property they don’t own or even buy a new car until they know they are going to be long term residents and with enough money left in the kitty.

    The building extensions amnesty is a step in the right direction but in many cases it will not be generous enough. The Property Department should be given the authority to assist long standing victims not helped by the amnesty, to increase the building ratio of their individual plot to remove the encumbrance with any costs and taxes added to the developers account or should I say debts.

  • Aggis Demetriou says:

    Akel and the Green Party should Shut UP!

  • Peter McGowan says:

    Hi Nigel, the politicians seem to make up rules and regulations as they go along, with little advanced strategy apparent. If they want to get the paid IPT, I suggest the following:

    Until the end of 2016, buyers will only have to pay the actual IPT unpaid by the developers. The Developers will have all the fines imposed on them for non-payment rescinded. Our developer openly admits he has paid no IPT. This way Cyprus will receive a massive income from the IPT and the exchange of Title Deeds. There are 46 apartments on my complex all in this situation.I would have to pay 692.30 euros in unpaid back IPT. The Developer’s fines of 93.40 euros would be rescinded.

    This requires a simple action by the politicians. After 2016 the Developers would have to pay the fines and the buyers would only have to pay the IPT.

    The IPT office are not interested. They just want the 1600 euros. No-one seems to have the authority to say just accept the IPT payments and or the fines. I would get my deeds, if I only had to pay the actual IPT for each year.

    Additionally, we were never told about the IPT until last year.

    Editor’s comment: If the ‘hidden mortgages bill’ is passed in September without amendments the developer’s unpaid taxes (and penalties) will not prevent you getting the deeds. Please read Who is parliament trying to protect?

  • Deanna says:

    @Steve; my thoughts also. I reckon this was done to get him off the hook.

  • Steve says:

    I have a sneaking feeling that the alleged illegalities that Mr Aristodemou was accused of are about to become legal, or at least allowed. That disturbs me.

    This amnesty is going to result in multiple planned transgressions by developers – easy to give it, difficult to take it away in 2020. That disturbs me

  • Steve R says:

    AKEL and the Green Party never seem to any further with the comments they put forward. They always make comment and that is the end of it. WHY!!!!!

  • houlou says:

    Nigel the ‘chief’ of the town and planning dept. was on the radio this a.m. trito to be precise, and answering questions, basically from today anyone who has e.g closed off a veranda/balcony, turned a covered area e.g previously garage into a room, and other – small violations- can apply to get them legalized at no cost.

    The planning license will be with them within 3 months and ultimately if the infringement was causing a hold up in getting a cert of completion, then this obstacle is removed, so is the obstacle to attaining the deeds.

    May I add she mentioned it was part of govt. pledge to troika!! When filling in the form and applying you have to supply specific plans photos etc. Nigel it will be good to see what is and is not covered under the category of small violations…..

    She mentioned that the previous amnesty failed as it involved cost for those applying….

    (Editor’s comment: Yes – it was part of the bailout agreement with the troika as I referred to in the article. I’m not in Cyprus at the moment but I will visit the Planning Office when I return and see if I can get more details of the ‘new’ amnesty and application forms.)

  • houlou says:

    I don’t know why the parties are moaning, the govt. has to look at the more frequent valuation of properties when Hasikos was asked…..obviously the 2013 prices have changed downwards, EDEK etc shouldn’t worry am sure the govt. will TAX TAX tax accordingly after revaluations…..and to be frank IF a Cyprus solution is found prices will plummit further…due to opening up of the competition from the north….then where does that leave the banks? and will the state still opt to tax properties on their perceived for tax purposes only price?

    On the other hand the perceived ‘suitability’ of a solution could push up the prices?

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