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Property Transfer Fees reduction permanent

In an announcement published earlier today the Cyprus Finance Ministry advised that it has lifted the temporary 50 per cent reduction in Property Transfer Fees for transfers that take place by 31st December 2016

Cyprus' Property Transfer Fee reductions permanentGOOD news for those who applied for the Title Deeds under the provisions of the ‘trapped buyers’ law and who were concerned that they would be unable to benefit from the 50 per cent reduction in their Property Transfer Fees if the transfer did not take place by 31st December 2016 – and everyone else waiting for their deeds.

Earlier today the Finance Ministry announced  that it has lifted the temporary arrangement to reduce Property Transfer Fees by 50 per cent, which was valid until 31st December 2016.

The 50 per cent reduction is now permanent; the law implementing the change, ‘Land and Surveys Department (Fees and Rights) (Amendment) (No. 2) Law’, was passed on 14th July 2016 at a plenary session of the Cyprus parliament.

In its announcement the Finance Ministry said “The above arrangement aims to boost additional growth in the construction industry and attract new investments from both the domestic, and the foreign markets.”

Readers' comments

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  • embapaphos says:

    Its for sure not fair for all those who have already paid, but on a side note thank god issues reported in the past, such as below on Nigels site can be by-passed via the trapped buyers law

    No Title Deeds unless you pay developer’s debts (update).

  • embabaphos says:

    Nigel this is the way they explained things to me

    e.g transfer fee is 1000 euros, 50% off this is 500 euros…and there is an extra 10% of the reduced amount…ie 10% off the 500 so total will be 450…

  • Louis says:

    I paid my property transfer fees in Jan 2015, does this new law mean that I’m entitled to a refund ?

    Ed: I’m afraid not.

  • KC says:

    It would be good news if only I could get as far as receiving my title deeds, mind you in fairness I have only been waiting 10 years???

    When I read the Hidden Mortgage Law I thought I had found the answer to my problem and promptly applied for my deeds only for my developer to obtain a Court Order prohibiting the transfer of the property. This left me no chance of going to Court and getting my deeds before the end of the year.

    Hopefully I will get my title deeds next year so the permanent discount on transfer fees is therefore welcome news for me, in theory at least.

    Can’t help thinking that title deeds at point of sale would be an even better way to boost growth in the construction industry.

    Ed: I agree that Title Deeds available for transfer on delivery of a property to its purchaser would help restore the tarnished reputation of Cyprus’ property sector and boost growth. I know some changes are planned to the processes involved in issuing deeds, but I don’t have any details. IMHO it would be better if they re-engineered the process from start to finish rather than twiddle with the minutia as they’ve done in the past.

    We’ve exchanged email regarding the court order and I hope your lawyers can overcome this issue.

  • Steve says:

    Hi Nigel, thanks for your comments. I am struggling with this. I have read again the article on applying for title deeds. The letter of notice I mentioned says the transfer tax will be calculated on the date of transfer. Also, the article you quoted says

    “Within the 60 day notice period the buyer may attend the DLO without the vendor being present and pay the Property Transfer Fees”

    I cannot find a reference anywhere to title deeds being sent by post. The dept of Lands & Surveys bulletin referred to in your article on how to apply mentions only appearing in person at the dept to effect transfer by paying the transfer fees there.

    Ed: Please see the section “Non-resident purchasers”. (Title Deeds are normally sent by post after the transfer fees have been paid.)

  • Steve says:

    While this is good news, are there not still pitfalls for those who are here part of the year and are applying for deeds under the trapped buyers law? The letter from the land registry published on this web site some time ago that each applicant will receive when the title deed is ready for transfer, gives the applicant 60 days to collect the deeds and pay transfer tax at the same time. Fail to do this and don’t bad things happen like loss of PTT 50% discount and an additional penalty to pay?

    Ed: I’d hardly call failure to pay the transfer fees a pitfall – non-residents should follow the advice in my article on how to apply. (Incidentally they don’t collect the deeds – they are sent in the post.)

    The applicant is given two options – they can either pay the Transfer Fees immediately and receive a 10% discount, or they can opt to pay in 12 monthly instalments. If they fail to pay the Transfer Fees, the transfer still goes ahead but an encumbrance equal to 150% of the Transfer Fees is lodged against the title.

  • Gary says:

    Great news indeed. Very welcome for owners who are trying to complete their development but were running out of time.

  • Russ says:

    What about if the VAT was paid at purchase. Is the tax still reduced to NIL?

    Ed: Please see my reply to Celia’s comment.

  • Celia says:

    Hi Nigel

    The property transfer fees (update) 28th July 2015 stated that if VAT was paid on a property, no property transfer fees were payable. Will this arrangement finish in December.

    Ed: The Land Registry announcement makes no mention of extending the temporary ‘no Property Transfer Fees’ beyond the end of the year.

    I have searched through the consolidated text of the law it only refers to:

    “Where conducting transfer declaration for which charges and fees levied on the basis of Chapter 17 of the Panel, the transfer fee charged is reduced by fifty percent (50%).”

    Chapter 17 gives the calculation as:

    “(I) For each euro up to the amount of € 85,000: three percent (3%).
    (II) For every euro in excess of € 85,000 but not in excess of € 170,000: five percent (5%).
    (III) For every euro in excess of € 170,000: of eight percent (8%).”

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