After being rebuffed by police and ignored by a senior government minister a local property support group is hoping to find justice at the highest level.
Hundreds, and possibly thousands of residents are seeking help after being duped in what they describe as a “fraudulent despicable scam” involving local property tax.
The Cyprus Property Action Group (CPAG) has written to President Christofias to demand an immediate Presidential Review into why buyers, who they say have been defrauded by developers, have been refused police assistance.
The urgent action revolves around a CPAG claim that some developers have been falsely claiming that they have paid large amounts of Immovable Property Tax (IPT) to the Inland Revenue on behalf of buyers, but in reality only tiny amounts ended up in government coffers.
“In short, developers illegally charge buyers based on a percentage of the purchase price of their property, falsely assuring buyers that this is what they paid to the Inland Revenue on their behalf,” Denis O’ Hare from CPAG told the Sunday Mail.
“In truth the developer pays much lower amounts as the tax payment is based on the 1980 value of the developer’s site. This is why none of them will produce any justification and proof of payment when challenged by the intended victims. Moreover, they use the threat of withholding title deeds if buyers don’t cough up,” he added.
Immovable Property Tax is an annual tax payable by all property owners in Cyprus, irrespective of their residence status. It’s imposed on the market value of the property and owners are exempt from tax if this value is below CY£100,000.
CPAG also stated that they had first notified the government of the situation early last year, however for many, the lack of action or interest from the authorities has left them in dire straits.
“One 83 year old lady had been waiting for 28 years for her title deeds and had a demand for €25,000 in IPT charges on a house she bought for €60,000 with her husband, who had sadly passed away two years ago, and was now also in the probate trap. Another lady in her eighties also had a similar probate problem, so the inability to leave their property to their children was a major concern until this matter could be sorted out.”
CPAG wrote an urgent letter to the Chief of Police, Iacovos Papacostas back in May explaining the situation and requesting an explanation as to why these attempted frauds were not considered a police matter.
Having failed to receive a response from the police, CPAG were forced to call in help from the British Consul, who was told by police that the IPT scam was not a criminal matter.
“The police have provided not one single argument, legal or otherwise, nor any justification whatsoever as to why, in the police’s opinion, no crime has been committed. This practice is a crime under Section 298 of the Criminal Code – Obtaining Goods (or money) under False Pretences,” a CPAG spokesman added.
Many of those affected by the IPT scam are questioning the credibility of a police force which is fighting to save its battered image after a string of high profile blunders and scandals.
CPAG say that the failure of the police to address any of their arguments left them no option but than to bring it to the direct attention of President Christofias.
To add insult to injury, last November a senior Interior Ministry official effectively told property buyers they were on their own when it comes to being scammed on IPT by unscrupulous developers.
“Immovable property tax is payable by the owner of the property, and details as to payments by the buyer to the seller, regarding this payment, should be detailed or determined in the Contract of Sale between the two parties,” said the official at the time.
“This is not a matter where the state can intervene, but if a buyer feels that any term in the contract is abusive, this can be examined by the courts in the context of a civil action filed by the buyer against the seller.”
In view of the lack of interest so far on the part of the state, property analyst Nigel Howarth agreed with CPAG’s latest action, saying the issue was a great cause of stress to thousands of expats in Cyprus.
“The effect on buyers defrauded by this scam can be devastating. Many of them are elderly and living on low incomes, and to suddenly receive an ‘Immovable Property Tax’ demand from a developer for thousands of euros causes them significant worry, stress and financial hardship,” he said.
“They have come to Cyprus to enjoy their remaining years in the sun and many have neither the strength nor the will to make a stand. They hand over the money without question, not wanting to cause a fuss or rock the boat.”
Howarth said he was also seriously concerned that police had refused to act on the evidence presented by those affected by the tax.
“This IPT scam is endemic throughout the island; it’s harming people’s lives. The government is aware of it and so are the police. Why are they refusing to act?”
CPAG supporters have also been lobbying their MEPs in Brussels about property problems in Cyprus.
In a recent letter to the Ministry of Justice, Nigel Farage MEP, asked whether Cyprus was “a rogue state on the fringes of civilisation“.
Copyright © Cyprus Mail 2009