FOR years now and especially during 2006 and 2007, the government earned significant revenues from the property sector, a fact that constituted an important boost to public finances. Of course, the current government aspires to similar or better revenues in the future.
This of course leads to a few legitimate questions: What measures has the Cyprus government put into place to have the necessary foundations for this revenue in the future?
How did it help the players of the sector (developers, buyers) to engage in new transactions? Any reasonable person could wonder:
What should the government have done – that it has not?
We believe that it could have done more; it could have taken measures that would have given the sector and the economy as a whole, a boost.
And because we do not simply like to criticize, we will list below some of the measures that could, have been taken.
The first and most important is the one related to the issuing of title deeds. This is a measure that affects foreign and local buyers and would surely appease the interested parties and help the sector tremendously.
The issue is perpetuated and remains a basic obstacle to the growth of the property sector. (There are five complicated bills under discussion in the House of Representatives that, even if passed in their present form, will still not resolve the problem within a reasonable timeframe).
We are in a crisis period and buyers are confused and are not buying. What incentives has the government granted so that the potential buyers would buy their property today and not in five years time?
Why didn’t they reduce transfer fees at least where VAT is applicable? Why haven’t they given the sellers an incentive by decreasing the percentage of capital gains tax from 20% to 10%, for one year, so that they can decrease prices?
Many developers are finding themselves in a difficult financial position. Many have projects they cannot finish. The government could help by granting loans with a lower interest rate so that the projects can be completed and not appear to be abandoned giving the Cyprus real estate market a terrible image.
Following the lack of interest from the traditional English market, what did the government do to promote holiday homes to other foreign markets and to attract new buyers?
Not only did they not do anything, the relevant governmental services, such as our embassies, for example, with the way that they function create serious problems by not giving timely entry visas to non-European Union citizens and substantially neutralize the efforts that developers make spending large sums of money on advertising abroad.
The above-mentioned are some of the measures that could be taken immediately by the government, in order to help the real estate sector.
Despite the fact that the measures were not taken, we dare to say that it is never too late. The government can easily, even at this late stage, take measures, that will create movement in the market and will also help the property sector. The sooner the better of course.
George Mouskides is the President of the Cyprus Association for the Promotion of Property Development and Manager, FOX Smart Estate Agency.