THERE is still a long way to go before the property market recovers, with any movement in the sector seen as only a flash in the pan, the president of the Cyprus Property Owners’ Association George Strovolides warned this week.
Speaking at the association’s annual general meeting, Strovolides said the dramatic drop in the sector was ongoing, especially in tourist areas where prices remain 30% down compared to the previous two years.
He was clear that any activity in the property sector is only temporary and the market here depends on the economic recovery of international markets mainly Britain and Russia – the island’s main markets.
“There continues to be a slump in the market and purchases by Cypriots in the tourist areas of Paphos and Protaras are only a drop in the ocean,” he said sounding the alarm that it was premature to make statements about a recovery.
“Even transactions through the Land Registry may concern older sales where transfers are made at a later stage,” he added.
The Association favours the proposal to review property prices for tax purposes from 1980, provided a tax reform is in place so that the system becomes fair.
“The untaxed sum of properties should be corrected since values will multiply,” Strovolides said.
He criticised the ongoing delay in issuing title deeds with 130,000 still pending and the state losing hundreds of millions in transfer fees.
The association insists on the simplification of the property tax system so that state coffers would benefit.
Strovolides argued property taxes are currently multiple and complex while a simplification of the system would boost state revenues and spark mobility in the moribund sector.
The Association is proposing a reduction in capital gains tax from 20% to 10% and higher untaxed sum, saying lower taxes would help combat tax evasion.
It also suggests the reduction of transfer fees to 3% without scales, the abolition of property tax and abolishing double taxation of rents – as income or corporation tax, and a special defence contribution.
Tax payments should also be simplified, so that property owners pay a single authority.