DURING the “fat cows” era, transfer fees (i.e. fees for the transfer of title deeds) were a significant income for the State Treasury. This income has declined very much not only because of the collapse of the building industry, but also because of the “difficulties faced by the purchasers in paying the fees”, as the Ministry of Interior admits on its official site.
It is true that the “difficulties faced by the purchasers” is not the only reason for the non-transferring of title deeds. Other reasons are the existence of a mortgage against the property, the absence of a penalty in the case where there is an unreasonable delay in proceeding to the transfer and paying the fees etc. The fact remains that thousands of title deeds which have been issued in recent years as a result of the combined efforts of the Government Departments have not been transferred to the name of the purchasers. As a result the Public Treasury loses tens of millions of euros.
A generous discount on the amount of property transfer fees for those transferring the title deeds within a reasonable time from the date of their issue could be a serious motive to both sellers and purchasers to complete the transfer. At the same time it would result in the immediate flow of millions of euros into the State Treasury. The mechanism for implementing this proposal could be as follows:
- As soon as the new title deeds are issued, the Land Registry informs both the seller and the purchasers about this fact and that if the titles are transferred within, say, three months, there will be a discount in the transfer fees of, say, 30%.
- If the property is not transferred within the deadline specified and the delay is due to acts or omissions of the seller e.g. because of the existence of a mortgage, the seller will be liable to a penalty for the purpose of reimbursing the purchaser for his loss, by paying the difference between the discounted fees and the full fees, when the property is eventually transferred.
This procedure will also be available to titles which have been issued in recent years but no transfer was made so far.
This procedure will:
- encourage purchasers to transfer the property in their names asap in order to benefit from the discount;
- encourage developers to collaborate by lifting any mortgage or any other impediment in order to avoid paying the penalty and;
- will result in a very significant flow into the Public Treasury in a short time.
A similar measure (discount within a deadline) has been applied in the case of Immovable Property Tax during the last few months with great success.
I understand that there may exist some administrative or bureaucratic issues in applying the measure but this cannot be an excuse for not introducing it. After all it leads to a win-win situation. It goes without saying that an amendment of the Law is necessary for implementing my proposal.
Andreas D. Symeou
LL.B., M.Sc (ULA), MRICS
Property Consultant
Visiting Lecturer, Neapolis University
This is a great suggestion, Andreas, and I for one would support it as long as the discount was set at least 30%.
All we would then need would be for the Cypriot Banks to start offering reasonable interest rates for the subsequent mortgages they would want to register against said titles to replace any existing buyer loans that may exist.
The lack of transparency is a major issue here and a Flat Fee Charge (say €500) per issuance instead of one based on a mystic 1980 property value calculated in secret… would bring the money in… not a discount that may, or may not really exist !
As mentioned in the article a discount on transfer of title deed would be a good incentive to pay the fee asap.
Does that mean, the people that have already paid will get a refund?
Well done Andreas D. Symeou, this about as sensible a solution as anyone has up with yet. I hope someone from our government who has some independent sense in their brain looks very closely at your observations and takes some action.
Regards.
The idea is very good, but a 30% discount will be not enough at all. Unless if the Land Registry will be scalped of their totally arbitrary right to increase the value of the property (with 10 to 50%) before they start calculating the transfer fees.
Dear Sir
You are still living in the clouds people have No Money, if they have they will hide it in fear of tomorrow. So just wake up, unless it will be free transfer of title or a flat fee of say 100-500 euros, no one will transfer, you should take extra ordinary measures in extra ordinary times !
Brilliant a discount on my transfer tax.
Oops I forgot I can’t pay it as my home is in fact still owned by the developer that I thought I bought it from eight years ago.
Come on Andreas tell it like it is.
@Pippa
If you email me the details of your case, (sym.andr@cytanet.com.cy) I may be able to help without any charge.
I would gladly pay the property transfer fee just let me have my title deeds!!!!
The land registry and town planning department need to get out of the 13th and into the 21st century. But unfortunately with the dinosaurs that seem to be in charge there seems to be little likely hood of this happening in my lifetime.