PROPERTY evaluations in relation to bank loans and the new property tax have caused a whirlwind of reaction from MPs who yesterday claimed that banks and the Land Registry both manipulate the value of real estate to serve their own interests.
According to MPs, banks underestimate the value of real estate used as loan collateral in order to pressure owners into mortgaging additional property, while the Land Registry overestimates the value so as to collect increased transfer fees.
Expert appraisers have pointed out that the situation may cause a vicious circle as banks and private evaluators use different approaches to estimate the same property, while the matter will result in benefiting lawyers and appraisers and not the state.
According to the appraisers, owners are expected to react to the new property tax in order to reduce the fee, as practice states that re-assessed values must be publicised and owners have the right to object within two months.
In case the objection is rejected, affected parties can resort to justice, but it is unknown whether the entire process can be completed in time for the Land Registry to re-evaluate all properties based on 2013 values by June 30, in accordance with the terms of the bailout agreement.
Appraisers have further stressed that during times of financial stability, some of their colleagues would not assess property based only on its value but also according to the amount of an applicant’s loan, resulting in fictitious values.
They also noted that in the past there had been significant discrepancies between Land Registry and private appraisals of the same property.