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Reward bad borrowers; punish the good

In a move, which if successful, will result in rewarding bad borrowers while punishing the good, the Cyprus parliament is expected to vote on proposals granting tax relief to bank debtors by July.

Reward bad borrowers in Cyprus SOMETIMES the logic of politicians is impossible to fathom, such as the legislative changes to be discussed and voted by the Cyprus parliament by July that will reward bad borrowers who are unable/unwilling to pay their debts by offering them tax relief.

Four bills are up for discussion to incentivise borrowers who wish to sell their house as part of restructuring their debt with a bank or to settle a non-performing loan (NPL), reports the Cyprus Mail.

Under the proposals these ‘bad borrowers’ be exempted from paying income tax, capital gains tax, stamp duty and the special defence contribution.

A fifth bill, if passed, will exempt those who wish to sell their property to restructure their debt or settle their non-performing loan from paying Property Transfer Fees.

The proposals will also cover cases where borrowers sell their house on the free market, according to the co-author of the bills Disy MP Averof Neophytou.

Neophytou’s reasoning is that ‘bad borrowers’ will be able to sell their property on the open market at a higher price, as a bank will use the ‘forced sale value’ of a property when it carries out in a debt-for-asset swap; a property’s forced sale value is significantly lower than its market value.

It seems that the bills have the support of all political parties, the Finance Ministry and the Association of Cyprus Banks.

I’m certain that ‘bad borrowers’ will applaud the news that they will be offered tax breaks and other incentives.

And I’m equally certain that ‘good borrowers’, who continue to maintain their loan repayments in the face of financial difficulties will not be amused.

However, this will send a signal to many of the ‘good borrowers’ to default on their loans to take advantage of the incentives being offered to ‘bad borrowers’.

Readers' comments

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  • Scott says:

    Stop paying any outstanding loans and mortgages, become a local I am all for equality.

  • stanno says:

    When will this madness stop. For people who were robbed of everything in 2013 with Cyprus popular bank we are offered no help or tax cuts.

    Even when we try and buy a house we have to pay land registry taxes without a break.

  • stanno says:

    Its weird that I and many who have been robbed millions of Euros in 2013 get no assistance or relief or pension from the Government. What an injustice and only in Cyprus do they behave like monkeys in a jungle.

  • Richard says:

    The lunatics aren’t running the asylum. But, the banksters are (and always were). Unfortunately for all of us – it’s just taken an absurd amount of time for people to wake up to the reality of it.

  • aggis demetriou says:

    What about the Mis-selling of the Swiss Franc Loans?

    Will there ever be a legislation ?

    Ed: If there is you know where to find out the details.

  • Costas Apacket says:

    I didn’t think it was possible for Jokerama Island to get any worse, but here is proof that the inmates are running the asylum.

    Better than brown envelopes, triple pensions, overpaid underworked teachers and civil serpents.

  • Cousin Jack says:

    Expect Alice, the Mad Hatter and the March Hare to be along any minute.

    Yet more idiocy from the pseudo government of La-La Land looking after their own again.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.


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