ALTHOUGH the provisions of the ‘town planning amnesty’ bills have yet to be implemented, there has been a noticeable increase in the rate at which Title Deeds are being issued and transferred by the Land Registry Offices throughout Cyprus.
The reasons behind this increase are unclear, but it is obviously good news for property buyers, many of whom have been waiting for their Title Deeds for several years. It is also good news for the government, if you assume that each transfer brings an average €8,000 into the state’s coffers.
(The dip in the number of transfers completed in April is probably due to the Easter holiday at the start of the month).
Excessive property transfer fees
However, as we have reported on a number of occasions, many people find themselves being asked to pay excessive Property Transfer Fees for the privilege of owning their home.
The Land Registry Offices are required by law to calculate Property Transfer Fees based on the property’s market value on its date of sale and will usually accept the sales price quoted in the contract, but not always. It will check the contract price (known as the declared price) against records it maintains of prices for similar properties in the same area sold at the same time.
If you paid €150,000 for a property and the Land Registry records show that similar properties in the same area were selling for €175,000, it will base the Property Transfer Fees payable on €175,000 (this is known as the accepted price).
Shockingly, the Land Registry is under no obligation to provide a written report on how it has calculated this ‘accepted price’ which is always higher than the ‘declared price’; never lower.
This situation has arisen because ‘a good percentage’ of individuals under-declare the sales price in efforts to reduce the vendor’s Capital Gains Tax liability and the purchaser’s Property Transfer Fees.
To give you some idea of how much alleged ‘fiddling’ goes on, so far this year 4,897 property transfers have taken place. These properties had a total declared price of €750,071,483.52, which the Land Registries uplifted to an accepted price of €806,491,914.39; an increase of 7.5%.
If you are caught in this situation, what can you do?
The first thing you should do is argue your case. This proved successful for a couple dealing with the Limassol Land Registry Office.
If that fails, you can obtain an independent valuation of your property and apply to the Supreme Court to contest the Land Registry’s valuation within 40 days of the Land Registry’s assessment. To strengthen your case it’s probably best if you obtain two or three independent valuations.
If you want to know what your property Transfer Fees could possibly be, the Department of Lands and Surveys has a handy on-line Property Transfer Fee Calculator.