The ignorance, lunacy, stupidity of the bill – call it what you will – has driven yet another nail into the coffin of Cyprus’ one thriving property market. I pass all the MPs (with one exception) my wholehearted congratulations on a job well done – bravo ladies and gentlemen!
The only MP with the intellect to appreciate the consequences of the bill was Giorgos Perdikis, who voted against it. It is ‘unfortunate’ that his parliamentary colleagues failed to comprehend the consequences of their actions.
The bill proposes that Immovable Property Tax will be paid by those who have purchased property, and deposited their Contract of Sale at the Land Registry and taken delivery of the property (regardless of whether the property has been issued with its Title Deed). Property developers must have heaved a sigh of relief when they heard the news as it is they who will benefit from the changes – and who knows, they may have even petitioned the government to make these changes.
(However there is a provision in the bill that exempts those who have not obtained the Title Deed through no fault of their own; for example if the developer is insolvent.)
So, on the face of it, the purchasers of those properties whose 39,490 Title Deeds have been issued and are awaiting transfer will be required to pay Immovable Property Tax (plus, possibly, thousands more whose Title Deeds have yet to be issued); this bill is clearly unfair.
Had the bill been worded so that purchasers would be liable for tax if the Title Deed “was available for transfer”, that would have been acceptable and fair. (Although this would not include purchasers who had made illegal changes to the property, I’m sure the legal brains in Nicosia could have conjured up some appropriate wording to cover this situation.)
But as the bill currently proposes, purchasers will have to pay Immovable Property Tax irrespective of whether the property’s title is burdened by a mortgage and/or other impediments, the developer has not cleared the company’s tax debts, etc., etc., etc..
Furthermore, if the development company goes into liquidation before the transfer of title to the purchaser takes place, the purchaser can wave goodbye to the Property Tax they have paid – and even more worrying – possibly the property itself!
Anyone who buys property in Cyprus without a clean Title Deed should now be considered as suffering from a mental illness and hospitalised until they recover their senses.
Who in their right mind is going to agree to pay tax on something they don’t own and may never have the possibility of owning through no fault of their own?