Property valuations every five years

The Council of Ministers has submitted a bill to Parliament to reduce the frequency of general property valuations carried out by the Department of Lands & Surveys from three years to five years.

General property valuations

Originally, general property valuations were based on an assessment of a property’s value at 1st January 1980. This 1980 valuation was used to calculate an annual Immovable Property Tax payable to the Tax Department and an annual tax to the Community or the Municipality in which the property was situated. Community and Municipality councils have the power to raise and set these local taxes.

(Note that the annual Immovable Property Tax payable to the Tax Department was abolished as of 1 January 2017, but remains in force for calculating a ‘local’ property tax payable to Communities and Municipalities.)

It had long been recognised that the 1980 values were out of date and bore no relation to the worth of a property.

As a consequence, the Department of Lands and Surveys announced plans in 2011 to revalue all property on the Island starting in 2012 and will set the ‘new’ market values as they stand on 1st January 2013, which would be used for taxation purposes.

By October 2014 the Department of Lands and Surveys had received more than 4,600 objections to their property revaluations while a further 7,000 or so objections had been received by the Citizens Service Centres. MPs also reported receiving hundreds of complaints.

So great was the number of objections, the deadline for their submission was extended by four months.

In 2018 the Department of Lands & Surveys updates the values of more than two million properties and repeated the exercise in 2021.

However, the bill placed before Parliament will see the next general property valuations carried out by the Department of Lands & Surveys put on hold until 2026.Subsequent valuations will take place every five years (assuming the bill is approved by Parliament.)

Property valuations reaction

On Tuesday, the Cyprus Real Estate Agents Registration Council released a statement supporting the bill to increase the frequency of property valuations from three to five years saying that it would lighten the workload on the Department of Land and Surveys, allowing it to focus on other tasks

As the council’ president Marinos Kineyirou explained “We have raised the issue many times, both in private meetings with government officials and in our public statements.

“We believe that conducting a general valuation every three years is unnecessary, as the fluctuations that may occur over such a short period are minimal to insignificant, while at the same time, the workload placed on the Department of Land and Surveys, one of the most critical sections of the state, increases.”

It should be noted that general property valuations do not reflect a property’s market value; it is only used for taxation purposes.

Those wishing to obtain a market value of their property should contact a RICS valuation surveyor or a member of the Cyprus Property Valuers Association.

Wealthy migrants are welcome in Cyprus

Cyprus is considering easing residency permit requirements for wealthy foreign nationals under a proposed bill.

The proposed legislative changes would grant residency permits to third-country nationals who invest €250,000 in housing and have an annual income of €40,000.

According to the bill, a residence permit may be granted to a wealthy third-country national who intends to reside in the Republic without engaging in any employment or other economic activity in the Republic and has at his disposal an insured annual income of €40,000 (increasing by €10,000 for each additional family member) as well as suitable owned accommodation in the Republic for himself and his family members worth €250,000.

The proposal is currently under debate in the House Internal Affairs Committee.

Philenews reports that some stakeholders support lowering the housing investment threshold to €150,000, arguing it would facilitate purchases of existing homes and apartments.

Others counter that a lower threshold could increase housing demand and prices, negatively impacting local buyers.

The regulations aim to attract foreign investment while ensuring the financial stability of those obtaining residency.

The proposal covers various categories, including self-employed, salaried, investor, and self-sufficient foreigners.

© In-Cyprus.com

Boat owners outraged as marina project remains in limbo

It might be a common assumption by now that the €1.2 billion investment in the Larnaca marina and port is up in the air, however, the managing company, which has not yet paid the contentious guarantee, is attempting in the midst of this situation to increase its income.

As sailors revealed to Phileleftheros, they were asked for rent for the small kiosks they maintain at the marina entrance, which had been granted to them as compensation for the significant decrease in their business turnover.

The most unbelievable aspect is that the rent was requested from the professionals on April 18.

Three days, that is, after the meeting at the Presidential Palace, during which the President of the Republic conveyed to officials of Kition Ocean Holdings and Aroundtown that without payment of the guarantee for the port, the contract signed cannot be considered valid.

Through a letter, which Phileleftheros reveals, Kition informed the sailors that it will impose a monthly rent of €100 for the kiosks, even asking them to prepay three months starting from May 1.

The sailors were further informed that by April 30, they must settle all their debts, otherwise the marina management has every right to remove their kiosks.

“They ruined us and now they demand more,” said Angelos Assiotis, owner of mini-cruise boats, recalling that exactly a year ago the sailors had closed the port entrance due to increases in docking fees imposed by the company at a time when they were experiencing significant revenue losses from the closure of the protected quay.

“As soon as they took over, they increased the fees by 15%, claiming that there would be infrastructure, luxury hotels, mansions, and a lot of people would come and therefore prices had to change. We feel very disappointed, we feel that some are fooling us and that they took the marina and the port and only collect profits,” he added, indicating that some people must be held accountable.

“Those who signed these agreements must resign and publicly apologize, because it is really a big fiasco for the Cypriot people. In other words, disgrace…”

Ringing the alarm bell once again regarding the survival of Larnaca’s sailors, Assiotis noted that he himself was forced to move his boats to other provinces. “None of us will survive in the end.

“There are 30 families here and our work has decreased by 80% compared to 2022. They tell us that the quay has not been completed and left a small door open for the public. They ask us for rent and to pay our debts.

“However, because we don’t work during the winter, we settle all our obligations in June and July. Not only did they destroy maritime tourism and Larnaca’s coastal shipping, but they also demand prepayments and extra charges,” he said, noting that the offered services have been downgraded.

“They told us they would close the quay for three months; it’s been 1.5 years and nothing happened. The woods are the same and some are even protruding, it’s dangerous for someone to stumble. They just did some work underneath and painted iron.”

“Some boats went to the occupied territories.”

Similarly, feelings of anger prevail among the owners of pleasure boats at the Larnaca marina, who had been warning for a long time that something was wrong, conducting a series of mobilizations.

“We feel anger about what is happening. We were the first to shout about the haste in the small projects by the investor, as well as the way he handled matters. We told them, and they responded, ‘it’s not like that,'” said Chris Stakas, president of the Cyprus Yacht Owners Association, indicating that their MPs condemned them when the issue was first discussed in Parliament.

“Two MPs attacked us because, as they said, we offended the investors. One MP told me to imagine this, ‘here comes you, a boat owner, to tell us if the investor is doing his job.’ And we showed the minister photos and told him that no works were done.”

Pointing out that boat owners “paid the price for the big investment” which ultimately turned out to be, as he said, “a parking lot and a trampoline,” Stakas requested information from the Ministry of Transport.

“They imposed over 50% increases on us. Those who allowed them to act like this now it’s time to take responsibility. Unfortunately, the state has not risen to the occasion, and we demand a meeting with the Minister of Transport.”

The president of the Cyprus Yacht Owners Association further denounced that “with its behaviour, the contractor company managed to drive away over 50 boats that were in the marina for years. Most went to Ayia Napa, some foreigners went to the occupied territories, and some went to Greece. We are talking about a marina that was always in demand and full. Now it has vacancies, and people are not coming.”

He further added that nothing justifies the imposed increases, as the offered services have been downgraded.

“They imposed fees and increases on any service provided, even if they are responsible themselves. For example, an engineer who wants to do some work on my boat has to pay €1000 annually, and the cost is passed on to us. Also, if we use the crane, a fee of €150-€200 must be paid, but they make us sign that they have no liability. The small docks, meanwhile, have not changed, and some are half-destroyed. They even charge us for the garbage, although there was no such charge before.”

It is noted that Phileleftheros forwarded a request to the company to respond to the allegations made by boat owners; however, there was no response.

After managing to rally everyone against it, even amid an election period, Kition Ocean Holdings, through yesterday’s announcement, attributed its absence from the Parliament on Wednesday to a misunderstanding, noting that the incident “does not indicate our intentions, nor do we wish it to be perceived as a lack of respect for the House or a lack of commitment to our work.”

It mentioned that its representatives were informed by the media, and it was too late to attend in person, expressing readiness to meet with the Transportation Committee. Finally, it asserted that it remains committed “to the successful implementation of the project” and to maintaining a “spirit of cooperation.”

The president of the Transportation Committee, Marinos Mousiouttas, spoke of an insult to the Parliament, wondering what should be expected from the company regarding the project’s implementation, as it had been searching its email for the invitation sent for a week.

© In-Cyprus.com

Cyprus property market continues to be sustained by foreign buyers

External reasons, combined with Cyprus’ economic conditions, are affecting both local and international demand in the local property sector, according to Michalis Tsangarides, director of Delfi Partners, who noted that foreign investors continue to sustain the market domestically.

In a recent analysis piece, Tsangarides noted that during the first quarter of 2024, the market showed varied trends with Nicosia on an upward trajectory, Larnaca stagnating in terms of investment activity, and other regions facing declines.

“The fluctuations observed during the first quarter of 2024 with Nicosia remaining on an upward trend, Larnaca holding back investment activity and the rest of the free Cyprus district recording losses, if anything, set the tone for a year of increased challenges,” he said.

These challenges, he explained, are caused by geopolitical instability, inflation, and high interest rates, among others.

Addressing the market’s resilience, Tsangarides said that “the fact that sales documents filed in the first quarter of 2024 showed at least a marginal increase of 1 per cent compared to the corresponding quarter of 2023 gives some encouraging signs.”

This suggests the real estate market’s ability to withstand pressures and turbulence. Specifically, the Nicosia district closed the first quarter with a 42 per cent increase in sales, totalling 813. In contrast, Larnaca also saw a rise, with a 6 per cent increase and 723 sales.

“On the contrary, the double-digit decline recorded by the Limassol district, the most systemic in banking terms, of the Cypriot real estate market, cannot go unnoticed,” Tsangarides pointed out.

Furthermore, Paphos stopped its continuous upward trend, showing an 11 per cent decline in sales. The largest decrease was observed in the free area of Famagusta, with a 16 per cent drop.

Among these local fluctuations, the international market remains a significant player. “These performances are recorded at a time when the real estate market in Cyprus continues to be fuelled by foreign buyers, who account for four out of ten property sales made in Cyprus in the first quarter of 2024,” he said.

According to the data of the Department of Land and Surveys, international property sales from January to March 2024 reached 1,451, with 418 (29 per cent) sales to EU members and 1,033 (71 per cent) buyers from third countries. Paphos stands out, where international sales significantly exceed local purchases.

Tsangarides highlighted the ongoing challenges and the sector’s vital role in economic growth. “It is clear that the real estate sector is again being called upon to cope with increased uncertainties and to continue to fuel the growth of the Cypriot economy.”

He warned about the impact of worsening geopolitical scenarios but remains hopeful for a potential recovery.

“Certainly the desperate scenario of deteriorating conditions in the geopolitical environment will have an impact on both domestic and external demand,” he said.

“However, the picture will be diametrically opposite in the event of normalisation as the market appears ready to exploit its potential,” Tsangarides concluded.

CM

Larnaca port & marina investment in jeopardy

The investment of €1.2 billion in the Larnaca port and marina is unprecedented, and with the current data, it seems to be hanging by a thread.

Until Tuesday afternoon, when the telegram given by the Minister of Transport to Kition Ocean Holdings expired, not only was the contentious guarantee for the port not deposited, but the company had also not informed about its intentions.

This is despite the fact that ten days ago there was a commitment to deposit it before the President of the Republic by officials from Aroundtown, which is the main shareholder of Kition.

“Our options are to speak with them tomorrow (note: yesterday) to see their intentions regarding the guarantee, and accordingly we will communicate with the Legal Service,” the Minister of Transport told Phileleftheros yesterday afternoon, noting that the matter will be discussed today in the parliamentary Transport Committee and representatives of the contractor company have been invited to be questioned.

“We are facing a very substantial breach of the contract; it is a very serious situation, and our handling should be equally serious,” Vafeades pointed out, noting that terminating the contract is a complex process.

“What is provided in the contract is that the state takes over the operation of the port and marina from day one. However, the process is complex because there are subcontractors with whom the company made agreements. The contract stipulates that in case of contract termination, the time for the contractor to be removed entirely must be determined. It allows you, that is, to negotiate with the subcontractors to continue the operation of the port and marina.”

He also added that if there are ways to help the contract so that it is not terminated, this will be done, provided that “it falls within the framework of legality.”

Meanwhile, the guarantee of €10 million for the operation of the port expired on January 31, 2024, and without its deposit, as the Legal Service has already advised, the contract cannot remain in force, nor can negotiations with the contractor company continue.

It is recalled that Kition Ocean Holdings had argued that the amount of the guarantee should be €4.2 million and at the same time had submitted a series of requests to make changes to the design and prioritise land development projects. At the meeting at the Presidential Palace on Monday, April 15, Nikos Christodoulides clarified, as Larnaca bodies present had stated, that without the deposit of the guarantee, the contract cannot be in force.

In an attempt, indeed, to resolve the deadlock, it was agreed that the company would deposit a guarantee of €4.2 million, as it was its desire, and subsequently the issue would be resolved through a fast-track dispute resolution process.

The intention to deposit the guarantee had been communicated, in fact, on the same day by Kition Ocean Holdings, expressing optimism that “within this framework of cooperation, pending issues will be quickly resolved, and the start of construction works will be expedited as soon as possible.”

It also committed to “maintaining a spirit of mutual cooperation to ensure the success of the project.”

Nevertheless, for unknown reasons, it did not deposit the guarantee, knowing that a telegram had been given by the Minister of Transport until yesterday, who also publicly announced the state’s decision.

It should be noted that Vafeades had revealed to the Larnaca Development Committee last Friday that the latest instructions from the Legal Service, before Nikos Christodoulides’ intervention, were for the state to terminate the contract with the contractor company.

Developments, as recorded, cause great concern among the Larnaca bodies, as the possibility of a shipwreck is more visible than ever.

The city’s Development Committee, however, has been calling on the contractor company since last Friday to immediately deposit the guarantee for the port.

At the same time, it unanimously decided to call on the state not to proceed with discounts regarding the infrastructure projects included in the contract and not to grant an additional extension for the projects, which are due to start next June.

© In-Cyprus.com

Limassolians to protest against high rents

A protest against high rents in Limassol will be held on Saturday, April 27 starting at 17:00 at the square in front of the District Administration Office in Anexartisias Street.

The event is being organised by the Initiative for Housing, a grassroots citizens group focusing on problems surrounding housing in Cyprus.

In its statement, the Initiative for Housing noted how expensive life on the island has become, as salaries remain stagnant while rents and consumer prices keep increasing.

“We cannot pin our hopes on the famed development and the luxurious high-rise buildings”, the statement continued. “Nor can we expect the landlords who rent us crumbling €800 studios to suddenly care about us and reduce our rents. Landlords only care about their interests”.

“We will only reclaim our neighbourhoods and our lives when we come together to firmly address our needs in opposition to the state’s policies, the affluent landlords, and the gentrification of cities”, the statement concluded.

Although residential property rents have been rising across Cyprus, Limassol has been particularly affected with rents sky rocketing in recent times.

A similar protest was held in Limassol in June 2018. It was attended by hundreds of mainly young people carrying banners and slogans against rents for homes and apartments, which had increased significantly in recent two years.