Cities vie for real estate investments

Nigel Howarth
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Cities vie for real estate investments

Cyprus cities battle for real estate investorsLIMASSOL and Paphos may be the two cities that are seeking to attract the majority of real estate investment (they account for 70% of foreign buyers), but Nicosia is gaining momentum, Phileleftheros reported.

The capital is shaping up and gaining strength in the real estate sector, both in sales and construction of residential units. These indicators show the current mobility in the real estate market and the trend for building houses and apartments.

Rent prices have risen sharply both in Nicosia and Limassol and comments by people on social media reflecting their frustration.

Rent prices reach up to €600 for a one-bedroom apartment and €800 for a two-bedroom apartment. The increase in the number of students and the option to rent out property on online platforms such as Airbnb are leading the way things are moving in real estate.

Limassol currently ranks at the top of the list in real estate sales, but Nicosia is closing in. The number of contracts of sale deposited at the Limassol District Land Office during the last nine months has risen to 2,488 against 2,008 in the corresponding period of 2017, an increase of 24%.

On the other hand, Nicosia recorded an increase of 34%, with the number of sales contracts reaching 1,169 compared to last year’s 871, ending in third place (after Paphos).

Regarding foreign buyers, Nicosia lags behind Limassol; it remains last, with only 168 sales to foreigners, of which 88 are from non-EU buyers and 80 from EU buyers. Limassol ranks second accounting for 29.7% of sales to foreigners, with 949 sales contracts.

Regarding the future development of the real estate industry, Nicosia has picked up speed, while Limassol has stabilized. Nicosia is ranked first in the number of building permits. Between January and July, permits were issued for 1,185 units in Nicosia, up 74%, and 1,153 in Limassol, compared to 1,053 in the same period last year.

© In-Cyprus.com

Paphos marina delayed as Pafilia withdraws interest

Staff Reporter
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Paphos marina delayed as Pafilia withdraws interest

PAFILIA on Friday withdrew its interest in a tender to design, build and operate a Paphos marina according to a report by in-cyprus.com.

It said that it has complied with all its obligations in the procedure which has dragged on for 10 years, fulfilling all the requirements set by the Committee on the Management of Marina but that the interminable court procedures that still continue have not allowed the tender to be awarded.

The company said that the continued uncertainty for which it is not responsible and the delay in awarding the tender has discouraged an interested investor from investing in the project. Both the investor and the company have had capital deposited for the past year as proof of their economic viability.

Pafilia said that it would be best if the competition was relaunched with a new open process that satisfied new market conditions and would attract considerable interest. While reiterating its support for the construction of the marina which would boost the economy, Pafilia said it was continuing with its development programme which comprise the projects Minthis, ONE and NEO.

The marina was to be built at Potima, Kissonerga. The plan was for a capacity for 1,000 boats and more than 42,000 square metres of residential and commercial developments.

Cyprus second in EU for residence permits

Nigel Howarth
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Cyprus second in EU for residence permits

CYPRUS issued a total of 18,971 residence permits in its territory in 2017 putting it second behind Malta, according to Eurostat.

Out of the total number 18,971 permits, citizens of India received 4,710, (24.8%), there were 2,883 Russians (15.2%) followed by Nepal 1,406 (7.4%).

The total of 18,971 equates to 22.1 permits issued for 1,000 Cypriot citizens, this is the second highest percentage in the EU, behind Malta with 23 per 1,000.

Some 2,741 (14.4%) were granted for family reasons, 4,923 (26%) for educational purposes, 8,204 (43.2%) for employment and 3,103 (16.4%) for “other reasons”.

Meanwhile in 2017, about 3.1 million first residence permits were issued in the European Union (EU) to non-EU citizens. The number increased almost by 4% (or 112,000) compared with 2016.

Employment reasons accounted for almost one-third (32%) of all first residence permits issued in the EU in 2017, family reasons for 26%, education reasons for 17%, and other reasons, including international protection, for 24%.

The increase in the total number of first residence permits in 2017 in comparison with 2016 was mainly due to the increasing number issued for employment reasons (up by 15,000, or 18%), family reasons (up by 49,000, or 6%) and education reasons (up by 30,000, or 6%), whereas the number decreased by 123,000 (-14%).

One out of five first residence permits were issued in Poland (683,000, or 22% of the total number issued in the EU), followed by Germany (535,000, or 17%), the UK (517,000, or 16%), France (250 000, or 8%), Spain (231 000, or 7%), Italy (187,000, or 6%) and Sweden (130,000, or 4%).

Compared to the population of each Member State, the highest rates of first resident permits issued in 2017 were recorded in Malta (23/thousand population), Cyprus (22), Poland (18), Sweden (13) and Luxembourg (12). For the EU as a whole in 2017, six first residence permits were issued per thousand population.

Citizens of Ukraine (662,000 beneficiaries, almost 88% in Poland) continued to receive the highest number of permits in the EU, ahead of citizens of Syria (223,000, almost two-thirds in Germany), China including Hong Kong (193,000, almost half in the UK), India (163,000, 44% in the UK) and the United States (147,000, over half in the UK), Morocco (108,000, 41% in Spain) and Afghanistan (87,000, around 61% in Germany).

About half of all first residence permits issued in the EU in 2017 were issued to citizens of these seven countries.

Hotel projects grow as Airbnb is to be regulated

Editorial
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Hotel projects grow as Airbnb is to be regulated

Cyprus: Hotel projects grow as Airbnb is to be regulatedACCORDING to data released by the Cyprus Statistical Service, hotels are at the heart of the progress the building sector is witnessing.

New hotels, refurbishments and expansion projects have multiplied by eight times in the first seven months of the year, compared to the same period in 2017.

From January to July, hotel projects corresponding to 83,000 sqm. were licensed, compared to just 10,000 sqm. of projects licensed last year.

The 730% increase also accounts for one third of the licenses for new building projects.

Expected investments in the hotel industry include the construction of new hotel units island-wide while existing hotels are increasing their bed capacity.

Investments are encouraged by the increase in the number of tourists arriving in Cyprus, despite hotelier complaints about the erosion of their customer base by electronic booking platforms for apartments and villas.

Last year, a record 3.6 million tourists arrived in Cyprus and more are expected in 2018.

Private self-service tourist accommodation units rented out through web-based platforms such as Airbnb are soon to be regulated by law as EDEK MP Elias Myrianthous told the Financial Mirror.

These units, including flats, are to be included in the law regulating tourist units with the creation of an official register.

Myrianthous said MPs are currently looking to amend a bill submitted by himself and DISY leader Averof Neophytou, prior to the summer break.

The initial bill envisaged the inclusion of the self-service tourist accommodation becoming eligible to receive an operating license but left out Airbnb apartments in residential areas.

The House Commerce Committee now proposes that these flats are included on the pre-condition that the rest of the tenants of the building consent to a specific flat being used as tourist accommodation.

Myrianthous said a flat owner wishing to rent out his apartment through an electronic platform, will have to acquire written permission from the building’s management committee before being included in the registry.

“Otherwise the flat owner will be acting against the law and will face consequences,” he said.

The development is welcomed by the island’s hoteliers as they have campaigned for the Airbnb market to be regulated.

Chrisemily Psilogeni, General Manager of the Association of Cyprus Tourist Enterprises, in previous comments to the Financial Mirror said that accommodation units which are promoted through web-based platforms, operate without a license or carrying out necessary safety and hygiene checks.

“We are not opposed to modern trends, but we want to protect the hundreds of businesses that have been working for decades under adverse conditions, trying to maintain a high standard of tourist services provided,” she said.

Complex management seminar

Nigel Howarth
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Complex management seminar

A FREE SEMINAR entitled “Complex Management: A brief analysis of the law, practical issues and myths relating to communal ownership, Management Committees and general management of the communal areas” is to be held in Paphos.

Organised by L.G. Zambartas LLC, the seminar will be held on Wednesday 14 November at the Almyra hotel in Paphos (12, Poseidonos Avenue) starting at 17:30.

Topics to be discussed include:

  • Communal buildings
  • Formation & operation of management committees
  • Financial liabilities (insurance & the allocation of common expenses)
  • Swimming pool licenses

The seminar will be conducted in English.

Th speakers are Ms Afroditi A.Charalambides and Ms Christiana Achilleos, both of whom are senior lawyers with the law firm of L.G. Zambartas LLC (which is one of the law firms on the list of English-speaking lawyers provided by the UK Foreign and Commonwealth Office.)

Attendees will have an opportunity to discuss any specific issues with the speakers over tea and biscuits, both before and after the seminar.

Those wishing to attend should book their place by email to [email protected] or by telephone 26 220014 by Thursday 1st November at the latest.

Please note that the seminar is fully booked. A future seminar is planned to be held at a later date.

Lower VAT on land bought for primary residence

Elias Hazou
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Lower VAT on land bought for primary residence

Bill to lower VAT on land for primary residenceTHE GOVERNMENT is preparing a bill exempting from payment of the full 19 per cent VAT, purchases of undeveloped land for the purpose of building on it an owner-occupied primary dwelling.

Currently, when someone buys a finished housing unit or apartment as their primary dwelling they pay 5 per cent VAT, whereas buying a plot of land for owner-occupied housing incurs a 19 per cent VAT charge.

Lawmakers had called for a change, arguing it is unfair to newlyweds who typically are buyers of undeveloped land where they plan to build their primary house.

Under a bill being prepared by the finance ministry, such buyers would initially pay the full VAT rate, but would subsequently be refunded 14 per cent VAT, so that at the end of the day they pay 5 per cent on these transactions like everyone else.

A finance ministry official told MPs on Monday that the bill would be finished in two weeks, at which time it would be presented for ratification to the cabinet.

Once passed the law would have retroactive effect, applying to purchases made since January 1 of this year.

The state budget for 2019 will also need to be amended to factor in the extra expenditure from the anticipated VAT rebates.

The same official said he did not foresee complications, as the additional expenditures arising from VAT refunds would be relatively small, given that the monetary value of purchases of undeveloped building land since the start of the year is low.

At the same time, there continues to be a lack of clarity in the law passed back in November 2017 that imposed 19 per cent VAT on the sale of building land.

That law stipulated that VAT would be imposed on all sales of building plots taking place as part of economic activity.

It was left to the tax commissioner to decide, on an individual basis, whether a transaction is commercial or not.

Some MPs are complaining that this ambiguity leaves room for abuse or unfair treatment of buyers.

Disy MP Averof Neophytou said some transactions are being treated as commercial – in which case a capital gains tax of 20 per cent is imposed – whereas others fall under income tax which may be as high as 35 per cent.

One way to resolve the issue would be to apply a single rate for all transactions, he said.

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