Property for passports?

Staff Reporter
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Property for passports?

Cyprus property for passportsIT IS THE PARADISE island in Europe which has not suffered from deteriorating relations between Moscow and the West. Quite the opposite.

Cyprus is home to thousands of Russians seeking sun, tax benefits and an EU entry point. The biggest spenders on property can even apply for a Cypriot passport and therefore EU citizenship.

It is a controversial scheme but a lawyer working in the field told Euronews it has all helped the economic recovery in Cyprus since 2013.

“Some 4 billion euros have entered the Cypriot economy, through these programmes,” explained lawyer Dimitris Dimitriades.

“It’s a significant amount which represents at least 20% of the country’s GDP.”

Critics however say that Cyprus has failed to carry out due diligence in relation to applications and that the scheme raises security concerns.

These are fears the island is eager to play down, insisting that regulations are in place.

“First of all, I must stress that we can’t talk about ‘selling’ passports,” said Dimitriades.

“In any case, the illustration of the Cypriot passport in advertisements won’t be allowed any more. More precisely the marketing of the programme won’t be allowed – only in a very strict way and there is also a special monitoring committee and a list of the service’s providers.”

Limassol is a particular favourite of those who have made the move from Moscow. Last year, Cypriot authorities said that more than 2,000 passports were issued, with half of them going to Russians.

First published by Euronews on 1st February: Property for passports? How Russians have given Cyprus a boost

Swiss franc loan annulled in Slovenia

Reuters News Agency
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Swiss franc loan annulled in Slovenia

A COURT in Slovenia has annulled a real-estate loan in Swiss francs because the borrower was not informed of the high risks of such a currency deal, the borrower’s lawyer said on Friday.

The decision puts as much as 524 million euros of loans held by Slovenian banks at risk and may have implications elsewhere in Europe.

Households and firms in Slovenia and elsewhere in Europe took out loans denominated in Swiss francs, mostly from 2004 to 2008, to benefit from low Swiss interest rates.

But their repayment obligations later soared due to a surge in the franc, particularly after Switzerland scrapped its cap on the currency in January 2015.

“This is a break-through decision. It is the first such decision in Slovenia and one of the first in the European Union,” the lawyer, Robert Preininger, told Reuters.

“The main reason for such a decision is that banks were aware of high risks and of a possibility of depreciation of the Swiss franc but did not inform consumers of those risks while they expected to profit on that account. That was a very immoral business practice,” he said.

Preininger declined to give any details about the loan or borrower.

According to the court decision the borrowed has to repay the Slovenian unit of Austrian bank Sparkasse only the amount of loan received without any interest, Preininger said.

He said this meant the total repayment will be at least 60 percent lower than it would have been if the loan was not annulled.

Sparkasse told Reuters it has not yet received the decision and gave no further comment. The court – the appellate High Court in Ljubljana gave no immediate comment.

The central Bank of Slovenia told Reuters total outstanding amount of loans in Swiss francs amounted to 524 million euros at the end of May 2017 but gave no comment on the ruling.

According to local media a total of about 20,000 loans denominated in Swiss francs were given to individuals and companies by the Slovenian banks.

(Reporting by Marja Novak Editing by Jeremy Gaunt)

Calculating communal fees

Nigel Howarth
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Calculating communal fees

EVERYONE who has acquired an apartment1 in Cyprus is required to pay ‘communal fees’ as soon as they take delivery of the property. These fees are used to pay for the management, insurance, maintenance, operation and repair of the ‘jointly-owned building’ by its Management Committee2.

Communal fees are also payable in other types of building complexes that are jointly-owned with shared facilities such as swimming pools, tennis courts, etc. that are available for use by those who have acquired units on the development and their guests.

It is obviously in the interests of all purchasers to ensure that the common areas and shared facilities are well maintained and kept in a good state of repair and decoration to prevent them from looking shabby and their units from falling in value (not to mention the quality of life of the present occupants.)

I have received several emails recently on how contributions to the communal fees are calculated. The most common (but incorrect) methods of calculating the fees are:

  • Everyone pays the same.
  • Those with a two bedroom unit pay twice as much as those with a one bedroom unit, etc.
  • Pay according to the percentage of the commonly owned building they own as shown on their Title Deed.

The correct method of charging is based on the relative size of each unit in square metres, comprising the enclosed area of the unit plus the covered and uncovered area of balconies, verandas, etc.

Communal fees example

The following shows a jointly-owned building comprising six units. Their enclosed, covered and uncovered areas of each unit have been totalled in column five. The sixth column shows their share of the total area; Unit A’s area of 159 sqm. is 23.35% of the total area of 684 sqm. and so on for the remaining units.

Unit Enclosed
Area		 Covered
Area		 Uncovered
Area		 Total
Area		 Communal
Fee
Total Area: 684 100.00%
A 128 6 25 159 23.25%
B 82 7 13 102 14.91%
C 82 3 25 110 16.08%
D 90 4 12 106 15.50%
E 90 4 18 112 16.37%
F 78 3 14 95 13.89%

If the Management Committee sets the annual budget at €2,500, the purchaser(s) of unit:

  • A would pay 23.25% of €2,500 – €581.14
  • B would pay €372.81
  • C would pay €402.05
  • D would pay €387.43
  • E would pay €409.36
  • F would pay €347.22

Obtaining the information

The information needed for those with Title Deeds is straightforward:

Follow my guide at Online property valuations revisited.

When you print the details by clicking ‘Print‘ in the Identification Results window, a small new browser window is displayed, which contains details of all the units. Copy and paste the contents of this window into a spreadsheet, deleted the lines above ‘B. REGISTRATION ON PARCEL’ and you’re ready to go.

For those without Title Deeds you will need to get the information needed from your developer or the Planning Department. The developer has to advise the Planning Department of the sizes of the individual units and that of the jointly-owned property when he applies for a building permit.

Notes

1 When a building consists of at least five units, even if the building with all its units has been acquired by single owner, it constitutes a jointly-owned property.

2 Each jointly-owned building must (by law) have a Management Committee for the regulation and management of its affairs.

Further reading

Law and Regulations for jointly-owned buildings in English – The Immovable Property (Tenure, Registration and Valuation) (Amendment) Law of 1993 – 6(1) of 1993

Cyprus house price index falls 0.3 per cent

Nigel Howarth
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Cyprus house price index falls 0.3 per cent

THE CYPRUS Statistical Service (CYSTAT) has announced that prices for houses and apartments in Cyprus fell on average by 0.3 per cent in the third quarter of 2017 compared to the second quarter in its latest House Price Index (HPI).

The HPI also reports that residential property prices have risen by 0.6 percent on an annual basis.

According to CYSTAT’s press release, the House Price Index “captures all types of residential properties, both new and existing”.

Year Quarter House Price Index
(2010=100)		 Quarterly Change
(Compared to the previous quarter) (%)		 Annual Change
(Compared to the same
quarter of the previous year) (%)
2017 Q1 99.64 -3 2.4
Q2 102.74 3.1 3.6
Q3 102.46 -0.3 0.6
Q4
2016 Q1 97.29 -2.1 -0.2
Q2 99.18 1.9 -1.4
Q3 101.87 2.7 -0.6
Q4 102.72 0.8 3.3
2015 Q1 97.52
Q2 100.59 3.1
Q3 102.49 1.9
Q4 99.4 -3
2014 Q1 98.08 -2.7 -6.2
Q2 103.55 5.6 -1.2
Q3 102.7 -0.8 2.8
Q4 101.56 -1.1 0.8
2013 Q1 104.54 -3.4 -1.7
Q2 104.77 0.2 -1.2
Q3 103.05 -4.7 -9.3
Q4 100.78 0.9 -6.9
2012 Q1 106.4 -1.1 -4.6
Q2 106.02 -0.4 -7
Q3 110.14 3.9 -1
Q4 108.22 -1.7 0.6
2011 Q1 111.56 -0.4 -2.5
Q2 113.99 2.2 1.1
Q3 111.22 -2.4 -1
Q4 107.6 -3.2 -4
2010 Q1 114.37 -1.6 -6.6
Q2 112.79 -1.4 -6.9
Q3 112.39 -0.4 -5.7
Q4 112.05 -0.3 -3.6

 

Larnaca port and marina contracts

Nigel Howarth
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Larnaca port and marina contracts

CONTRACTS for Larnaca port and marina project are expected to be signed in 2018, The Cyprus Minister of Transport, Communications and Works Marios Demetriades said when he visited the port on Monday.

In his statement to the press the Minister said “We hope that the process will move as fast as possible to implement this great project that will change the lives of Larnaca citizens.”

The ministry is in discussions with three foreign consortia, two of whom have already arrived in Cyprus for consultations with the ministry and site inspections.

Demetriades advised that the decision for the preferred investor will be announced in March and contracts will be signed later this year.

A new plan for the Larnaca port and marina was announced by the Transport Ministry in January 2017. According to reports the marina is set to be the largest in Cyprus, with the new 1,000 berth marina and port involving a development of up to 510,000 square meters and could include the construction of a large number of small to medium-sized apartments, a few luxury villas, a hotel, offices and a commercial centre.

Cyprus is in a favourable position to act as a stop for cruise ships, being in the eastern Mediterranean, it is a single day’s sailing from destinations such as Rhodes, Crete, Antalya, Marmara, Alexandria and Port Said.

Government striving for Title Deeds solution

George Psyllides
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Government striving for Title Deeds solution

Cyprus Title Deeds fraudTHE GOVERNMENT is trying to expedite a bill hoping to resolve the “very important” Title Deeds issue, Interior Minister Constantinos Petrides said on Tuesday as he cautioned that it was a complex legal issue that had to be examined thoroughly.

Petrides was responding to a written question by Akel MP Giorgos Loucaides regarding the government’s intentions on the matter.

In a bid to sort out the so-called trapped property buyers mess, parliament in 2015 passed a government bill granting the head of the land registry the authority to exempt, eliminate, transfer and cancel mortgages and or other encumbrances, depending on the case and under certain conditions.

The law sought to resolve the problems created by the failure to issue Title Deeds to people who had paid for their property, either because the property was mortgaged by the developer, or the state could not go ahead with the transfer because of outstanding taxes.

Since developers’ land and buildings were counted as assets that need to be offset against their debt to banks, this gave lenders a claim on people’s properties that had been mortgaged by developers.

However, following a string of court decisions in cases where banks objected to the law, the land registry suspended procedures, as authorities contemplated their next move.

The attorney-general subsequently instructed the departments involved to continue implementing the law while appeals were filed at the Supreme Court, which will have the final say on the matter.

Some of the court cases have been won by the banks, largely on the grounds that the buyer’s claim on the property infringed on the contract between the bank and the developer.

But in September, the Larnaca district court upheld the 2015 law, allowing trapped property buyers to obtain their Title Deeds irrespective of the developers’ own commitments to banks.

In his reply, Petrides said despite the matter not being resolved, the ministry had prepared a bill which it sent to the Legal Service for processing last October.

“As it transpired from the differing district court decisions, it is a complicated legal issue and due to this an in-depth study is required,” the minister said.

The bill will be forwarded to the cabinet as soon as it is processed by the state’s lawyers and from there to parliament for voting, he added.

“The Interior Ministry considers the issue of trapped buyers as very important and the delay in preparing the bill is due precisely to the difficulties cited above,” Petrides said, adding that efforts were being made to expedite the process.

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