Taxed on olive tree he does not own

Olive Tree TaxALMOST ten year ago a Greek friend who was living in Cyprus at the time sent me a poem about olive trees.

Although I found it quite amusing, it contains more than an element of truth as you will see from the article that follows:

I bought a field in Cyprus where grew an olive tree,
I watered it and pruned it with assiduity,
Until I found I owned the ground
But did not own the tree.

So I bought the tree, for weeks I thought
The haggling would not stop.
Now I can pick my olives, and start a little shop.
Oh No, they cried, you bought the tree but not the olive crop.

At least I can sit under it, a little seat I made,
Where I could smoke a cigarette and drink some lemonade;
But no, although the tree was mine
I did not own the shade.

In my despair, I cut it down, if not for shade or food,
It might provide a cheerful fire
If that was all it could . . .
Alas, although I had the tree, I did not own the wood.

And now the bizarre story about a Cypriot man who was forced to pay property tax on an olive tree he doesn’t own.

Man forced to pay tax on olive tree that isn’t his

A TAXPAYER has decided to pay the property tax on an olive tree he does not actually own because setting the record straight would cost him much more.

Olive trees have long had a special status as property in Cyprus because of their potential to bring in a significant income to their owners. There have, however, been cases were a piece of land belonging  to one individual contains olive tree or trees belonging to someone else.

A Phileleftheros reader told the paper that he had been notified to pay a €1.50 levy on his property tax notice this year. He later checked his property tax for last year and saw the same olive tree tax fee.

When he approached Tax Department to seek an explanation, the man was told that his wife appeared to have inherited an olive tree in the Paphos district village of Droushia in 1954 and that was what they were being taxed on.

The man explained that his wife had not even been born in 1954 and had also not taken on his surname, which would indeed have given her the same name as the person who actually had inherited the tree according to the Tax Department’s papers.

“The Tax Department did not cross reference its information further and sent us the notice for the property tax on the olive tree,” the taxpayer said.

The taxpayer acknowledged that the woman who did inherit the tree and who shares his surname may be a distant relative because his family has roots in Droushia. The fact she has the same first name as his wife is a coincidence.

He was later told by a department employee that the only way to solve the issue would be to ask the community leader of Droushia to investigate and even confirm the olive tree still exists at all.

In the end, the taxpayer decided it would be cheaper to pay the €1.50 than go to the expense of taking a day off work to travel to Droushia to investigate, the paper said.

Nicosia protest against foreclosures

Foreclosures protest in NicosiaBRANDISHING placards reading ‘No home should go to the bankers’, some 250 people gathered outside the presidential palace in Nicosia on Thursday, protesting against coming bank foreclosures of residences and business premises.

The demo was organised by the ‘Movement Against Foreclosures’, a self-styled non-partisan group that is part of the ‘Society Reacts’ platform.

Supporting the event were AKEL, EDEK, the Citizens Alliance and the Green Party, as well as the small shopkeepers’ association POVEK and trade unions PEO and DEOK.

The demonstrators handed a memo with a set of demands to a member of the presidential guard with the request that it be delivered to president Nicos Anastasiades.

Among their demands, that the legislation be amended so that borrowers with loans of up to €500,000 be allowed to seek court protection for their homes and businesses.

As it stands, the law affords the ability to seek court protection for loans of up to €350,000.

The demonstrators demand that this protection be afforded to owners of primary residences, small business premises and agricultural land plots.

They also want a drastic cut on interest rates, and that loan guarantors be let off the hook.

“Borrowers and guarantors, even their children, are now at the mercy of the banks’ appetites, and there is an imminent danger that they will lose everything,” the memo stated.

The demonstration began at the finance ministry around 4.30pm, after which the group walked to the presidential palace.

Police were deployed outside the presidential palace. The demonstration passed without incident, with the participants dispersing by around 6pm.

Editor’s comment

Before the end of the year real estate auction are planned to be held in Nicosia – 14 October, Paphos – 12 October, Larnaca – 14 October and Limassol – 25 October.

First casino resort for Cyprus

First Cyprus casinoTHE MULTINATIONAL consortium consisting of the companies Melco-Hard Rock and Cyprus Phassouri (Zakaki) Limited, has submitted its detailed proposal for the creation of casino resort in Cyprus.

In its press release Melco International Development Limited reports “Capitalising on Melco’s unique experience in creating the most spectacular integrated resorts in Asia, as well as Hard Rock’s proven track record of delivering differentiated hospitality driven experiences across the globe, the consortium looks forward to collaborating with the Cyprus Government to establish a world class integrated casino resort that will be beneficial to the economy and tourism of Cyprus”

The consortium plans to build the proposed casino resort in Limassol. Its licence will allow it to operate a casino license for 30 years (as a monopoly for the first 15), while the group plans to build and operate a luxury 500-room hotel offering up to 1,000 slots as well as 100 table games and a satellite casino and three slot-machine parlours at other locations.

Providing the consortium’s proposal satisfies the government, construction work is expected to start in the first quarter of 2017 and with a capital investment of over €500 million it is expected to create thousands of jobs.

Hard Rock International has venues in 71 countries, 168 cafes, 23 hotels and 11 casinos. Beginning with an Eric Clapton guitar, Hard Rock owns the world’s greatest collection of music memorabilia, which is displayed at its locations around the globe. The company owns, operates and franchises cafes in numerous cities including London, New York, San Francisco, Sydney and Dubai. It also owns, licenses and/or manages hotel/casino properties worldwide. Destinations include the company’s two most successful Hotel and Casino properties in Tampa and Hollywood, as well as other locations including Bali, Chicago, Cancun, Ibiza, Las Vegas, Macau and San Diego.

Cyprus Phassouri (Zakaki) Limited (“CPZL”), is a member of the CNS Group which, amongst others, conducts different businesses including real estate, telecommunications, dairy, large scale farming and export and mining in Cyprus. The group has a chain of hotels in Greece and the AKS Annabelle Beach Resort on the Greek island of Crete.

Troika: reforms must accelerate

FOLLOWING its first post-programme surveillance mission to Cyprus, staff of the EC and the ECB made the following statement:

“The reforms undertaken by Cyprus during the programme have started to bear fruit with robust economic growth and positive developments in the financial sector. Fiscal consolidation has been crucial for strengthening the credibility of the policy framework and facilitating market access of the sovereign. It is important to safeguard these achievements, including by withstanding the increased expenditure pressure. We note that the reform momentum has significantly weakened, with crucial legislation still awaiting adoption. Therefore, the mission encouraged the authorities to renew their efforts on this front to improve Cyprus’s growth potential and attract more foreign investment.

Economic growth in 2016 has been stronger than expected, supporting fiscal performance.  Growth has been driven by tourism and private consumption, which was supported by the effect of declining prices on real income and improving labour market conditions. Real GDP growth in 2016 is expected to exceed 2½%, and to remain strong in 2017. Unemployment is perceptibly declining, albeit long term and youth unemployment remain very high. Fiscal consolidation has continued and the government’s 2016 primary surplus target for 2016 is within reach. With the improved economic environment, the pressure for fiscal relaxation has increased. This should be resisted as fiscal risks remain significant; and because the downward path of public debt still remains to be firmly anchored. It is essential that legislative steps with a budgetary impact, such as the abolition of the immovable property tax, be compensated through well-specified measures at all government levels. In light of the fiscal risk, the mission underlined that fiscal discipline needs to be pursued, including by containing the public sector wage bill.

Accelerated loan restructuring efforts and the more supportive economic environment have led to a decline in the outstanding stock of non-performing loans (NPLs). However, NPLs remain at a very high level. The return of confidence has allowed banks to broaden their deposit base, improve liquidity and capital buffers. Their profitability, however, is constrained by a declining net interest margin and the need for additional provisioning. While new lending is strengthening, total credit to the economy continued to contract due to necessary balance sheet deleveraging, including through loan write-offs and restructurings. The mission underlined the need to pursue more forcefully the loan restructuring efforts, by making full use of all available tools, in order to accelerate the pace of reduction of NPLs.

The new insolvency and foreclosure frameworks are important achievements, but their implementation has to be stepped up. These tools are essential to help reduce the high levels of private debt and NPLs, as they provide debtors and creditors with diversified and efficient means to resolve unviable debts and reallocate economic resources to more productive uses. Their use has been limited so far due to the increasing recourse to debt-to-asset swaps, which is welcome; but also due to slow administrative capacity building and the reluctance of some stakeholders to engage in time-consuming procedures. The mission highlighted the need to increase administrative capacity and strengthen the efficiency of legal proceedings, in order to facilitate the use of the insolvency and foreclosure frameworks.

The pace of structural reform has considerably slowed. In the view of the mission, it is crucial to renew the reform momentum, including by legislating critical, but much delayed reforms. This includes key areas, such as public administration and the national health system. To further improve the business environment and attract more investment, progress needs to be achieved in key areas such as setting up a sustainable and efficient title deeds transfer system, modernising the justice system, and pursuing the efforts towards privatisation and the reform of the electricity market.

“The mission would like to thank the Cypriot authorities and the IMF for their constructive and open discussions. The next PPS mission will take place in spring 2017.”

(Cyprus is now subject to six-monthly post-programme surveillance (PPS) until at least 75% of the financial assistance it received has been repaid.)

Property sales up 44 per cent

Cyprus property sales up 44%PROPERTY sales in Cyprus increased by 44 per cent in September compared to September last year according to the latest official figures published by the Department of Lands and Surveys.

During September a total of 556 contracts for the sale of commercial and residential properties and land (building plots and fields) were deposited at Land Registry offices across the island; an increase of 44% over the 385 sold in September last year.

September’s increase follows a 50% increase in August, a 26% increase in July, and a 42% increase in June.

Of those 556 contracts, 77% (427) were deposited by domestic (Cypriot) purchasers, while 23% (129) were deposited by overseas (non-Cypriot) purchasers.

The number of contracts includes ‘non-sale’ agreements such as loan restructurings, recoveries and debt-to-asset swaps agreed between the banks and defaulting borrowers. As these ‘non-sale’ agreements are not recorded separately, there is no clear picture of the actual demand for property in the domestic (Cypriot) market.

During September sales rose in all district compared with September 2015. In percentage terms:

  • Sales in Limassol rose 71%
  • Sales in Larnaca rose 42%
  • Sales in Paphos rose 40%
  • Sales in Nicosia rose 25%
  • Sales in Famagusta rose 7%

Total Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 46 45 83 88 86 61 60 37 65 64 60 54
2016 54
79
82
79 82 98 102 64 81
Famagusta 2015 16 27 17 17 21 33 45 14 30 29 33 42
2016 22
35 33
35
24 34
27 41  32
Larnaca 2015 90 71 98 67 68 111 95 75 85 87 111 114
2016 78
108 121
127
103 120
123 81  121
Limassol 2015 95 97 160 115 135 135 156 87 114 166 137 169
2016 92
179 197
166
145 222
220 129  195
Paphos 2015 74 85 94 94 95 124 140 88 91 117 105 134
2016 81
100 106
107
120 183
153 136 127
Totals
2015 321 325 452 381 405 464 496 301 385 463 446 513
2016 327
501 539
514
474 657
625 451  556

Year to date performance

During the first 9 months of 2016 property sales have risen 32% to reach 4,644 compared with 3,530 during the corresponding period last year.

Sales have increased in all districts. Sales in Limassol have risen 41% and by 29% in both Larnaca and Famagusta. Sales in Paphos and Nicosia (the capital) have both risen by 26%.

Domestic property sales

Property sales to the domestic (Cypriot) market in September rose 64% compared to September 2015, with sales reaching 427 compared with 261 in the same month last year.

Although sales in Famagusta fell by 12%, they rose in all the other districts.

In percentage terms Paphos led the way with sales rising by 109% compared to September last year, whiles sales in Limassol, Larnaca and Nicosia rose by 75%, 70% and 36% respectively.

Domestic Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 39 36 71 74 74 58 56 36 55 60 50 44
2016 43
70
10
69 68 92 94 58 75
Famagusta 2015 9 2 16 16 9 30 28 14 25 24 24 41
2016 20 31 21
33
24 7 19 32  22
Larnaca 2015 77 49 91 40 45 82 60 62 53 59 81 81
2016 68 96 85
91
93 75 91 67  90
Limassol 2015 71 77 147 90 86 100 123 65 81 127 82 123
2016 68 158 145
122
126 162 156 101  142
Paphos 2015 39 38 86 64 34 63 83 64 47 92 71 89
2016 61 72 59
65
105 126 74 88  98
Totals
2015 235 202 411 284 248 333 350 241 261 352 308 378
2016 260 427 382
380
416
462
434 346  427

Year to date performance

Domestic sales during the first nine months of 2016 are up 38% compared with the first nine months of 2015 with sales reaching 3,534 compared with 2,565 during the corresponding period last year.

Sales have risen in all districts. Sales in Paphos have risen by 44%, while sales in Famagusta and Limassol have risen by 40%. Sales in Larnaca and Nicosia have risen by 35% and 28% respectively

Overseas property sales

Property sales to the overseas (non-Cypriot) market during September were disappointing rising just 4% compared with September 2015 with 129 properties being sold compared with 124 in the same month last year.

Property sales in Nicosia, Paphos and Larnaca fell by 40%, 34% and 3% respectively. But on a brighter note sales in Famagusta rose 100% to reach 10 and sales in Limassol rose by 61% reaching 53.

Overseas Property Sale Transactions – 2015/2016 Comparison

District Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Nicosia 2015 7 9 12 14 12 3 4 1 10 4 10 10
2016 11
9
10
10 14 6 8 6 6
Famagusta 2015 7 25 1 1 12 3 17 0 5 5 9 1
2016 2 4 12
2
0
27
8 9  10
Larnaca 2015 13 22 7 27 23 29 35 13 32 28 30 33
2016 10 12 36
36
10
45
32 14  31
Limassol 2015 24 20 13 25 49 35 33 22 33 39 55 46
2016 24 21 52
44
19
60
64 28  53
Paphos 2015 35 47 8 30 61 61 57 24 44 35 34 45
2016 20 28 47
42
15
57 79 48  29
Totals
2015 86 123 41 97 157 131 146 60 124 111 138 135
2016 67 74 157
134
58
195
191 105  129

Year to date performance

Overseas sales during the first nine months of 2016 are up 15% compared with the first nine months of 2015 with sales reaching 1,110 compared with 965 during the corresponding period last year.

With the exception of Paphos, where sales have fallen by 1%, they have risen in all the other districts.

Sales in Limassol have risen 44%, while sales in Larnaca and Nicosia have risen by 12% and 11% respectively.

Cyprus Property Sale Transactions 2000 – 2016

Year Overseas Sales Domestic Sales Percentage
Overseas Sales
Total
Sales
2000 450 12,214 3.6% 12,664
2001 1,207 12,849 8.6% 14,056
2002 2,548 14,111 15.3% 16,659
2003 3,981 15,294 20.7% 19,275
2004 5,384 11,947 31.1% 17,331
2005 6,485 10,106 39.1% 16,591
2006 8,355 8,598 49.3% 16,953
2007 11,281 9,964 53.1% 21,245
2008 6,636 8,031 45.2% 14,667
2009 1,761 6,409 21.6% 8,170
2010 2,030 6,568 23.6% 8,598
2011 1,652 5,366 23.5% 7,018
2012 1,476 4,793 23.5% 6,269
2013 1,017 2,750 27.0% 3,767
2014 1,193 3,334 26.4% 4,527
2015 1,349 3,603 27.2% 4,952
2016 (Sep) 1,110 3,534 23.9% 4,644
Totals
57,915 139,471 29.3% 197,368

Gary Robb ordered to pay £1.6m tax

FORMER night club boss Gary Robb, aged 54, was ordered to repay £1.3m last year after he defrauded 57 victims into buying Greek Cypriot owned properties in the occupied areas of Cyprus. Not a single house in the Amaranta Valley was completed by his firm AGA Developments.

In last year’s landmark civil recovery action the NCA used the 2002 Proceeds of Crime Act to take the money from the scammer and have it returned to his victims.

Using tax powers under the act, the NCA has now successfully argued that Robb was liable for £1.6m made up of tax assessments, penalties, national insurance and unpaid interest on his income from drug dealing.

In 1997 Robb fled to Cyprus after allowing his nightclub, the Colosseum in Sunderland, to be used to supply cocaine, amphetamine and cannabis.

In 2009 he was forcibly removed to the United Kingdom, where he was arrested, convicted and in 2010 sentenced to five years imprisonment.

In 2011 he was extradited to Cyprus under a European Arrest Warrant where the Nicosia District Court convicted Robb on 11 charges relating to the appropriation of exploitation of Greek Cypriot owned property in the occupied areas and sentenced him to 10-months in jail.

Following last year’s ruling at the Royal Courts of Justice Donald Toon, director of the NCA’s Economic Crime Command, said the agency did everything it could to deprive crooks of assets won from criminality.

Today, he said: “The NCA is tenacious in using every legal avenue available to hit crooks where it hurts.

“In this case we have used our unique tax powers under part six of the Proceeds of Crime Act to pursue Robb for his profits.

“It might seem unusual that a drug dealer can be penalised for not paying tax and interest on his earnings but this is a powerful and important tool to reduce the funds which can otherwise be diverted into supporting further criminality.”

The NCA alleged that Robb received between £5,000 and £10,000 per week from the drugs trade at the Colosseum which was then spirited out to Cyprus.

Robb appealed against the NCA’s tax assessments and penalty determination but it was dismissed by a tribunal on the 16th September.