April building permits up 30 per cent

Nigel Howarth
-
0

April building permits up 30 per centTHE NUMBER of building permits authorised in April 2016 stood at 437 compared with the 335 authorised in April last year; an increase of 30.4 per cent according to official figures released by the Cyprus Statistical Service.

Compared with April 2015, the total area of these permits rose 8.1% to 47.9 thousand square metres from 44.3 thousand square metres, but their value fell 10.9% to €53.4 million from €59.9 million.

During April, building permits were issued for:

  • Residential buildings – 295 permits
  • Non-residential buildings – 81 permits
  • Civil engineering projects – 14 permits
  • Division of plots of land – 42 permits
  • Road construction – 5 permits

Building permits for new homes

The 295 residential building permits approved in April provided for the construction of 201 new homes comprising 138 single houses and 63 multiple housing units (such as apartments, semis, townhouses and other residential complexes).

This is an increase of 36.7% compared with April 2015 when building permits were issued for the construction of 147 new homes.

Building Permits Issued for the Construction of
New Homes (Number of Dwellings)

Month 2015
(Dwellings)		 2016
(Dwellings)		 Increase/
Decrease		 %age
Change
January 204 243 39 19.1%
February 384 312 -72 3.0%
March 297 306 9 3.0%
April 147 201 54 36.7%
Total 1,032 1,062 30 2.9%

Year to date

During the first four months of 2016 the number of building permits authorised for both residential and non-residential projects has risen by 7.3% to 1,716 compared with the 1,600 authorised in the first four months of 2015.

The total value of these permits has fallen by 5.2% to €298.0 million and their total area has fallen by 4.9% to 279.3 thousand square metres, while the number of housing units has increased by 2.9%.

According to the Cyprus Statistical Service, building permits constitute a leading indicator of future activity in the construction sector.

Cyprus property prices recovering

Nigel Howarth
-
7
Cyprus property prices recovering
RICS-Cyprus-Property-Price-Index
RICS Cyprus Average Property Price Index

THE TWENTY-sixth edition of the RICS Cyprus Property Price Index issued earlier today reports that the average price of residential apartments and houses across the island rose by 1.2% and 1.5% respectively during the first quarter of 2016.

The Index reported price increases in almost all urban centres and all types of property, while prices in other urban centres are gradually bottoming out.

Famagusta recorded the largest increase in apartment prices (1.5%), while the largest increase in house prices (5.6%) was recorded in Paphos.

The value of retail properties fell by an average 0.5%, while the value of offices and warehouses increase by 1.5% and 1.2% respectively.

Compared to the first quarter of 2015, apartment prices have fallen by 0.2%, while house prices have risen by 0.6%. Prices of retail properties and warehouses have fallen by 1.3% and 2.3% respectively, while the price of offices has risen by 0.7%.

Given the prevailing economic conditions and the turbulence in the Cyprus banking system, there were relatively few transactions during the quarter of 2016 although volume was higher on a year on year basis.

Local buyers in particular were the most discerning as unemployment and high debt for locals maintained lack of interest. Furthermore, those interested are in purchasing property are trying to access bank-finance.

Rental Values

Across Cyprus, on a quarterly basis rental values increased by 3.6% for apartments, 1.8% for houses, 0.2% for retail, 0.4% for warehouses and office rents increased by 0.6%.

On an annual basis rents increased by 4.2% for apartments, 2.4% for houses and 2.4% for offices, while retail and warehouses dropped by 3.2% and 2.1% respectively.

Gross yields

At the end of the first quarter of 2016 average gross yields stood at 4% for apartments, 2.0% for houses, 5.2% for retail, 4.3% for warehouses, and 4.4% for offices.

The parallel reduction and/or stabilisation in capital values and rents is keeping investment yields relatively stable and at low levels (compared to yields overseas). This suggests that there is still room for some re-pricing of capital values to take place, especially for properties in secondary locations.

Broken promises over Pissouri land slippage

Antony Walker FRICS
-
2
Broken promises over Pissouri land slippage

Socratis Hasikos breaks promises over Pissouri land slippageON NOVEMBER 19, 2015 (reported in Cyprus Mail on 20 November 2015) you made a televised announcement that you were committing between 20 and 50 millions of euros to “clean up the mess” in Pissouri.

Since your announcement there has been no further information although conditions in Pissouri have deteriorated rapidly. Homes generally have been rendered valueless. Two homes have been condemned as unfit for human habitation and others will soon follow including at least one home with young children.

I request that the following information be provided for publication by The Cyprus Mail:

  • What progress has been made on design work for the necessary retaining structures and infrastructure work to arrest the land-slippage and for ground water management systems for upwards of 1000 homes?
  • Has design work been delayed by the extraordinary claim made by one of your officials to the effect that because he drafted part of a geological report at home he, and not the government that paid for the investigations, owns the intellectual property in the geological report?
  • When will the geological report be made available to experts acting for homeowners in Pissouri?
  • When will there be a public presentation in Pissouri of the proposed remedial works?
  • Has it been determined how many homes will be subject to compulsory purchase and demolition?
  • When do you anticipate that construction works will commence and what is the estimated date of completion?

I regret the necessity of writing an open letter but unfortunately letters addressed to you (even by recorded delivery) are simply ignored by your officials. This is something that I as an ordinary taxpayer have in common with the President of the Republic: his letters addressed to your ministry are also ignored.

Antony Walker FRICS
Pissouri

MEP questions Title Deed costs

Nigel Howarth
-
5
MEP questions Title Deed costs

Daniel Dalton MEP questions Title Deed costsTHE CYPRUS ‘trapped buyers’/’hidden mortgage’ law enables property buyers to get the Title Deeds for the property they purchased despite the fact that their transfer was blocked because their developer was either unwilling or unable to settle his relevant debts.

However some problems remain – in particular who pays for the work necessary to enable Title Deeds to be issued. Daniel Dalton, MEP for the West Midlands tried to get clarification on this particular issue from the European Commission.

Question for written answer E-002101-16
to the Commission
Rule 130
Daniel Dalton (ECR)

Subject: Title Deeds in Cyprus

With reference to Directive (EU) 2015/1208, adopted by the Council in July 2015, there appear to be a number of issues with British citizens being unable to obtain Title Deeds from the Land Registry in Cyprus in respect of an unfinished resort.

These problems are occurring for a number of reasons outside of the Land Registry’s control: the developer has not paid for a building permit, planning permission for the resort has not been renewed by the developer, and the developer has not completed the exterior works of the resort such as pavements and roads.

I understand that once a Certificate of Final Completion is issued, the Title Deeds are released. However, in this circumstance the residents have paid for the completion of a resort that is not eligible for Title Deeds, and therefore cannot obtain legal ownership. Although the Commission has assisted some owners, many others are experiencing problems.

Could the Commission confirm whether or not in its view these residents will be liable for the costs of completion if the Land Registry issues the Title Deeds for the resort?

The European Commission’s response

Answer given by Mr Moscovici on behalf of the Commission

The Commission has paid special attention to the issuance of outstanding Title Deeds and their subsequent swift transfer. According to the information available to the Commission, for properties bought before 2015, where the buyer has completed his contractual obligations and filed a corresponding request, transfers require only the issuance of a Title Deed, upon a certificate of final approval with no major violations of building and planning permits. In case of such violations, titles may sometimes be issued, but are ineligible for transfer to buyers until the violations are rectified.

Recent reforms seem to have widened the range of minor deviations tolerated from building and planning permits. In principle, liability for the rectification of non-tolerated deviations rests with the title holder, subject to confirmation by the relevant national authorities. The distribution and recourse of related expenses between buyers and sellers could likely depend on the specificities of the property purchase contracts between them. Within the programme, Title Deed issuance and transfer legal uncertainties have been reduced. However, some uncertainty remains, in particular, pertaining to developments with planning permit violations.

Under the scope of EU surveillance and technical assistance, the Commission continues to focus on the matter in cooperation with the Cypriot authorities. However, the resolution of specific cases remains fully within the realm and under the responsibility of Cypriot authorities and courts.

About Daniel Dalton

Daniel Dalton is a former cricketer and a Conservative Party politician in the United Kingdom who has been a Member of the European Parliament since January 2015.

Aristo settles Bank of Cyprus debt

Staff Reporter
-
0
Aristo settles Bank of Cyprus debt
Photo credit: Dolphin Capital Investors
Photo credit: Dolphin Capital Investors

ARISTO Developers announced on Friday it has come to an agreement with the Bank of Cyprus for the full repayment of all the Group’s loans, amounting to €283 million.

“Through a debt-for-assets swap arrangement, Aristo Developers transferred properties to the Bank, which, based on the valuations made by the Bank of Cyprus, amounted to at least €310 million,” a written statement said.

The company said the properties offered from the group’s vast “land-bank,” do not compromise the existing projects and the ongoing operations of Aristo Developers.

“Notably, a significant part of the large-scale Venus Rock Golf Resort project has been included in the exchange, the implementation potential of which is now increased and accelerated,” the company said.

The group said it “remains robust, with an impressive land portfolio in excess of six million square meters, boasting a development potential of hundreds of millions of euros in real estate.”

The current value of the company’s remaining assets exceeded €440 million, Aristo said. Total loans were around €110 million.

Following the debt settlement, all sold properties will be released from mortgage and any encumbrances, it added.

“Therefore, where separate title deeds have already been issued, all transfers to clients can immediately proceed; for projects where the title deeds will be issued at a later stage, all such deeds will be free of any obligations and will be readily transferrable.”

Further reading

Dolphin Capital Investors Limited Annual Financial Results for the year ended 31 December 2015 and Trading Update (Issued 30 June 2016)

Over 306,000 to pay Immovable Property Tax

Staff Reporter
-
3
Over 306,000 to pay Immovable Property Tax

Immovable Property TaxMORE than 306,000 taxpayers will be called on to pay Immovable Property Tax worth €65.3 million, if the new 0.05% property tax rate is passed by the House of Representatives.

The government expects to collect only €44.4 million of the €65.3 million due, however, due to a promised discount to those who pay their taxes on time, and the fact that only 85% of taxpayers paid their taxes during the past two years.

According to data submitted by the Ministry of Finance to the House Finance Committee, the 306,000 taxpayers correspond to 82.5% of the total, who would pay according to the new tax rate and at 2013 valuations. The value of immovable property on the basis of the 2013 valuations is estimated at €130.6 billion.

In addition, 65,000 tax payers, or 17.5% of the total, with immovable property valued up to €50,000 in 2013 prices, would be exempt from paying taxes on their property. The value of immovable property that is exempt from the immovable property law is close to €1.1 billion, said the Ministry of Finance.

Under the current tax law, immovable property is taxed progressively at 1980 prices. There are nine tax rates, spanning €6 per thousand to €19 per thousand. Immovable property valued up to €12,500 is exempt from taxation.

In 2015, 273,052 citizens and companies were taxed. Out of a total €127.5 million owed, the government collected €85.7 million out of 239,000 tax payers.

Big owners owe the most

Data show that large property owners still owe the largest amount in taxes. 376 owners of immovable property valued above €800,000 owe €12 million in tax out of a total of €21.8 million. In addition, 184 taxpayers with immovable property values up to €3 million owe €5.1 million, and 24 taxpayers with property of above €3 million owe €5.5 million.

In total, between 2013 and 2015 to government collected €284 million in Immovable Property Tax: €106 million in 2013, €92 million in 2014 and €86 million in 2015.

The government also collected €174 million from transfer fees: €53 million in 2013, €65 million in 2014 and €56 million in 2015. The government has suggested a permanent reduction of transfer fees by 50%.

The government is also proposing to abolish municipal and community taxes on immovable property. Between 2013 and 2015 local authorities collected €45 million: €14.7 million in 2013, €15 million in 2014 and €15 million in 2015.

Meanwhile, in a letter to the Minister of Finance, Harris Georgiades, and the president of the House Finance Committee, Averof Neophytou, the Cyprus Chamber of Commerce and Industry (KEVE) touches on a series of issues that are related to the Immovable Property Tax bills under discussion. The letter, signed by the General Secretary of KEVE, Marios Tsiakkis, states that the Chamber is in agreement with adopting a single tax rate of 0.05%.

However, regarding the way in which the value of the property is estimated, the Chamber finds mistakes, and suggests a number of changes, such as allowing taxpayers to submit an objection without any time restrictions. Objecting taxpayers would be called to pay their tax until the objection is settled and the difference paid.

Government warns of EU fine

Meanwhile, Cyprus is in danger of paying a €10 million fine for not complying with European regulations and putting in place a 19% VAT on the sales of plots of land for commercial activities.

According correspondence between Cyprus and the EU, the directive on VAT should have been implemented by the end of 2007, but the government has been requesting extensions since then.

In addition, according to the documents sent by the government to the House, the government will pay an additional €3.6 million fine for every six months that it does not comply with the EU directive.

Still, political parties express reservations over adopting the government’s tax bill, and requested more time until September to discuss the issue.

1...324325326...696Page 325 of 696