Paphos mayor in court today (Update)

Editorial
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Savvas-Vergas-Paphos-mayorPAPHOS Mayor Savvas Vergas will appear in court on Thursday to hear charges of conspiracy to commit a crime, related to SMS messages sent from the mobile phone of a municipal worker to several people involved in a major property fraud case.

Vergas, too, was allegedly one of the recipients of the threatening text messages that were tracked down to the smartphone held by municipal marketing officer Maria Solomonidou, wife of a draftsman working at Aristo Developers, who is the centre piece of the whole scandal.

The smartphone was purchased by the mayor and ended up in his aides hands to help her with her workload, Vergas had said in earlier statements.

However, investigators triangulated the transmission of the text messages and believe that the mayor and Solomonidou were in the same location when the threats were sent out.

Aristo founder and former Bank of Cyprus Chairman Theodoros Aristodemou, as well as his architect wife Roulla, were released last week after being held in connection with a land zoning case involving a major development in the Strakka area of Paphos, where the company allegedly altered plans in order to gain usable land and make more money. Similar allegations have been put forward regarding the commercial use and parking lot allocation at the King’s Mall project in Kato Paphos.

Aristodemou claims he and his wife are innocent and that they are the victims of a vicious attack against his company.

Two Paphos municipal employees were also held during the investigations, for aiding in the alteration of the land zoning documents, with investigators finding amounts in their bank accounts that had been unaccounted for or unjustified.

Meanwhile, Maria Solomonidou is also embroiled in another case involving a concert given in summer by pop star Sakis Rouvas, as the company in which she appears to have an interest never paid the municipality the fees it had promised, according to complaints filed by another municipal councillor.

Update 17 October 2014

The Paphos district court remanded Savvas Vergas in custody for four days following a seven hour hearing. The police had requested an eight-day remand, but the court decided this was excessive.

Vergas, the Paphos mayor, faces charges of conspiring to commit a felony, conspiring to commit a misdemeanour, sending written death threats, interfering with a court procedure and sending harmful texts.

The court said there was a ‘plausible link’ between Vergas and the charges levelled against him.

No foreclosure law no money

George Psyllides
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No foreclosure law no money
President of the Eurogroup Jeroen Dijsselbloem
President of the Eurogroup Jeroen Dijsselbloem

INTERNATIONAL lenders will release the next tranche of financial assistance only once Cyprus puts in place an effective foreclosures framework in line with the terms of its bailout agreement, a senior EU official said on Monday.

“Putting these legal provisions in place … is of course essential to make progress with the high level of non-performing loans (NPLs) in Cyprus, including large corporate loans, and to return Cyprus to financial health,” Eurogroup President Jeroen Dijsselbloem told a news conference.

The European official was referring to four bills passed by opposition parties that limit the scope of a foreclosures bill aimed at tackling rising NPLs – a prerequisite for the disbursement of the next tranche of financial assistance worth close to €500 million.

President Nicos Anastasiades has referred the bills to the Supreme Court, which will rule on their legitimacy later this month.

Rejection of the bills by the Supreme Court would open the way for the assistance and get the island’s bailout obligations back on track.

Cyprus has passed four previous reviews with flying colours but the matter is set to delay completion of the fifth.

Dijsselbloem said an effective framework for private debt restructuring “remains an important pending issue that prevents the conclusion of the review”.

The remainder of the process will be handled by the Eurogroup working group.

State broadcaster CyBC quoted Finance Minister Harris Georgiades as saying that the economy could go on for a few more months without the tranche.

Speaking in Washington DC where he attended the International Monetary Fund summit over the weekend, Georgiades said his interlocutors fully understood that it was inevitable to have some delay and political difficulty in implementing such a demanding reform programme.

“Without this meaning that financing could go on without resolving the problem,” Georgiades said.

“But I emphasised that it did not affect the implementation of the programme in general, or the gradual improvement of the economy,” he added.

The minister reiterated that Cyprus could stop relying on troika financing earlier than expected.

“I consider the objective fully feasible,” he said. “From the moment that Cyprus has succeeded in returning to the international markets and all basic indicators, like public debt, and public deficit, exceed the targets, and credibility is restored.”

However, Georgiades emphasised that the effort for reform and consolidation would not stop prematurely.

“On the contrary, the fact that we have the first concrete results, with the recession ending gradually and unemployment falling for the first time in years, it should give us the confidence to continue,” he said.

Encouraging property sales

Nigel Howarth
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Encouraging property sales

PROPERTY sales in Cyprus increased for the seventh consecutive month in September compared to the same period last year according to the latest figures from the Department of Lands and Surveys.

During September a total of 373 contracts for the purchase of ‘immovable property’ (i.e. commercial and residential properties and land) were deposited at Land Registry offices across Cyprus; a 31 per cent increase on the 285 contracts deposited in September last year.

Of those 373 contracts, 107 (26%) were deposited in favour of overseas buyers, while the remaining 266 (74%) were deposited in favour of domestic buyers.

With the exception of Nicosia, where the number of sales fell 27%, sales improved in all other districts compared to last year. Sales in Paphos increased by 76% and those in Limassol rose 76%; sales in Larnaca and Famagusta rose 20% and 9% respectively.

total property sales sept 2014

Speaking to Stockwatch the vice president of the Cyprus Real Estate Agents’ Association Solomon Kourouklides said “people expected that the foreclosures bill would be approved and many rushed to make sales to service their loans. These are exceptional sales made by developers and individuals under unusual circumstances” and added “There is a second type of sales as well; some are trying to take advantage of falling prices in the property market.”

Year to date sales

During the first nine months of 2014 total property sales reached 3,328; an increase of 644 (24%) on the 2,684 sales achieved during the first nine months of 2013.

Sales in Limassol are up 50% compared to last year, while sales in Famagusta are up 37%. Sales in Larnaca are up 24% and sales in Nicosia have risen 16%; although sales in Paphos are up, their numbers have increased by a mere 4.2%.

Domestic property sales

Although domestic sales in September rose by 28% compared to last year, this increase was due a 184% increase in Paphos and a 51% increase in Limassol. Sales in Famagusta declined 50%, while those in Nicosia and Larnaca fell 33% and 17% respectively over the nine month period.

domestic sales sept 2014

Year to date sales

During the first nine months of 2014 domestic sales reached 2,442; an increase of 495 (25%) on the 1,947 sales achieved during the first nine months of 2013.

Sales in Limassol are up 60% compared to last year, while sales in Larnaca are up 17%. Sales in Nicosia are up 14% and sales in Paphos and Famagusta have risen 11% and 6% respectively.

Overseas property sales

Sales to the overseas market rose 31% in September compared to the same month last year. Sales increased in all districts with the exception of Paphos, once a British expatriate hot-spot, where the number fell to 37 from 40 last year; a drop of 8%.

Bearing in mind that overseas sales are trying to recover from a very low base, 15 sales were achieved in Famagusta (up 400%), 26 sales in Larnaca (up 189%), 7 in Nicosia (up 17%) and 22 in Limassol (up 16%).

overseas sales set 2014

Year to date sales

During the first nine months of 2014 sales to the overseas market reached 886; an increase of 149 (20%) on the 737 sales achieved during the first nine months of 2013.

Sales in Famagusta are up 124%, those in Larnaca are up 48%, while sales in Nicosia and Limassol are up 38% and 24% respectively.

However, sales in Paphos have fallen to 331 during the first nine months of 2014 from 352 during the same period last year; a fall of 6%

Aristodemou: trial date set (update)

Nigel Howarth
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Aristodemou: trial date set (update)
Paphos District Court
Paphos District Court

AT A hearing the Paphos District Court earlier today, the judge ordered that four of the five individuals initially detained in connection with the alleged Aristo Developer’s Skali land scam will be tried on 30th October.

The four detained are the founder and MD of Aristo Developers Limited, Theodoros Aristodemou, his wife Roulla, former municipal engineer Savvas Savva and Aristo draughtsman Christos Solomonides.

Solomonides has admitted forging documents that allowed Aristo to develop on a considerably larger land area at Skali, claiming that he did so under instructions by his superiors and that it was standard practice. (Solomonides works in Aristo Developer’s design department, which is headed by Roulla Aristodemou.)

The fifth suspect, Paphos Municipality technical officer Soulla Kouspou, was not charged and has agreed to appear as a prosecution witness when case goes to trial. It is unclear whether the charges against the 36 year-old will be dropped.

During today’s hearing, the prosecuting authorities demanded that all four defendants remained in custody until their trial date as they could influence the outcome of the investigation if released.

According to the state broadcaster CYBC, today’s hearing led to a strong reaction, primarily from Theodoros Aristodemou, his wife Roulla.

Before the judge entered the courtroom, Roulla Aristodemo called on those present to wake up since they themselves are the scapegoats in the case and others will follow.

There was also a heated exchange between Theodoros Aristodemou and the police who were asking him to calm down with Aristodemou declaring vociferously that he would not be gagged and bound by anyone.

Update Tuesday 7 October

The Cyprus Mail reports that the four suspects in an alleged attempt by land development company Aristo Developers to defraud the state were released under terms today, pending trial before a Criminal Court on October 30.

The court has adjourned briefly before reconvening to set the terms of the suspects’ release.

Immovable Property Tax payment and collections

Nigel Howarth
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FOLLOWING changes to the law, everyone who has purchased property in Cyprus is required to pay Immovable Property Tax (IPT) this year, regardless of whether they hold the Title Deed to the property.

Those without the deed to the property they purchased should complete a Form 318 2014 (English & Greek) and pay their IPT liability by 31st October to benefit from the 15% discount on offer. (Note that T.I.C and M.V. on the 318 refers to Taxpayers Identification Code and Market Value.)

Those who are not registered with the Inland Revenue here in Cyprus need to complete a Form I.R. 163A/2014 to register on the tax system.

Non-residents (who are not liable for Cyprus Income Tax) need to complete sections 4, 6, 10, 11, 12, 13, 16, 22 and in section 14 tick box 92 – Individual with Immovable Property obligation ONLY, plus their name, signature and date at the bottom of Form I.R. 163A/2014 – and should send the completed forms, together with a clear copy of their passport page showing their photograph and the passport number to: The Department of Taxation, 1472 Nicosia, Cyprus.

The Inland Revenue is opening a new file for each non-Title-Deed-holding IPT payer so that any discrepancies can be resolved between the vendor and the purchaser when the Title Deed is issued.

IPT collections to date

So far this year around 76,800 people have paid a total of €23.5 million IPT according to official figures, up from €22 million at the same time last year. But it appears that only those with modest properties have paid; if those with higher value properties and those with multiple properties had also paid, IPT collected so far would be closer to €34 million.

Speaking to the Phileleftheros, an Inland Revenue official said that the process of ensuring that IPT is paid has been hindered by property developers. Some have supplied incomplete lists of properties they had sold and some of the forms omitted the value of the property purchased, or ID of the purchasers or their addresses making them hard to trace.

Hasikos admits valuations mistakes

Nigel Howarth
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Hasikos admits valuations mistakesSPEAKING before the parliamentary Interior Committee, Interior Minister Socrates Hasikos admitted that mistakes had been made in updating 1980 property valuations to 2013 values.

He said that the government is considering extending the deadline for receiving objections from the end of 2014 to April 2015.

According to Hasikos 4,671 objections had been received at the end of September; 1,275 had been corrected and officers were continuing to examine the remainder. Approximately 7,000 further cases had been reported to the Citizens Service Centres. He said that the Land Registry will consider complaints involving large areas in the coming months.

The minister stressed that it was not necessary to include an independent valuation of the property with the objection.

He noted that it was inevitable that mistakes would be made as a revaluation exercise would require 400 staff dedicated to the task for a period of four years.

MPs have received hundreds of complaints.

A Paphos hotel valued at €6.5 million at 1980 values had been revalued at €162 million, while a bank had estimated its value at just €40 million.

A plot of land valued at €227,000 at 1980 values had been revalued at €76 million. Another plot of land in Paphos previously valued at €5,980 had been revalued at €706,000.

In August, the Cyprus Technical Chamber (ETEK) demanded that the Land Registry publish the criteria it employed to assess immovable property values for taxation purposes. Perhaps we now know why it did not!

Disputing 2013 valuations

Owners wishing to dispute their property’s 2013 value can file an appeal. The charge depends on the 2013 valuation of their property:

For properties valued up to €100,000, the charge is €37.50.
For properties valued between €100,001 and €500,000 the charge is €75.00.
For properties valued between €500,001 and €1 million, the charge is €150.00.
For properties valued in excess of €1 million, the charge is €357.00.

But regrettably, this is the way it is in Cyprus. You end paying up for the mistakes/incompetence of other people and government departments!

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