All-party MP group to help property buyers

Nigel Howarth
-
10

The Houses of Parliament (photo by Adrian Pingstone)
The Houses of Parliament (photo by Adrian Pingstone)
A MEETING was organised in Parliament this week to discuss the plight of many hundreds of UK buyers who are facing legal action by banks in Cyprus and who are at risk of losing their homes.

It was attended by ten MPs or their representatives including Mark Lazarowicz, Paul Goggins, Simon Kirby, James Wharton, and representatives from the offices of Fiona Bruce, Bill Cash and Roberta Blackman-Woods. They were joined by a group around 25 people facing legal action by the banks in Cyprus.

In an interviews with The Northern Echo Durham City MP Roberta Blackman-Woods said: “The meeting was held to set up an all-party group with relevant MPs to try and pressurise the Cypriot government into looking at what’s happened to people who have got caught up in this scheme.

“The people who have come to me are extremely distressed because they haven’t got the house in Cyprus and their banks have issued writs against them.

“They are really, really worried.”

Stockton South MP James Wharton said: “We had a good discussion about what we can do.

“Obviously the role of MPs is limited when there’s a legal process on-going but we have agreed to set up an all-party group.”

Mr Wharton urged anyone affected to contact their local MP.

He added: “We want as many people as possible to engage with us so we can put pressure on the government of Cyprus and look to see what the Foreign Office can do.”

Hundreds of people who bought properties in Cyprus have been unable to keep up with rocketing payments on mortgages taken out in Swiss francs.

They are now being issued with writs by the banks which could ultimately mean they lose their UK homes.

Town Planning Amnesty further extension agreed

Nigel Howarth
-
8


YESTERDAY, at the plenary session of parliament, a majority of MPs voted approved two items of legislation further extending the Town Planning Amnesty to April 30, 2013.

The amnesty, voted through in March last year, is designed to sort out some of the problems affecting an estimated 130,000 properties that have yet to be issued with their Title Deeds.

The amnesty allows owners of houses and apartments to ‘legitimise’ planning infringements (on payment of a fine) and secure a Final Certificate of Approval and subsequently, the Title Deed.

Only ‘minor’ infringements – such as closing up a balcony or building a garage – may be legalized in this way. The amnesty excludes cases where irregularities affect third parties or encroach on state property, or for flagrant violations such as the building ratio having been exceeded by 30 per cent or more.

In cases of flagrant violations, the owner will be barred from selling the property although they will be able to bequeath it in their Will.

The amnesty only applies to “existing buildings” which, according to article 10D of the Streets and Building (Revised) Law 2011, are those that have a Planning and/or a Building Permit (although they may have expired). The building must have been completed before the above law came into force on April 7, 2011.

By May this year some 11,000 Statements of Intent had been submitted under the provisions of the Town Planning Amnesty and the Cyprus Interior Minister, Eleni Mavrou, said that “this cannot be considered satisfactory” when she spoke to the House Interior Committee.

Since May, a further 3,000 Statements of Intent have been submitted.

Tax hike may trigger land sales

Nigel Howarth
-
13

SPEAKING to the Cyprus Mail yesterday Pavlos Loizou, a consultant and member of the Cyprus Royal Institution of Chartered Surveyors (RICS), commented on the government’s property tax hike proposals (for details see Tuesday’s report ‘Property tax set to increase‘).

Mr Loizou said that although home owners will now be called on to pay more tax, it is property developers, and those with considerable property to their name who will be most impacted.

Loizou said that some (property developers) may not have liquidity to pay taxes but he hailed the fact that the changes will give some property developers an incentive to sell their land banks. “Anyone who buys property will have an incentive to do something with it rather than let it sit,” he said, adding “Look at Nicosia with its empty plots.”

Having property in the heart of a city and not doing anything with it forces people to move further out and spend more time and money commuting, and forces the government to build more roads, install more street lights and the like, he said.

One of the proposals contained in the troika draft memorandum to the Cyprus government was to “Ensure additional revenue from property taxation of at least €20 million.” The counter-proposals put forward by the government set the level at €29 million/annum.

Equitable property taxation needed

At the present time, Cyprus’ Immovable Property taxation system is inequitable.

Once a house has been built on a plot of land and included on the Title Deed, the Land Registry reassesses the property’s 1980 value and updates the Title Deed accordingly. Obviously, this value will be more as it now made up of the 1980 value of the land plus the 1980 value of the property/building that has been constructed on that land – and it is this value that is used to assess a property owner’s Immovable Property Tax liability.

But the system is inequitable as there is no legal requirement to add a house or any other building on a plot of land to its Title Deed, thereby depriving the state of much-needed revenue – and it’s all perfectly legal!

Furthermore, as local property taxes paid to the Community are also based on the Land Registry’s 1980 valuation, local government loses out as well.

It’s been estimated that some 50% of buildings island-wide have not been to Title Deeds.

Shouldn’t the Government set a level the playing field so that any tax increases can be shared equitably by all those owning property?

Luxury property sales weathering the storm

Nigel Howarth
-
12

Luxurious Cyprus villa
DESPITE the beleaguered state of Cyprus’ real estate market, its impact on the sale of luxury and high-end properties has not been so apparent – especially in Limassol.

According to recent research into residential property costing more than €2,000,000 it seems that large projects, especially in Limassol, are weathering the storm quite well.

The research shows that during the first half of 2012, 14 of the 16 residential properties costing €2+ million that were sold island-wide were situated in Limassol.

In Paphos between 2009 and 2011 a total of 14 properties costing more than €2 million were sold. However, in the first half of 2012 only one €2+ million property was sold.

In Famagusta between 2009 and the first half of 2012 just three €2+ million properties were sold (one of which was during the last quarter).

High-end sales in Larnaca are similar to Famagusta with 3 properties being sold over the last three and a half years (although there have been no sales yet in 2012).

Nicosia has not performed as well with only two high-end properties being sold; one in 2011 and a second in 2012. The report’s authors consider that this is due to the fact that more than 90% of purchases are made by Cypriots – and because many of them choose to build their own home than buy from a property developer.

Further reading

Focusing on Cyprus’ Luxury Real Estate Dynamics by Leaf Research

Property tax set to increase

Nigel Howarth
-
9

FOLLOWING our report earlier this month concerning a possible increase in Immovable Property Tax, the Cyprus government submitted a bill to parliament earlier today designed to raise an additional €29 million/annum in much needed state revenues.

According to the report that accompanied the bill, the island-wide revaluation of property will take three years and the interim solution proposed by the bill is to increase the tax rates based on the assessed 1980 value of property.

The proposed revised tax rates are as follows:

Assessed 1980 Property Value
Proposed Tax Rate
Up to ?€40,000 nil
From ?€40,000 to ?€120,000 0.30%
From €?120,000 to €?170,000 0.40%
From €?170,000 to €?300,000 0.90%
From ?€300,000 to €?500,000 1.00%
From ?€500,000 to ?€800,000 1.10%
More than ?€800,000 1.20%

The hike in Immovable Property Tax was included in the package of measures that the government submitted to the troika last week.

It is estimated that the lowering of the threshold from the present €120,000 to €40,000 will affect many property owners who were previously exempt.

According to the bill, the economic impact will be small for the vast majority of taxpayers.

However, for the owners of multiple properties, such as property developers with large numbers of unsold properties on their books, the tax increase will amount to thousands.

According to the Ministry of Finance there are about 3,500 people with property valued at over €300,000 and about 1,000 with property valued at €800,000 or more.

Charges to Immovable Property Tax were last implemented in January this year, when the tax-free threshold was reduced from €170,000 to €120,000 and tax rates were increased.

The government said that this tax is only the beginning. “Due to the immediate need to strengthen government revenue, it is necessary and urgent to adopt a scenario that will enable the increase in government revenue from taxation of property”, it said.

A well-known local authority on property matters suspects that 50% of private buildings/houses have not been registered on the Title Deed by their owners. As a consequence many of these owners will manage to avoid paying these increased taxes.

Why is the EU withholding information?

Nigel Howarth
-
22


SIR GRAHAM Watson, MEP for South West England and Gibraltar, recently asked a question in the European Parliament concerning the Secretary-General’s refusal to provide ‘Person X’ with documents relating to immovable property in Cyprus.

Question for written answer E-008346/2012
to the Commission
Rule 117
Sir Graham Watson (ALDE)

Subject: Access to documents in EU-Cypriot case concerning immovable property in Cyprus

Person X applied to the Secretary-General of the Commission on 16 July 2012 for access to certain documents related to the correspondence that has taken place between the Commission and the Cypriot authorities since 2011 concerning immovable property in Cyprus.

He had previously requested these documents from Vice-President Reding, but had been informed that her DG could not supply these documents because pre-infringement proceedings had been initiated against Cyprus: however, Person X could apply to the Secretary-General of the Commission for them.

However, in response to his application to the Secretary-General, Person X has now received a letter refusing his application and stating that disclosure of the documents could jeopardise the on-going search for an amicable solution to the dispute.

Can the Commission provide fuller information as to why Person X is unable to access the requested documents?

Who is Person X and why is the EU withholding information?

1...468469470...695Page 469 of 695