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Equity release in Cyprus

Nigel Howarth
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I wonder if you can help please. The falling value of the pound against the Euro means that we have much less money coming in every month and we are now finding it quite difficult to make ends meet. A number of our friends who have also retired here are in a similar situation.

Can you tell me if there is any organisation in Cyprus that will buy your property and let you stay there until you die or leave. I know they do it in the UK.

Answer

There are a lot of people feeling the pinch. When we moved here in 2002 we were getting 93 cents for £ 1 sterling, but today you’ll get slightly less than €1.24 (about 73 cents) for your Pound Sterling.

As far as I’m aware, there are no companies in Cyprus that offer equity release schemes of any kind. The only thing I can suggest is that you speak with your bank and perhaps have a word with an independent financial advisor to see if they can offer some suggestions to ease your financial situation.

Top 10 tips on making a Will in Cyprus

Louise Zambartas
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NOBODY likes to think about making a Will, but whenever you have a major change in your family or financial circumstances you need to think carefully about what provisions you have in place to protect your loved ones.

The laws of succession in Cyprus are not the same as in the UK – or elsewhere in Europe – and it is for this reason that when you move to Cyprus, or buy a property here it is really important to review and update your Wills.

Here are my top ten tips on making a Will in Cyprus.

Tip 1 – Don’t avoid the issue altogether!

As I have already said, nobody likes to think about this subject – but if you avoid taking action then you could leave your family and loved ones exposed in the future. Making a Will can mean that your wishes are adhered to, help to prevent family strife, make the administration of your estate much simpler (and cheaper) and (if incorporating tax planning) can also substantially reduce the amount of tax payable on death.

Tip 2 – Know your rights

In Cyprus, it is possible for a person who (or whose father) was born in the UK or in a Commonwealth country to make a Will to determine who will inherit his estate in Cyprus. If you do not fall within this category or if you do not make a Will then your property in Cyprus will be governed by the Cypriot rules of forced heirship.

Tip 3 – Speak to someone who knows

If you own assets in more than one country then your individual circumstances need to be carefully considered by a lawyer who knows the laws of the countries involved. Find a lawyer who is experienced in both countries!

Tip 4 – Think about tax

There is no estate duty in Cyprus for Cypriot domiciles (see Tip 5 below) – but if you are domiciled in the UK, then regardless of the location of the assets, you will be taxed on your worldwide estate – this will include your property in Cyprus. At 40% on anything above the nil rate band – this can be hefty!!! Thankfully there are ways to plan your estate tax efficiently when making your Will – careful planning can reduce (or even remove) liability!

Tip 5 – Think about your domicile

From Tip 4 you can see that domicile is a crucial matter to determine when making a Will. Your domicile is the country you were born in – unless you actively change it – and this is not easy to do. If you live in Cyprus, but are not Cypriot, you need to seek legal advice to ascertain where you are currently domiciled.

Tip 6 – Forget legal jargon

It is my opinion that the best kind of Wills are simple and clear – don’t let your lawyer draft something you don’t understand.

Tip 7 – Don’t assume the formalities are the same

The formalities for making a valid Will in Cyprus are not the same as in the UK or another European country – make sure you are given correct advice on how to sign.

Tip 8 – Don’t rely on your Will abroad

Whilst a Will from your home country might be able to govern your Property in Cyprus, this would mean that the Will would need to be “re-sealed” out here. This can be costly and time consuming. I always advise my clients to make a separate Cyprus Will.

Tip 9 – Register your will at the court

In Cyprus you can register your Cypriot Will at the Court. This is a very safe place to store the original document!

Tip 10 – List your assets

I advise my clients to keep copies of all documentation relating to their estate together somewhere safe. When the time comes it will be quicker and easier to deal with the estate if it is clear what assets you have.

The biggest mistake you can make with Wills is to avoid the subject altogether – don’t assume your wishes will be adhered to unless you have made them clear in a Will!

By Louise Zambartas LLB (Hons) Law

Louise is a dual qualified practising English Solicitor and Cyprus Advocate and has established The Law Offices of Louise Zambartas; she lives and works in Limassol. I am grateful to Louise for allowing me to publish her article; I urge all Cyprus property buyers to follow her sound advice.

Over the coming weeks, I’ll be publishing more hints and tips by Louise. In the next one, she’ll be giving us her top legal tips on buying land in Cyprus.

The Law Office of Louise Zambartas is a specialist team of Cyprus Property Lawyers comprising English Solicitors and Cyprus Barristers dedicated to dealing with conveyancing in Cyprus and associated legal work.

Cyprus property tax receipts plummet

Alan Lawton
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ACCORDING to press reports, a decline in Cyprus property prices has resulted in a spectacular fall in Government revenue.

During the first four months of 2008, Capital Gains Tax receipts fell by 17% to €116.18 million from €139.42 over the same period last year. Meanwhile, property revenue plummeted by a massive 25% to €1.5 million from €2 million a year ago.

Briton loses half a million in property fraud

Bejay Browne
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Scam AlertTWO men were remanded in custody in Paphos yesterday on suspicion of defrauding a British resident of Peyia out of nearly half a million euros in a bogus property transaction.

Police had arrested three men in connection with the case on Monday night. The three are understood to have been the middleman in the transaction, who was responsible for introducing the two parties, and two other Cypriot nationals posing as vendors of the land in Limassol.

The British man claims he handed over the cash in the belief that he was buying a plot of land in Limassol, but neither the men nor the land materialised after the huge sum of money had passed hands.

The three suspects were brought before Paphos central court yesterday morning and the middleman was released without charge. The other two suspects, one from Limassol and one from Paphos, were remanded in custody for four days, while Paphos CID continue their investigations.

A number of similar incidents have occurred in the past and have sparked authorities to warn would-be purchasers to thoroughly check out any deals before handing over any sums of money.

In 2006, a Limassol-based lawyer fled the country after defrauding a number of mainly British clients in similar frauds totalling £3.6 million. Police have issued international arrest warrants for the man.

Copyright © Cyprus Mail 2008

London property protest

Jean Christou
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A GROUP of British expats frustrated with the judicial system in Cyprus protested at Alexandra Palace London on Sunday where President Demetris Christofias was addressing a gathering of UK-based Cypriots.

The protest was led by Conor O’Dwyer, 38, from Surrey who bought a house off plan in Cyprus in 2005 and has since entered in to a lengthy legal battle with the developers.

Unable so far to receive justice in Cyprus, O’Dwyer decided to take his protest to London during Christofias’ visit at the weekend. Holding placards calling for justice and an end to corruption, the protestors camped out in front of the venue.

O’Dwyer was joined by the relatives of expats in Cyprus who are also experiencing legal difficulties over properties they have purchased on the island. Problems include non issuing of title deeds, structural faults, illegal building, or developers extorting immovable property tax and transfer fees, they say.

O’Dwyer said yesterday the protest went very well.

“We didn’t see the President ourselves but hundreds of guests came past our protest stand and accepted leaflets,” he said.

“Some were shocked at the severity of the cases represented but few were surprised with problems like the issuing of title deeds as their own families had fallen victim to this trap.”

He said the protestors were highlighting a broad range of issues and said it would be good to have the future support of the London Greek Cypriot community.

“Yesterday [Sunday] was a nice introduction,” he said.

O’Dwyer was badly beaten in Frenaros in January this year after taking photographs outside the house he owns in the village. The developers who sold him the property, and with whom he is engaged in a legal dispute, were later arrested and charged with assault. O’Dwyer, who details his entire case on the website lyingbuilder.com and on YouTube, spent over a week in Larnaca hospital.

Copyright © Cyprus Mail 2008

The property bubble

Dr Alan Waring
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IN PARALLEL with the tourist decline, the property boom in Cyprus went into reverse from 2005 onwards.

Nevertheless, over that period we have seen countless articles and utterances seeking to deny first that there is a problem at all and, when that position became untenable, to bluster that the problem was minor and temporary. Cyprus has always bucked the trend elsewhere, the argument went. We never had a property crash in Cyprus like the UK did in the early 1990s so it was ‘obvious’ that conditions here are so different that we never could! And what with such brilliant developers, luxury properties and superb climate and attractions, there was simply no way that the foreign buyers would stop coming. Despite the glaring facts, many continue with this fantasy.

Consider the following:

  • Many large developers and agents will admit privately that they have not sold a property in 2008 and, in some cases, for over 12 months.
  • The buyer famine began long before the recent credit crunch hit the UK, as awareness of property fraud risks and the Land Registry delays in obtaining title deeds became widespread. The financial woes of UK buyers and the Euro/sterling exchange rates have merely sealed their continued absence.
  • A report by the Cyprus Property Action Group described as ‘absolute dynamite’ has been sitting on the desks of the Ministers who commissioned it. The new Finance Minister has apparently been advised that without government action UK buyers should be regarded for the foreseeable future as a dead market for Cyprus.
  • Recently, executives in one bank in Cyprus were summoned to a ‘crisis meeting’ (sic) to discuss plans to deal with a possible wave of loan defaults by developers.

In desperation, at least half a dozen of the larger developers took the initiative in 2006-7 to seek new buyers in three countries: Iran, Russia and UAE. They sought to create property sales pipelines into Cyprus. For example, advertising hoardings in Persian can be seen in such places as Oroklini, Pyla and the departure check-in at Larnaca International. Special visitor visas were issued to buyers so that they could come and go to enjoy their properties. For 18 months all went well and new buyers were coming in from the Middle East and Russia. Sounds too good to be true?

Now, the Immigration Department has added another deterrent to foreign tourists and property buyers. Any poor soul ‘unlucky’ enough to require a visa for Cyprus, unless travelling via a tour operator and pre-booking hotel accommodation, now requires a resident sponsor in Cyprus who has to cough up an €854.30 bank guarantee – each and every time they wish to come here. Yes, this includes all those property buyers from the Middle East and Russia! So, suddenly, they have vanished.

Was this the result of a coordinated governmental policy? Were all the consequences clearly considered beforehand? While the CTO and developers search desperately for new ‘warm bodies’ from Russia, the Middle East and Asia, the Immigration Department or whoever is busily undermining their respective missions. Is the Finance Minister aware of the impact on government coffers and the economy? Was he consulted? Do we have joined-up government?

Crisis? In Cyprus? What crisis?

Dr Alan Waring, international risk management consultant ([email protected])

©2008 Alan Waring

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