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Property boom fills state coffers

Editorial
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STATE revenue has shot up as a result of the property boom in the first four months of 2007, further smoothing Cyprus’ Euro aspirations.

Figures released yesterday show revenue from capital gains tax has shot up to CYP 81.6m in the first four months of 2007 – a massive 206% jump (CYP 54.9m) over the same period the previous year.

Capital gains tax is imposed on profits resulting from the sale of immovable property and is usually a reliable tracker of developments in the property market.

The cash boost helped push the Inland Revenue Department’s revenue to CYP 311.4m in the period January-April 2007, up CYP 104.4m or 50.4% over the same four months of 2006.

Receipts from corporate tax surged by 69% or CYP 19m to CYP 46.6m. The defence levy generated CYP 75.6m for the state coffers- 22.8% or CYP 14.1m more than the same period last year.

Salaried employees chipped in with CYP 78.8m – CYP 11m or 16.3% more than the first four months of 2006.

In contrast, the self-employed paid only CYP 5.4m in income tax over this period – 13.1% or CYP 800,000 less than the previous year.

Copyright © Cyprus Weekly 2007

Record year for Cyprus property transactions

Editorial
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2007 APPEARS set to be a record year for property transactions, as statistics for the first three months alone show £560 million worth of property sales.

Last year was the year with the most amount of money changing hands in property transactions, with £1.7 billion spent to buy property. With sales showing no signs of falling, the £560 million spent from January until the end of March this year indicate that this year will exceed the total value for 2006.

Moreover, 2007 could be a record year in relation to the amount of money in loans Cypriots have taken from banks. The last five years has seen a constant increase in mortgage loans.

Since 2002, banks have shelled out £15 billions in loans, nine of which have been paid back.

The last two years (2005 and 2006) have recorded a total of around seven billion pounds in mortgage loans. In the first three months of 2007 a total of £1.3 billion has been taken.

This massive increase in loans can be attributed to the enlarged demand in the housing market, but most of all to the competitive loan packages offered by the banks in the last two years.

According to the report published by Simerini, a total of £5.5 billion has changed hands in the five years from 2002 to 2006, with 185,861 properties changing hands.

Nicosia still marginally tops the property demand list with Limassol coming in a close second.

In the first three months of 2007, Limassol has continued its increasing trend in property transactions and is staking its claim as the most popular place to buy property on the island.

In the first three months of the year, 1,572 transactions took place in Nicosia with just 47 less for Limassol.

By Nassos Stylianou

Minister acts to stop illegal dealing in Cyprus land

Nigel Howarth
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THE GOVERNMENT has been forced to take action against a businessman using insider information to buy vast amounts of land at low prices knowing that his purchases would soon double in value.

On Friday, Interior Minister Neoclis Sylikiotis cancelled certain provisions that were announced last May regarding the upgrading of rural land to urban land in Paphos after suspicious purchases began taking place in the area.

The minister used his authority, according to Article 34A of Land Registry Legislation, to alter a decision that had been made by the cabinet with regards to the upgrade of properties for two villages in Paphos.

Speaking to reporters yesterday, Sylikiotis said, “We have received complaints from some of the communities about the land purchases. In light of the information, I then requested an investigation… we want to send the message that the government will not tolerate these kinds of tactics.”

The minister also sent a notion of caution to the residents of the area saying, “I call on the residents and people to be careful with regards to the buying and selling of land in the area because with the investigation now taking place, new alterations could still take place again.”

Government officials became suspicious by the actions of the businessman who was buying vast acres of rural land at low prices. After just a few years, the land was upgraded to urban land, more than doubling the value of the property.

The land that was being snapped up on the cheap was in the areas of Pano Arodes and Neo Chorio.

An investigation into the property buying revealed that for the past two to three years, the businessman had bought a vast amount of private land and a small amount of state owned land.

Although they were bought at low prices their values soon shot up when the land was later upgraded to a holiday home zones.

The unsuspecting landowners who had sold their properties to the businessman did not have any idea that their properties were soon to be converted into zones that could be used for building holiday homes.

The minister demanded an inquiry from the Land Registry Department as well as a full report on the buying and selling of land in the area for the last three to four years.

He had also received complaints from the land owners who felt they had been “cheated”.

According to Politis, the businessman at the heart of the mass purchasing is a close relative of a high-ranking official working at the Land Registry Department and that he was being fed insider information on property upgrades.

It is also believed that the same official in the department had pushed for upgrading the area.

By John Leonidou

Copyright © Cyprus Mail 2007

Cyprus Home Price Index up 1.8 percent in May

Nigel Howarth
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The index is published monthly by BuySell Cyprus Real Estate, a real estate advertiser.

The company started to produce its price index in 2004. It shows the movement of prices at which residential properties in Cyprus are sold and is based on an average of around 400 to 500 home sales/month.

When the index started in January 2004, the average residential property price was CYP 77,910. By the end of May 2007, it had reached CYP 97,064 – an increase of 24.58% over the 41 months since its introduction. This equates to an approximate annual growth of 7.19%.

For the whole of 2006, the Home Price Index rose by 5.9%, following a rise of 2.5% in 2005.

In the first 5 months of 2007, the home price index has risen by 4.04%

Ombudswoman Blasts Cyprus Land Registry

Nigel Howarth
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OMBUDSWOMAN Eliana Nicolaou stated yesterday she would be launching an investigation into the Cyprus Land Registry Department after allegations of mismanagement.

Speaking at the House Committee on Institutions, Merit and the Commissioner for Administration, Nicolaou informed members that there appeared to be vast flaws in operations at the Land Registry Department, which works under the Interior Ministry.

These included long-term delays in the issuing of permits and Title Deeds – something which has also resulted in countless complaints from the public.

“Bigger problems,” continued Nicolaou “have been discovered at the Town Planning Department, in which it has been revealed that permits are being granted without the legal requirements being fully satisfied.”

The Ombudswoman also noted that when it came to local area plans, the problems were “insurmountable“.

First published 12th January, 2007

Copyright © Cyprus Mail 2007

Property Owners Lobby for their Rights

Jean Christou
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HOME owners have announced the launch of the Cyprus Property Action Group (CPAG), the first-ever organised pressure group set up to lobby for their rights.

Dennis O’Hare, one of the founders of the CPAG, which also launched its own website earlier in the week, said the idea kicked off in Peyia in discussions with the local council, which in December saw the election of its first foreign-born representative.

“Most of the expats who came to us had property problems. We had a meeting and decided to start an action group to give them some help,” said O’Hare.

“We are reasonable people and polite and do not want to cause a fuss. We want to work courteously and constructively. We do not want to be a bunch of moaners.”

O’Hare said the CPAG would not be limited to Peyia and that the group had already been contacted by thousands of people.

“The more people we talked to, the more contacts we got so we decided to get organised. We are not here to scream and shout. We want to work with the industry. We are all in this together,” he added. He said there were huge problems with buying property in Cyprus and that people’s lives have been ruined.

“Anyone can be a developer, and we know of someone who sold a house to a couple and decided not to finish it. Now, they are being threatened by these people when they say they want to do something about it. These people come here to retire and this is not an isolated example.

“There are many, many more people really suffering and they have no clue where to turn,” he said.

The situation was particularly tough on retirees, O’Hare said. He said many of them came here after being made to believe the law was the same as in the UK.

“But it’s not, and some people get into trouble through no fault of their own. We even know some people who have been trying to get their Title Deeds since 1968.”

Leading CPAG are O’Hare, elected Peyia councillor Linda Leblanc, businessman David Ball, and Nigel Howarth, a business consultant.

The group has already talked to the Interior Minister and been contacted by people in the industry who want to work with them.

“Our first task is to quantify the problems and build up a database of several thousand people,” said O’Hare. “There were people who were petrified to talk but now we have given them the strength to do that.”

The CPAG can be contacted at http://www.cyprus-property-action-group.net, but because some retirees in Cyprus might not be internet savvy, O’Hare said, they can also send their written statements to PO Box 62427, Paphos 806

Copyright © Cyprus Mail 2007

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