The Start of the Cyprus Title Deed Resolution Unearth More Fiascos
There has been a recent change in Cyprus courts whereby more title deeds are being issued at an increasing rate; although with some delay (at the moment roughly 4 or more years after completion), this encouraging progress has underlined some new issues relating to property transferals in Cyprus.
Transfer fees are calculated at a percentage of the value according to the appropriate property market rate. Currently no transfer fees are payable if VAT was applicable/paid at the time of purchase of the property in Cyprus. If no VAT was paid at the time of purchase, a 50% reduction is currently being offered.
Transfers of immovable property by a company to another company for the purpose of a company re-organisation are currently exempt from transfer fees.
The date of the valuation is taken as being the date of sale/acquirement. Intrinsically, if someone bought a property in 2002 and transferred it now in 2018, the transfer fees will be based on the market value in 2002 on the date of the acquisition.
Legislation states that the Lands Office must determine the value of the property on the relevant (sales) date, based on the current market value of the sale date. Generally the Lands Office accepts the actual sales price, however almost 20% of values are disputed by the Lands Office if they can ascertain from their own records that the current market value is different.
It is a well-known fact that many locals as well as foreign buyers under-declare their sales/acquisition price for the purpose of saving capital gains (by the vendor) and the consequent transfer fees (by the purchaser) which explains the Lands Office recent stance.
After the administrative fight to secure the deeds in the first place, it has now been ascertained that only 20% of the title deeds issued on the island have actually been transferred.
Do you have any questions regarding titles deeds for a Cyprus property? Contact us, we have property agents on hand that would be happy to assist.