is this true??

General questions & discussions on Cyprus property related matters
Post Reply
rugbyboy
Posts: 4
Joined: 19 Jan 2017 01:06

is this true??

Post by rugbyboy »

I am told this by my lawyer!!?? Yet the receipt for 550Euros appears to be not in my name but that of the Assignees¬¬¬¬

"According to the regulations regarding Assignment Agreements the Assignor always pays the Land Registry fees not the Assignees, other expenses such as Stamp Duty, Transfer fees etc. Assignee pays."

Advuces please??

Thank you
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: is this true??

Post by Nigel Howarth »

Good morning rugbyboy and welcome to the forum.

Your lawyer is correct. As you're selling a property that has yet to be issued with a Title Deed your purchaser will use an 'assignment agreement'. It's the assignor who pays for this agreement to be lodged at the Land Registry.

The charge is 0.5% of the contract sum in your sale agreement or your purchaser's assignment agreement (whichever is higher), subject to a maximum charge of €50 and a maximum of €3,000.

(Based on a fee of €550 you are either selling for €110,000 or you bought for €110,000.)

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
rugbyboy
Posts: 4
Joined: 19 Jan 2017 01:06

Re: is this true??

Post by rugbyboy »

Yes Thank you so much! I sold for this amount!

Happy to have sold!! :)
rugbyboy
Posts: 4
Joined: 19 Jan 2017 01:06

Re: is this true??

Post by rugbyboy »

[HERE IS AN EMAIL I GOT TODAY FROM THE DEVELOPER!!

WHAT DO YOU THINK>

I HAVE A VALUAATION DATED 11/2 /2004 saying value of property at 01/01/1980 was 4000 pounds.

Another issued which they base their valuation on is 19500 Euros dated 19/04/2011!

Which on should their calculations be based on or is it a mix of both???

Here is what they wrote to me!!"


!Regarding the documents you have required please note that we can provide you with a calculation on how your IPT has been calculated, and give you a proper receipt when we receive payment. We do not have individual receipts on our payments for your property as the way we are taxed is by filing our additions of land and construction value each year on a cumulative basis, for all our holdings. Even if we refer to the deed of the land upon which your property has been constructed, this says nothing as one has to account for the subsequent annual construction additions in completing the project, and those are not separately identifiable on our returns.



Your calculation is as follows:



In its annual tax return the developer pays Property Tax and given that Aristo has many properties, payment is made at the highest rate of 0.4% for the years 2005-2011, 0.8% for the year 2012 and 1.9% for the year 2013.



The calculation for this tax is based on the value of your property as at 01/01/1980 (please see title deed attached).

Delivery Date: 11/08/2005

That means that you have been charged Property Tax for 8 years and 5 months.

2005: €19,500 * 0.4% * 5/12 = €32.50

2006-2011: €19,500 * 0.4% * 6 = €468.00

2012: €19,500 * 0.8% = €156.00

2013: €19,500 * 1.9% = €370.50



Also there is the annual Local Authority Tax which is charged by Peyia Municipality and it is 0.15% of the value of the property as at 01/01/1980. It is charged from the year that the title deeds where available i.e. 2011.



€19,500 * 0.15% * 6 = €175.50



We will be able to supply you with the Tax Clearance certificate for 2013 as soon as you arrange an appointment for transfer with the relevant Department in order to obtain your title deeds.



This is the tax that we have paid on your behalf and for which we can give you a receipt in order for you to apply for any refund that you may be eligible for, as provided in the contract.

THANK YOU SO MUCH FOR YOUR HELP!!
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: is this true??

Post by Nigel Howarth »

Good morning rugbyboy,

The IPT calculations are correct - you can view the rates applicable for different years at Immovable Property Tax Rates.

Until the property is registered in the name of its purchaser, its vendor (Aristo) is the registered owner and has to pay IPT on this property and all the others registered in the company's name. This calculated on the total 1980 values of those properties - and as Aristo is a big company, this will be many millions - and so it will pay IPT at the top rate.

But when you paid the IPT from 2014 onwards, you will have paid tax at the lowest rate. (But you will have paid at a much lower rate - 6‰ (0.6%) as the total 1980 value of the properties you purchased was €19,500.

(I suspect the CYP 4,000 was the 1980 value of the land. Cyprus adopted the Euro on 1 January 2008 and the exchange rate was fixed at CYP 0.585274/€1.00).

I cannot say whether the figure for the local property tax paid to Pegeia is correct as each Community/Municipality sets its own rate. However, a rate of 0.15% is not unreasonable for a Municipality. (I live in a Community and I'm charged at 0.2%).

However, as you're selling the property I'm afraid you will be unable to recover the IPT you have paid to Aristo as its deed has not been issued and the property will never be registered in your name.

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
rugbyboy
Posts: 4
Joined: 19 Jan 2017 01:06

Re: is this true??

Post by rugbyboy »

Thank you for this information. So Just 2 short questions.

Are they entitled to ask for IPT from me even before the Title Deed became available in 2014?

Are they correct in calculating it for the whole period based on 19500 even though it appearsthis amount was not set until 2014. Should it not be based on the 4000CYP from 2005 to 2014?

I appreciate your advise
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: is this true??

Post by Nigel Howarth »

rugbyboy wrote: 20 Jan 2017 10:23 Are they entitled to ask for IPT from me even before the Title Deed became available in 2014?
You'll need to check your contract of sale. If it contains a clause similar to the following...

"From the date of delivery of the Property to the Purchasers, the Purchasers shall be obliged to pay all taxes or rates corresponding to the Property in proportion to the whole project during the period prior to the registration of the Property in the name of the Purchasers."

then you are contractually obliged to pay.
rugbyboy wrote: 20 Jan 2017 10:23 Are they correct in calculating it for the whole period based on 19500 even though it appears this amount was not set until 2014. Should it not be based on the 4000CYP from 2005 to 2014?
The reason it was set in 2014 was because either (a) Aristo advised the Land Registry as they were required to do following a change in the law. or (b) you went to the Tax Department and gave them details of the property so that they could assess its 1980 value and send tax demands to yourself.

As you took delivery in 2005, its value then would have been €19,500.

Regards
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Pantheman
Posts: 807
Joined: 26 Jan 2008 14:44
Location: Famagusta District
Contact:

Re: is this true??

Post by Pantheman »

Nigel Howarth wrote: 19 Jan 2017 09:16 Your lawyer is correct. As you're selling a property that has yet to be issued with a Title Deed your purchaser will use an 'assignment agreement'. It's the assignor who pays for this agreement to be lodged at the Land Registry.
Sorry I don't agree. If anything, the seller should actually pay this charge since he cannot produce title deeds. Before the assignment method came about the seller had to pay thousands to the developer for a cancellation agreement. Now some people deem it correct to load this charge to the buyer. I don't agree with this.

What has been happening more of late, that the charge is shared to make it fairer to both, but, IMHO, the seller ought to pay this as a cost to sell.
For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Real Estate Company. Reg. No. 1145, Lic. No. 572/E
Member of ETEK Registration No. A201999
https://www.fsbproperties.com
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: is this true??

Post by Nigel Howarth »

Hi Pan

The assignor is the seller (the buyer is the assignee).

Regards,
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Pantheman
Posts: 807
Joined: 26 Jan 2008 14:44
Location: Famagusta District
Contact:

Re: is this true??

Post by Pantheman »

Nigel Howarth wrote: 22 Jan 2017 18:02 Hi Pan

The assignor is the seller (the buyer is the assignee).

Regards,

Oops! :oops: :oops: So we agree. Well that's already then :-))
For all your property needs, we offer Trust, Integrity, Honesty.
FSB Properties Ltd
Registered and Licensed Real Estate Company. Reg. No. 1145, Lic. No. 572/E
Member of ETEK Registration No. A201999
https://www.fsbproperties.com
Nigel Howarth
Site Admin
Posts: 2911
Joined: 24 Oct 2007 14:38
Location: Erimi, Limassol, Cyprus
Contact:

Re: is this true??

Post by Nigel Howarth »

:-) :-) :-)
Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news
Post Reply