Cyprus Property Forum for Buyers, Sellers & Investors

Hello All,

I am new here so apologies in advance if any of the questions have been asked before. As a matter of fact I am sure all of them must have been asked at some point in the life of this forum.

I will jump right in:

1. Aphrodite Hills, which is a massive development near Paphos, started to charge me the Immovable Property Tax only in 2011, although I had the house since 2006. The first time they mentioned this charge was in August 2011. But the period they asked for the charge to be paid for was 2006-2010, and then since 2011 they have been asking for it every month.
a) Why did they not ask for it before, back in 2006, but instead charged for all of the years since 2006 in 2011 only.
b) Why did it go up so much in the last 4 years!? I mean A LOT.
c) If I understand it correctly, once I receive the Title Deed all of the payments that I will have made to the Developers will be refunded? Once this is done what will I be charged for the Immovable Tax going forward? How to calculate this?
d) Has anyone around here had problems with Aphrodite Hills or are they one of the 'good' ones in Cyprus? A lot of stories on this forum strike me with horror so now I would like to know if I am in any kind of poop.

2. I have been given an option to finally buy the title deed from them back in 2011. However, I have not done it yet because back then it looked like a huge amount of money to pay as a one-off large sum, especially taking into account that the market in Cyprus went to hell and my mortgage in Swiss Francs became a Sisyphean torment which seems to never end.
a) Would you guys strongly recommend to get this Title? If so, then why?
b) Is it possible to sell a house ex-Title Deed taking into account that the Title is available for purchase no problem?

Thank you everyone for taking your time reading this. I hope some of your will have answers to these rather tedious questions that I have.

Cheers,

Andrey

Hello Andrey and welcome to the forum.

There are a lot of misconceptions about 'buying Title Deeds' - if you want to buy them, they cost €10.

What you were asked to pay back in 2011 were the 'Property Transfer Fees'; a government tax and the Cypriot equivalent of the Stamp Duty Land Tax (SDLT) that we pay in the UK when a property changes hands.

Until you pay this tax:

1. The property is not yours and it remains in the ownership of the company from whom you purchased (the developer).

2. You are unable to enjoy the full benefits of home ownership.

Because you chose not to pay the Property Transfer Fees, its owner (the developer) has to pay the local taxes relating to the property and then recover those charges from you. And because Immovable Property Tax (IPT) is calculated in the total 1980 values of all the properties registered in your developer's name, the rate at which he pays will probably be the maximum - 1.9%.

The top rate of tax has increased steadily and more than doubled in 2013 following the agreement Cyprus reached with the troika of international lenders.

For years 2006 to 2011, the top rate was 0.4% - in 2012 it doubled to 0.8% - and in 2013 it more than doubled to 1.9%.

If you read through your Sale Agreement, it probably 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.”

This makes you liable to refund the developer taxes he has paid for the property you purchased from the time you took delivery.

I don't know why your developer didn't bill you each year - maybe they forgot. It's a matter you'll need to discuss with them.

Once you have secured ownership of the property, by paying the Property Transfer Fees, at which time ownership (title) to the property will be registered in your name, you can apply to the Inland Revenue to recover any legitimate overpayments of IPT you have made since taking delivery of the property. You will probably be able to recover all the IPT you paid for years 2006 - 2012 (inclusive) plus the majority of the IPT you paid for 2013.

I can't say how much your IPT will be, but to give you some idea, my wife and I paid about €320 last year for a 220sqm. 3-bed bungalow with a 55 sqm. double garage and storeroom block set in just under an 800sqm. plot of land. (It was less than one month's Council Tax that we paid in the UK 12 years ago).

It is possible to sell a property without Title Deed, but there will be complications in your case because it does have Title Deeds but you declined to transfer ownership of the property to your name in 2011.

There's a couple of articles in my Cyprus Property News that you should read:

Refunding developers’ Immovable Property Tax. (Which explains IPT and how it is calculated - plus the information the developer is required to provide you so that you may to submit a claim to the Inland Revenue to recover any overpayments once you've paid the Property Transfer Fees).

Money off your Immovable Property Tax bill. (Which explains how to calculate last years IPT and submit a return).

Please note that the Immovable Property Tax rates for this year (2014) have yet to be set. The Land Registry is revaluing all properties are the intention is that this years tax will be calculated on present day values.

Regards,

Yes Andrey,you can claim back the IPT you paid to your developer once you get your title deeds.We where told this and duly went about it...What a nightmare in paper work (mostly in Greek)..However our nightmare is over now because we simply give it up.And we know of many others in the same position.In fact we do not know anyone who has been succesfull.So my advice is dont rely to much on getting your IPT back when looking at your financies.

Hi footy123

I know of several people who have managed to reclaim IPT overpayments from the Inland Revenue Department.

However, many people are unsuccessful because their property developer refuses to provide them with the necessary paperwork to support their claim. That is why it is absolutely essential that people insist that their developer supplies them with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property before they hand over any money.

Please refer to this letter from the Interior Ministry.

If people hand over money without having first received this information:

1. There is no guarantee that their developer will use the money to pay the company's Immovable Property Tax liability.

2. They will be unable to recover any overpayments of Immovable Property Tax they may have made.

Regards,