Cyprus Property Forum for Buyers, Sellers & Investors

Hi,
The deeds for our apartment in Larnaca has been available for quite some time and we've only just got around to asking the developers for the total cost involved in transferring the deeds to us.

We have received the following list of fees from them and wondered if anyone has any views on whether they're reasonable or not?

• Immovable Property Tax (€15.500 x 4‰) €62.00 x 3 years = €186.00 - not sure which years this was for so have asked. The same applies to the two subsequent IPT charges. The percentages seem very high to me?

• Immovable Property Tax (€15.500 x 8‰) €124.00 x 1 year = €124.00

• Immovable Property Tax (€15.500 x 17‰) €263.50 x 2 years = €527.00

• Sewage (€15.500 x 5‰) €77.50 x 6 years = €465.00 - As far as I am aware we're already paying the sewerage charges as part of our water bill.

• Land tax (€15.500 x 1.5‰) €23.25 x 6 years = €139.50 - Sorry for my ignorance, but I don't know what this is for?

• Interest €528.65 - I've asked the developers what the interest is based on and what it's for.

• Administration fees €300.00 - These seem very high to me, but I guess I need to check the contract to see what they state with regards to charging and admin fee when deeds are available?

€2,270.15 + the transfer fee which they've estimated at €3,490. The transfer fees seems high to me. I just checked using the on-line calculator and it seems the developer has estimated the value of our flat at around €104,000! If that's the case then great, but there is no way it's worth that much.

I've also requested records of the IPT amounts and certificate showing the rate of IPT for the property. If they can't provide this then where do we stand?

Thankful for any advice.
Mia

Hi Mia

The Immovable Property Tax charges seem reasonable and are based on a 1980 value of €15,500. The figures quoted are per mille, so 4‰ is 0.4%.

You will probably be liable for IPT from the time you took delivery of the property, but you'll need to check your contract of sale to be sure.

Your developer has to pay IPT on the total value of all the properties registered in his name and this figure will be somewhere between €800,001 to €3,000,000 based on the per mille rates.

Assuming you bought the property in joint names, you will be able to recover all the IPT you paid to the developer once you have paid the Property Transfer Fees to secure ownership of the property. However, you will only be able to do this if the developer supplies you with records of the amount paid as Immovable Property Tax (IPT) and a certificate showing the rate of IPT applicable to the property. (Please refer to this letter from the Interior Ministry.

I don't know what the 'Land tax' refers to - I've not heard of this. It ould be the property tax paid to the local authority perhaps?

The 'Interest' is most probably a penalty imposed by the Inland Revenue on your developer for late payment of IPT. You cannot be held responsible for this as it's hardly your fault that you developer cannot run his business properly!

The 'Administration' fee is a scam. The developer is responsible for getting the deeds issued at his cost.

The Property Transfer Fees are based on the Land Registry's assessment of a property's market value at it's date of sale. Use the sale price (ex VAT) when calculating this to get approximate costs.

Regards,

Hi Nigel,

I obviously can't read. Didn't notice the ‰, thought it was 4%.

Next step is to dig out the contract and check what they say about the deeds.

I will also ask the developer what the land tax is.

It's interesting that you say that the transfer value is based on the value of the property at the date of the sale. That was quite a few years ago. Do you mean the date of the transfer as I thought The Land Registry used current values?
If not then I don't understand why the developer is suggesting that the transfer fees may change, which they have in a separate e-mail to me.

Thanks for your help Nigel.

Hi Mia,

The Land Registry uses the market value of a property at its date of sale to calculate the Property Transfer Fees.

The reason your developer says these may change is because the Land Registry often calculates the market value higher than people actually paid for the property.

Regards,