Cyprus Property Forum for Buyers, Sellers & Investors

hi Nigel,
We have just recieved an email from our developer that they have decided to transfer all sold properties to the customers in one month.They say they can transfer the property without asking us "according to the new law"! In this case the LR will ask us to pay the full amount plus 10% penalty. If we opt to do the transfer ourselves, the fee will be half. My questions are, what new law? Can they force us to get them now? The property is in both our names.
We were told they would be €10,100 in fullwhen they were available in 2013, but we didnt have the money to get them. I was sure that i read this year that if you paid VAT the discount was 100%. Is this still true. I asked our developer about this last year and he said we didnt pay VAT, but our contract of sale states the price as ' 158,000 cyp including VAT' surely this means that we did indeed pay the VAT. We believe he does known all the wokings of the LR as his wife works there in quite a high postion. Also with have a dreaded CHF loan with Alpha bank on the property and on a 40,000 loan we now owe around €86,000. we have heard there are groups fighting these loans, are we best to join a group? If we do will Alpha be more akward with us? We are unable to travel to Cyprus in the next few months at least due to my health. This email has just hightened my anxity and pain, worried sick about what seems to be a new law that we know nothing about
. Last year I also asked the developer for a breakdown of IPT he paid on our property from 2003-2013, when we paid him over €3,500 for it. we also paid everything else. he said he couldnt give us this as he paid it on allthe development together. We thought this is not true and that he had to give us this so we can try to claim some back. We have paid the IPT since then up till last year. We understand this was not payable this year.
Please could you clarify these points for us, I have emailed him but i am waiting for a reply.
Thank you so much
Marion

Hi Marion

As you paid VAT on the property your Property Transfer Fees will be zero and there are no penalties to pay. (Please refer to Transfer Fee Calculator and read the note at the bottom.)

If the price quoted is CYP 158,000 including VAT you will have paid VAT - whether your developer declared the VAT on his VAT return is another matter. Presumably you have all the receipts from the developer confirming you've paid?

Your CHF loan is a problem. If you go ahead and transfer the property, you will have inadvertently agreed with the conditions of the loan. When you pay the Property Transfer Fees and the transfer takes place, the Land Registry converts your loan to a mortgage and lodges it against the title as a claim against the property. The Land Registry will charge you 1% of the sum advanced under the loan.

I was speaking with the head honcho of one of the companies acting on behalf of those with CHF loans - I'll send you a PM with the company's details.

Your developer should be able to calculate the IPT he has paid for your property - it's a simple calculation. There's a rather lengthy article on the subject by the Cyprus Property Action Group - see Immovable property tax & fraudulent practices.

You will need the help of the developer to complete the numerous forms to apply for a IPT refund.

Regards,

thank you very much Nigel,
After sending us this email stating that his company has decided to transfer the deeds to us, which he says 'according to the new law' he can do without our permission. What new law? unfortunaley we stupidly gave him power of attony to transfer the deeds at a later date some years ago. I sent him an email saying we dont want him to transfer the deeds, He replied yesterday seemly ignoring that fact and saying if we send him the money he will deal with it. Can he do this? he also said we would need to contact the bank to arrange for him and them t attend the LR together. He says he's looked at our contract and still says we didnt pay VAT. He says nobody was paying VAT at the time we brought, and anyway VAT is applied to properties which town planning was issused after 1 May 2004 and in our case the town planning permit was issused earlier. At the end of the day, even if we have 50% discount it will still be about €5,000, which we dont have. Alao due to my health it is impossible for us to go to Cyprus at the moment. Our copy of the contract is with all our paperwork in the house in Cyprus. But we are cetain, showed other people it and still say that it definatly says ' inclusive of VAT.
Sorry, under alot of stressing with my illness and this is just the last straw to have to deal with at the moment.
I have'nt recieved an email from you by the way
Thank you for taking the time to advise us
Mal

Hi Mal

A new law was introduced in 2015 enabling vendors whose clients were 'reluctant' to transfer the deeds to request the Land Registry to transfer them. You can read more about this in my article 'Applying for Title Deeds' in the section Who can apply for Title Deeds?

If your Town Planning Permit was issued before 1st May 2004 you will not have paid VAT. At that time I believe property was zero rated (which would tie in with your contract.)

As you will see in the article, it is not necessary for you to attend the Land Registry and pay the Transfer Fees. It seems you bought in joint names? If so the other party can attend the Land Registry. But if neither of you can make it the transfer will still go ahead but the Land Registry will lodge a claim against the property of 150% of the transfer fees.

I suggest you speak with your lawyer, he/she may be able to negotiate with the Land Registry.

I don't know why the bank is involved. Did you take out a loan to buy the property?

Regards,