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TITLE DEEDS AND FEES REQUIRED BY DEVELOPERS

Posted: 02 Mar 2010 18:13
by monkbridge
Hi Louise,
I have been informed by the developer, that the deeds are ready. The apartment was built in 2004,and we bought it 23\1\08. The purchase price was CYP£75,000. They informed us the IPT for 2 years is £513, and we also have to pay a fee to the LAND REGISTERY OFFICE in the region of £3,845. On top of this he also wants to charge £500 per month if we do not complete the transfer by the end of March. We have read quite a bit on this subject, and are still as confused!
What is your opinion on this please ?

Many thanks , Monkbridge.

Re: TITLE DEEDS AND FEES REQUIRED BY DEVELOPERS

Posted: 02 Mar 2010 19:10
by Nigel Howarth
Hi monkbridge and welcome to the forum.

Firstly, on 1 January 2008 Cypriot currency changed from the Cyprus Pound (CYP) to the Euro (EUR, €), so I suspect we are talking in Euros?

Regarding the money to the Land Registry Office

Every time the ownership of a property changes hands (with a few exceptions) a government tax is payable to the Land Registry Office - Property Transfer Fees. You can find an on-line calculator to work out how much you have to pay at http://www.moi.gov.cy/moi/dls/dls.nsf/d ... calculator

Based on a purchase price of €75,000, the calculation works out at €2250.00.

Based on a purchase price of CYP 75,000, which is equivalent to €128,145, the calculation works out at €4,698 if you bought in a single name and €3,844 if you bought in joint names.

Once you have paid this tax, the Land Registry will issue a Title Deed for the property in your name - which means that you will considered as the legal owner of the property.

The reason the developer will charge you if you do not pay this tax is that he will continue to be the legal owner of the property and will therefore continue to be liable to pay tax on it.

Immovable Property Tax (IPT)

Immovable Property Tax is a bit like the old rating system in the UK, which was also based on assessed 1980 property values.

All property has an assessed 1980 value (which is calculated by the Land Registry) entered on its Title Deed. And so the plot on which your property is built will have a Title Deed containing its 1980 value. (If the plot is subdivided into smaller plots, the Land Registry will apportion its 1980 value across the Title Deeds of the smaller plots.)

As developers build on the land, they declare how much input they have put into the land to the Inland Revenue every year. The Inland Revenue assesses the 1980 value of that input, adds it to the 1980 value of the land and presents the developer with a tax demand.

A developer's total tax bill isn't calculated on a property by property basis, it is calculated on his total property portfolio. Similarly, if you were to own two houses, your Immovable Property Tax bill would be calculated on the total value of both properties, not the sum of the Immovable Property Tax on each of them.

When you eventually get your Deeds, the 1980 value of your property will be below the €170,000 threshold at which this tax is payable. Providing that your developer has provided you with the necessary information, you can apply to the Inland Revenue to reclaim any overpayments you may have made.

(If you have any difficulties in getting information out of the developer that will enable you to reclaim any Immovable Property Tax overpayments, I have a letter from the Permanent Secretary of the Interior Ministry that I can send to you).

Regards

Re: TITLE DEEDS AND FEES REQUIRED BY DEVELOPERS

Posted: 05 Mar 2010 11:41
by monkbridge
Hi Nigel,
Many thanks for a prompt reply. It looks like we will be paying the fees asked for by the developer,and we will try to claim back any IPT that we can? Would you recomend we use our solicitor or is it simple enough to do it ourseleves?
Once again thank you for your help.
Monkbridge.

Re: TITLE DEEDS AND FEES REQUIRED BY DEVELOPERS

Posted: 05 Mar 2010 18:10
by Nigel Howarth
It will probably be easier for your lawyer to do this on your behalf - but I expect a good slice of any IPT overpayment will go in legal fees.

Have a word at the local Inland Revenue office, they may be able to give you the forms although you will need a Greek speaker to help you fill them in.

Regards,