Title Deeds "remaining amount regarding purchase price"

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J and a
Posts: 4
Joined: 26 Apr 2016 17:41

Title Deeds "remaining amount regarding purchase price"

Post by J and a » 27 Apr 2016 10:51

Hi Nigel
We bought in 2003 from private vendor who originally bought off plan from developer in 1989. Title Deeds have become available in last year or so and in order for us to obtain them the developer's solicitor has listed approx. costs we need to pay.
Costs include "remaining amount regarding the purchase price". We paid the full purchase price in 2003, no money held back. We're seeking clarification from developer's solicitor. But in meantime can you advise where we stand if solicitor says a) it's a shortfall left by original purchaser or b) it's charges such as IPT, sewerage, Municipality from 1989-2003 ? Are we required to pay costs that were incurred before our purchase in 2003?
Would appreciate your thoughts.
Thanks



Nigel Howarth
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Re: Title Deeds "remaining amount regarding purchase price"

Post by Nigel Howarth » 27 Apr 2016 21:22

Hi J and a

The first buyer would have paid a contract cancellation fee to the vendor enabling you to purchase the property.

You would only be liable for Immovable Property Tax, etc. from 2003 as the first buyer will have settled their account with the vendor.

You should not be liable for any alleged shortfall in the purchase price.

Assuming that you've paid Immovable Property Tax to the Tax Department for 2014 and 2015, let me know the 1980 value of the property and I will calculate your IPT liability. - or you can find the historical IPT rates at http://www.mof.gov.cy/mof/taxdep.nsf/Al ... enDocument (if it's a large developer they will be paying IPT at the highest rate.)

When you pay, make sure you get a receipt showing the IPT has been paid. This receipt must bear: the company logo, the amount paid, the signature of the company representative and the company stamp.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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J and a
Posts: 4
Joined: 26 Apr 2016 17:41

Re: Title Deeds "remaining amount regarding purchase price"

Post by J and a » 28 Apr 2016 17:42

Thank you for your help. The link to historical IPT rates will be useful when we can obtain the 1980 valuation figure, but it seems likely our individual property would have been below the thresholds from when we bought it in 2003 up to the change in bands in 2013.
Re 2014 2015 IPT I'm afraid to say that it's only when looking into obtaining Deeds that we became aware of IPT law change 2014. We've received nothing from Tax Dept and assume developer did not pass our details to Tax Dept. We realise belatedly that the onus was , and is, on us to register and pay and we're keen to get it sorted out quickly.
Re paying up the IPT due from 2014 onwards : the developer's solicitor has listed approx. costs for us to obtain Deeds which included "1. Taxes re IP for 2003-2015 €2500 approx" and "2. Taxes re IP 2016 €400 approx , a declaration (TF318) 2015 will be filed to the Tax Dept " Our query is : would it be advisable for us to go direct to the Tax Dept to register and pay all IPT & penalties for 2014,2015 and 2016 ourselves and then ask the developer's solicitor to deduct the amount we've paid from the approx amount listed? Or alternatively is there any reason why we shouldn't continue to deal with it all via the developer's solicitor as we are already dealing with them re paying all the other amounts necessary to obtain the Title Deeds ie Sewerage, Municipality, Property Transfer Fee ?
Again, we appreciate your thoughts. Thanks



Nigel Howarth
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Re: Title Deeds "remaining amount regarding purchase price"

Post by Nigel Howarth » 29 Apr 2016 09:11

Hi J & a

You should visit the Tax Department and sort out your Immovable Property Tax a.s.a.p. Remember to take your passport and anything showing your Tax Identification Number with you and as much information as you can about the property such as a description of the property such as the area where the property is located, square metres of the land and building, description of the building e.g. house, apartment, number of rooms etc. This will enable the Tax Department to assess the property's 1980 value and your IPT liability.

Although the 1980 value of the property you purchased may be below the threshold at which IPT becomes payable, IPT is assessed on the total 1980 value of all the properties registered to the tax payer. So the developer would pay IPT at a much higher rate.

When you've sorted things out with the Tax Department, let me know the 1980 value of the property and I will be able to work out the maximum payable to the developer assuming the company's paying IPT at the top rate.

I suggest you also read through your contract of sale to see what your obligations are regarding IPT and other property taxes.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
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J and a
Posts: 4
Joined: 26 Apr 2016 17:41

Re: Title Deeds "remaining amount regarding purchase price"

Post by J and a » 06 May 2016 19:12

Thanks again for your help Nigel.
We have today been to the solicitor in Cyprus to get everything moving (we thought that's the best place to make a start as the solicitor has Deeds waiting to be transferred to our names, showing 1/1/1980 valuation figure on them, which I think is the figure we need to know to start to get our IPT for 2014 onwards sorted out)
But before any progress has been made with anything , the solicitor has dropped a bombshell. They have queried whether the person we bought the property from has paid Capital Gains Tax on the profit he made on selling the house to us in 2003. The solicitor said that unless he has paid it, we will never be able to obtain our title deeds. All we knew about CGT was that we would become liable on profit made by us if we were ever to sell the house. The solicitor said we can ask the solicitor who acted for us in our purchase if he has any record (Tax Clearance Certificate?) showing our vendor did pay CGT. We can't get an appointment with them until next week so we have managed to contact our vendor and ask about it. Our vendor is claiming to have no knowledge of it one way or the other and is not interested in the predicament that it is looking increasingly likely he has left us in.
I honestly don't know where to start to ask you how we can find out everything we need to know to get this resolved and if he has not paid what we can do. Is this something the vendor's solicitor should have dealt with? Should our solicitor have checked this before our purchase completed? Really hope you can shed some light on this. Many thanks again



Nigel Howarth
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Re: Title Deeds "remaining amount regarding purchase price"

Post by Nigel Howarth » 06 May 2016 19:50

Hi J and a

The lawyer you instructed when you purchased the property in 2003 should have ensured that the person you bought it from had paid their Capital Gains Tax. Unfortunately it sounds as if he/she may one of the 95% of lawyers in Cyprus who give the rest a bad name!

I'm afraid that if the person you purchased from did not pay their Capital Gains Tax and now refuses to pay it, your only option is to pay the Capital Gains Tax they owe yourself.

Regards,


Nigel Howarth
Independent information & advice for Cyprus property buyers
Contact Nigel Howarth
Read the latest Cyprus property news

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