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Cyprus Government abolishes property transfer fees

Fantastic News - Cyprus Government abolishes property transfer fees

In a measure to designed stimulate growth in the Island`s property sector by reducing the cost of home ownership, Cypriot MPs unanimously agreed to abolish or reduce Property Transfer Fees at a meeting of the House of Representatives earlier today.
EARLIER today the House of Representatives voted unanimously to abolish or reduce property transfer fees for a period of six months, according to a report in Stockwatch.
- For those who do not pay VAT when they buy their house, property transfer fees are to be reduced by 50%.
- For those who pay VAT on their house purchase, no transfer fees will be payable.
The House also approved an amendment to the bill enabling those who submit applications under the provisions of the Town Planning Amnesty to enjoy the same benefit.
The draft law will be effective for six months, until the Island`s Government submits a full proposal to the House.
Property Transfer Fees are based on the Land Registry`s assessment of the market value of a property at its date of purchase. However, using its discretion to reassess the amount of Transfer Fees payable, the Land Registry relies on its own historical data in a way that cancels out any transfer tax benefit of a "bargain-buy", which can result in double the expected amount being levied.
There have been many reports of the Land Registry bumping up the perceived value of properties in order to extract higher Transfer Fees to help boost state coffers. This practice, which has been labelled "State Sponsored Fleecing" in the media, has done nothing to enhance the reputation of the Island.
The bill applies to cases where a contract of sale has been lodged at the Land Registry but for whatever reason a Title Deed is not issued within six months. It comes into immediate effect and is not retrospective.