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Cyprus Property vat News

VAT reductions for first-time home buyers and a suspension of transfer fees are being discussed as part of the Cyprus government’s austerity measures to bolster the Island’s failing economy

GOVERNMENT lobbying by the Land & Building Developers Association (CLBDA) and the Land & Property Owners Association (KSIA) has been successful as proposals to reduce the tax on properties are now being discussed

The tax reduction proposals comprise:

Reducing the VAT to 5% for first-time home buyers for residences up to 250 square meters – and maintaining it at 15% for residences between 250 and 300 square metres. A suspension of property transfer fees for a three year period. A draft law concerning the reduction in VAT to 5% is expected to be discussed at today’s House Plenary session.

The Island’s property market has been in trouble for quite some time. Sales have fallen for thirteen consecutive months and are now down by almost 20% on the numbers sold last year. Unemployment in the sector has risen and the business climate deteriorated.

Assuming that these proposals are accepted by parliament and become law, they should go a long way in relieving the problems of the industry and should also help to clear the backlog of Title Deeds waiting to be issued.

EU making property purchase safer

ESTABLISHED by the European Land Registry Association and funded by the European Union, the Cross Border Electronic Conveyancing (CROBECO) scheme allows for the procedure for buying property to be settled in the purchaser’s home country and protected by the laws of that country.
 
CROBECO, which is currently being piloted in Holland & Spain, means that a Dutch buyer of Spanish Property can apply Dutch law to the contract and ask a Dutch Court for compensation from the vendor if they later find there are unknown public limitations, such as retrospective planning laws, affecting the property.
 
Further pilots are expected to take place in other countries later this year.
 
In a statement to the Daily Telegraph Liberal Democrat MEP Diana Wallace, a keen supporter of the development and expansion of the scheme, said: “The EU has a role to play in helping to facilitate property deals across borders and at the very least provide a framework of legal certainty.
“In practice, this means we must ensure that there is full access to information on the state of a property, the conditions attached to it and any other legal obligations or obstacles.
“This must go hand in hand with a transparent administration of the property deal and a quick and clear judicial process in case something goes wrong.”
 
It will take a long time and a lot of legal framework building to reach this point; but the fact that a pilot scheme exists, has EU backing and funding and appears to work means that buying property in Europe could become safer and more transparent sooner rather than later.
 
Details of the CROBECO project were unveiled on June 14 at the EU parliament at a seminar hosted by Diana Wallis in a bid to find a way forward in overcoming legal uncertainties when buying property abroad.
 
A spokesman for  European Land Registry Association said: “The fact that the deed is processed in the buyer’s own language by a conveyancer from their own country, [means] they get the feeling that they are better legally protected and will be less reluctant to buy real estate in foreign countries where the real estate market has collapsed.”
The scheme is likely to be welcomed by countries such as Cyprus and Spain that have thousands of unsold holiday homes littering their landscapes, faltering economies, and tarnished reputations – and who are desperate to attract overseas buyers back to their property market.
 
Courtesy Cyprus Property news

Property in Paphos Cyprus is now excellent value.

With significant price reductions of property in Cyprus, the market is now providing exceptional value to . Prices in the popular destination of Paphos continue to fall steeply but now many agents have a lot to show buyers of all budgets so they have a great choice.

Price falls in Paphos are making property in Cyprus extremely cheap with prices in Paphos having fallen by at least a quarter in the last eighteen months. One experienced property professional with many years in the business has never seen such a good buying opportunity for a long time.

A villa which would have previously sold for €450,000 is now going for €300,000, and an apartment priced at €125,000 [£77,400] is now selling for €80,000 [£49,600].

The price falls have been attributed to the problems with banks imposing stricter mortgage criteria and the global financial crisis. A bank manager in Paphos told the Sunday Mail that lenders in Cyprus have reduced the number of property loans agreed by around half.

Some estate agents are very optimistic about property in Cyprus, while prices have dropped in some areas of Paphos, some agents are seeing more demand from foreign and Cypriot buyers who are optimistic about prices and believe they now have a great chance to buy something.

George Mais, the president of the Paphos branch of Cyprus’ Land and Building Developers’ Association believes that while some properties or locations just aren’t popular anymore’, new properties or those in a good seafront location are holding their value.

Overseas buyers, particularly those from Russia, are returning to Paphos ‘because it is quiet, there are many areas of outstanding natural beauty and it’s safer than a lot of other towns in Cyprus,” he said.

One has to remember that Cyprus is a small island, very popular with British people because of the ease of living there with no language barriers and a very good health system, the land is finite and the choice will be reduced in the future.

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