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Questions & Answers

January - March 2018

3 April 2018

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Q.: Hi I wonder if we could have some advice please, we live in the UK and are looking at buying a holiday home in Cyprus, the developers have brought the land and nothing is built yet they are in planning stages
Planning is likely to go through in March - and the build will take approx 18 months, they are saying that we only have to pay 5% vat they would apply to the tax office as it’s our main residence, knowing the vat laws are changing in January we need advice on :
Is this correct ?
What if we wanted to sell in say 3 years ?
We could put a deposit down to secure the plot but we are worried as we have never brought out of the UK before and love Cyprus
Is there anyway you could let me know your views on the above please ?
Kind regards

A.: VAT on houses 5% or 19% will not change. As you say the 5% refers to permanent residences only.
You need to carry out your due diligence through the use of an advocate and I suggest that you wait for the issue of the planning permit first prior to pay anything. The advocate to check for any mortgages and other incumbrances if any.
If you decide to sell your house prior to the 10 year period, you must refund to the Tax Authorities the VAT in analogy. So if you pay say €10.000 VAT but you sell this earlier than the 10 year period say in 3 years, you must refund the €10.000 ÷ 10 x 7 = €7.000. Better check also with your advocate.
A.P. Loizou


Q.: We have just received titles for the apartment. It is registered as having an extent of 62 sq.mts., whereas we bought it for 80 sq.mts. I have applied to the developer who has provided the floor plans and we measured them together. Indeed it is 80 sq.mts. So what do we do now Mr Loizou?
Keneth Sharp

A.: Submit an application to the Lands Office for correction attaching the plans etc. Not a serious problem but I do suggest that you correct the title anyway.
A.P. Loizou

Q.: I note in the press of the numerous thefts that are taking place while people are out of their houses. Is it not a worrying thing since when we bought our flat 10 years ago and nothing of the sort to any appreciable extent happened. Shall we be worried of a more troublesome future to come?
Marc & Shiona

A.: Things are changing worldwide I am afraid. Invest in a security system but make sure that you put on the alarm when you are away, even for ½ hour (as we say in Greek “look after your clothes so that at least you are left with half of them”). It does not cost much, say for an apartment around €700 + another €200 p.a. maintenance and direct connection with the security people.
The precaution is especially important for holiday units which are unoccupied for a long period of time.
A.P. Loizou

Q.: We have planted several olive trees in the pavement along our plot, which now they produce a lot of olives. Yet, although we consider that they belong to us, we have all sorts of people picking the olives and we wonder if there is anything we can do to stop them.
Alison Bershaw

A.: If they are placed on a public pavement I am afraid they cannot be considered as being yours and if on a private pavement, it is “yours”. But it takes a lot of nerve for others to pick them – I object to it even for my own house at Nicosia. I have confronted the pickers and they left but this does not apply to all. Objectable people are everywhere I am afraid. Try to pick your olives at the right time prior for the “gipsy” pickers coming along.
A.P. Loizou

Q.: We have let our apartment for an X amount of rent + common expenses. The tenants do not pay the common expenses now the administrator is chasing us for the dues. Is this correct?
Nouris Lambrou

A.: The administrator is correct and I advise the landlords for such occasions to include in the rent the common expenses based on past estimates so that you avoid the hustle. In such occasions the common expenses being part of the rent you can opt to terminate the lease for dues of the rent.
A.P. Loizou


Q.: Dear Sir or Madam, my husband and I we bought a flat in Limassol in 1978 it is in our both names (we are American citizens) we have a daughter the question is if any things happen to both of us, can our daughter take the flat without any special paper from a lawyer? Thank you.
Tima Conklin

A.: No. You need to go through the process and have an administration. A simple way out is to transfer the property to your daughter and reserve on title the life interest for both of you.
A.P. Loizou


Q.: Dear Antonis,

I read your article in Cyprus Mail online and regarding this point -

• Taxation, including the recent abolition of the property tax, a huge plus
If you have a house or land to sell what are the new fees to the seller?



A.: The transfer fees are now halved and this is in favour of the buyer (he has to pay for it). The seller must ascertain the capital gains (if any) taxation. Nothing has changed on this side.
A.P. Loizou


Q.: There are certain places in towns that are occupied by immigrants, mainly in places where the buildings are not well kept. We were offered an apartment 2 bed 100 sq.mts. in Pafos in an area known as Pontiacs (I do not know what it means) for €60.000. A low price I must say. What is your opinion Mr Loizou?
Xenia Astreou

A.: It is not only a matter of price of the property, but also cohabitation and common expenses matters. You may realize and all sorts of problems relating from hanging of clothes on verandahs, objectionable neighbors, non-payment of common expenses etc.
A.P. Loizou

Q.: Donkey farm at Kofinou village Mr Loizou. Have you visited it? A worthy visit from all of us who love Cyprus donkeys (should you wish to report this in your Q+A Column it will be most appreciated).
July Harrides

A.: Yes, I have visited the farm so far 3 times with my grand-children and in fact last week we had our office Xmas party in the restaurant.
A lovely place to visit with children since in addition to the donkeys, it has all sorts of other domestic animals. A similar place like the Camel Park – great fun for children.
A.P. Loizou


Q.: I understand that if one sells a building plot or just development land, he must charge the buyer 19% VAT. On the other hand I also understand that if a plot is sold as a company share, he is not. It does not make much sense to me but is this correct?
Mike Gavriel

A.: If the plot is owned by a Co and the sale appears as sales of shares of the ownership, yes no VAT is charged.
A.P. Loizou

Q.: Bearing in mind the various announcements of the Government, investments on Cyprus infrastructure, can we expect that the Pissouri bay marina will come into being soon?
Nicos Stellas

A.: I doubt it notwithstanding the previous belief that it will happen (I suspect it will be, but at some future time), but you do appreciate that it is not a priority project.
A.P. Loizou


Q.: Dear Mr. Loizou,
The developer (a fairly large and well-known group) builds a new house (expensive villa) under the new Passport Program (popular among foreign buyers, mostly Russians and Chinese) near our house, but does not adhere to the adopted standards in our zone (Build / Coverage 40% and 25% respectively, maximum height 8.3 m). In reality, the standards for the area have been exceeded by more than 2 times (100% building and 80% cover), height - more than 12 m (in 4 levels) The municipality explained that the developer submitted an application for the construction of an apartment building/block and not the house/villa (although zoning does not allow - all the existing houses in the area are detached, reasonably sized 2 storey buildings ). The question "why allowed this construction? " was not distinctly answered (the municipality representative just mentioned that for apartments buildings they issue different planning/building permits irrespective of the zone and formally the developer complies with regulation). Have you ever faced similar issues and what to do in this case?
Best regards
A. Chern

A. An incorrect answer dear reader. The building if illegal you can apply to the Planning Authority to issue a stop order or you may be able to apply to the Court for the same being an affected party.
A.P. Loizou


Q.: I occupy a ground floor apartment, yet I am charged for the lift expenses. Is this reasonable?
Terry Hack

A.: Yes it is since common expenses must be shared regardless of use. If I am to adopt your approach, then the roof of the building should be maintained by the top floor, unoccupied properties should not be charged, larger families should be charged more than the smaller ones and for the same size of the apartment etc etc. It will become a mess and an impossible situation to manage.
A.P. Loizou

Q.: I have my own insurance for the apartment, yet I am charged insurance by the administrative committee. Can I opt out of the common insurance?
Lenia & George

A.: Perhaps the Committer is insuring the common use areas such as the lift, staircases etc. If we are to follow the law and logic, my opinion is that the whole building should be insured as one. Take for example a building with 10 apartments and one owner does not insure his unit. If the building falls down due to earthquake/fire etc, how is the whole block going to be rebuilt since one will be missing? Regrettably due to the unworkable common expenses law, most occupiers opt to carry out their own individual insurance policies, but the danger is there.
A.P. Loizou


Q.: We have paid €500 as a deposit for the common fund. From there on there was the monthly charges. Upon transfer we were called upon to pay another €400 for debts to the common fund we have. I ask you Mr Loizou should (or not) have our common fund account debited?
Anna Vlovich

A.: Your initial deposit must be refunded if you do not owe any arrears.
A.P. Loizou

Q.: I refuse to pay the common expenses since others in our block do not. Now the committee is suing me for the arrears. I object to this since I feel that it is unfair.
Stelios Georgiades

A.: I cannot agree. You must pay your dues and let the committee to handle the remaining non payers. You are at fault I am afraid dear Stelios.
A.P. Loizou


Q.: We have a building plot and we have submitted an application for building a home. In our building permit we noted that we have to pay service charges and the cost of installing them (e.g. water, electricity etc). We ask you Mr Loizou if it is a building land should they not have these services provided?
Lenia & Christos

A.: If it is classed as a building plot you may have a point. If not however this is reasonable dear reads and in accordance with the building regulations.
A.P. Loizou


Q.: A building plot next to ours is under development and we asked the contractor if we can buy the top soil which is very good. We have agreed and paid him €100 for the soil.
Then for some reason we do not understand, the plot owner says that the contractor had no right to sell the top soil to us and she is demanding €200 for it!! Are we liable for this?
Lina & Chris J.

A.: More details are needed but I think that the contractor should handle this claim with the owner, since he was in possession of the plot.
A.P. Loizou


Q.: What is your opinion on the Peyia sea caves situation Mr Loizou? Does this warrant a criminal investigation?
H & Steff Law

A.: I doubt it dear readers and the situation is not as simple as it appears. One must consider the compensation rights that land/property owners have due to imposed restrictions. Cancelling a planning permit is all the worse since the Republic will be called upon to pay damages which could run into several millions. I agree however that this case has not been handled correctly by the local authorities and there is room even at this time for added protection.
A.P. Loizou

Q.: We have a plot of land which abuts onto an asphalted road. Yet upon application to develop the planning authority rejected it due to a non-registered road. How can this be?
Christos Lenos

A.: It happens I am afraid. The road must be so registered notwithstanding its present situation. In addition the minimum road width must be 4.0 mts. in order to allow development (in fact if a road is registered as being public, but if it is not made up this will not be a problem for a plot’s development).
A.P. Loizou

Q.: We have tried and tried to plant a small patch of grass in our garden, but then, it dries after a few months. We have checked the water quality, the subsoil etc and there are no problems on this end. Any views Mr Loizou based on our experience?
Costas Xenis
A.: If what you say is correct and including regular watering, check if the grass is affected by lack of sun light and/or any tree roots underneath. At the end of the day you may have to resort to a plastic grass I am afraid – not uncommon in Cyprus.
A.P. Loizou

Q.: We intend to hire a shop for our business. On top of it, on our roof, some other neighbor placed a huge sign advertising his business. We asked him to remove it but he refused. So what is our remedy?
Nina Lotchard

A.: Check if he has secured a planning permit from the local authority (pay them a visit) and if he has secured the permit to do so by the local administrative committer. If no permit you can seek a court order to have the sign removed. Not the best solution dear friend since it will cost money and time and you have to decide if you can find somewhere else or if it is worth hiring it and wait.
A.P. Loizou


Q.: Dear Mr.Loizou read the article with interest, this exact same thing happened to me, land grossly overvalued my property at time of transfer, any attempt to change this they basically threatened the decision to revalue may go against you and end up paying more due the valuation going up!I ultimately had to sign a paper agreeing with the valuation purchase price they thought was correct!

My question here is when I come to sell and may pay pay capital gains will the state be clever enough to use the purchase price as per my sales contract to calculate the profit I made? or use the land registries perceived purchase price as calculated by them to grab higher transfer fees when they did the transfer to me?bearing in mind I signed the document stating that the land reg decision on purchase value of property was what they decided!

D. Nicolas

A.: This is the odd part. They will charge you on the difference of the gain i.e. between the purchase price (+ cost) and not on the value charged by the Lands Office on transfer.
A.P. Loizou


Q.: A quick question regarding property transfer fees please. It is true that if a parent wishes to donate their house to a child...there is no property transfer tax to be paid?

A.: Yes – Very little around ±100.
A.P. Loizou

23.3.2018 |

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