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 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
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 ?
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.
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?
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
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
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.
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
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?
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.
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.
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.
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.
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?
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
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).
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.
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?
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.
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?
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.
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?
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.
Q.: I occupy a ground floor apartment, yet I am
charged for the lift expenses. Is this reasonable?
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.
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
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
A.: Your initial deposit must be refunded if you do
not owe any arrears.
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.
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.
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
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
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.
Q.: What is your opinion on the Peyia sea caves
situation Mr Loizou? Does this warrant a criminal
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
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?
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
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?
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.
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?
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.
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!
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.
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.