No.315
Q.: Dear Mr Loizou
I regularly read with interest, your columns in the Cyprus Mail & Cyprus Weekly. I would like to bring to you attention the following matter, which I believe is an important matter of public interest, affecting a large number of Nicosia residents. My wife owns a property in Pente Pigadia, a public road in the Nicosia Municipality. It was published in a recent issue of Cyprus Gazette*, that the Pente Pigadia road and footpaths are to be re-surfaced at a total cost of more than €300,000, and that this cost is to be charged directly to the residents of the street, in proportion to the number of square metres of frontage*. For multi-occupancy buildings, each of the flats, is allocated an equal charge, even though the flats may be of different sizes and taxable values. The allocated cost to each property is then payable, with substantial interest, over 20 years. This situation affects not only the residents of Pente Pigadia, but also many other streets in the Ay. Omoloyites district, which are affected in the same way, and I am guessing that there are probably other Gazette issues detailing streets in other districts.

It is an accepted principle of civil administration in democracies, that the maintenance of public roads and footpaths is the responsibility of the local municipal authority and/or the central government and funded out of local or central taxation, (or in rare instances not applicable in Cyprus, by road users in the form of tolls). Public roads are empahtically NOT the resonsibility of the residents of those particular roads, as they are provided for general use by citizens, so it is right and proper that citizens in general via local/central taxation, fund road maintenance as with other public services. How can the Nicosia Municipality impose these charges, given that they contravene basic princples regarding funding for "public goods" such as roads?

Even if the principle of residents' financial responsibility for their own public roads is accepted, (which I do not accept) the method of allocation is inconsistent with normal principles of local taxation as applied in Cyprus and elsewhere, where municipal taxes are generally charged in relation to property values (as at some fixed date). How can it be right that residential units of different values (some possibly double the value of others in the same building) be charge an equal allocation?

I would appreciate your thoughts on the matter.

Sincerely
Steven Kimberley

A.: I have checked with Nicosia Municipality and it appears that notwithstanding the unfairness of the situation, this is how the law is. I am informed however that the Municipality, having listened to the peoples objection and having consulted the Government and the Sewerage Board, it is working towards a reduced rate. Hopefully the tax will be far less than what you were told under the present circumstances.
Regards,
A.P. Loizou
3/29777 (7.4.2010)

No.316
Q.: Dear Mr Loizou,
My wife and I would very much appreciate your guidance.
We jointly own a villa here in Cyprus, if we sell it will the sale be subject to capital gains tax?
If so, how is the tax calculated, what allowances do we have, and is it paid here in Cyprus on completion of sale, or in the UK when funds are transferred?
Are there any other taxes / charges likely to be incurred apart from legals and agents fees?
Sincere thanks in anticipation of your valued assistance.
Peter and Ann Goddard,
Ayia Thekla

A.: An article on the subject has been published in this paper last week – see our website, which answers all your questions. The Capital Gains is paid in Cyprus prior to transfer of the property, since you need a tax clearance ahead. Other taxes involved are of a minor nature such as ownership tax, sewage etc, not much.
Regards,
A.P. Loizou


3/29776-td
7.4.2010

No.317
Q.: We were told that if we buy a property as a Co we can then sell the Co’s shares and thus not pay Capital Gains tax, since shares are not we understand subject to Capital Gains tax. Are we correct in this?
Jerry & Milly Aunt

A.: You are partly right. Ιf a Co owns assets which represent real estate more than 50% of its total assets, the Co (shares) will be liable for Capital Gains. What some people do they have a holding Co who owns the shares of the “real estate” Co. So when you sell your home, you will sell the holding Co’s shares, which represents shares and not sell the real estate Co as such. In this way you might get away with it. Seek auditor’s advice.
Regards,
A.P. Loizou

No.318
Q.: We are German Nationals and many years ago our parents bought a home at Kyrenia. Since then (prior to 1974) we cannot visit the property as it is classed as a military area by the Turkish Army. Can we follow the European Court decision and sue the Turkish Government for loss of use or can we seek compensation through the local commission?
(name withheld)

A.: I will say that you will be treated as locals (Cypriots). There should be no difference between “foreign” and locals, but having said that seek the advice of the solicitor who deal with such actions (names submitted). You can sue the Turkish Government for loss of use and ask for return of your property. You may also seek a direct sale to the Turkish Government.
Regards,
A.P. Loizou

No.319
Q.: I work for a real estate Co and as you are aware the business is not doing well. We were informed that some of us employees will be let go. Our friends told us however that in Cyprus firing of staff is not allowed. Any truth in this?
(name withheld)

A.: If you have an employment contract for a fixed period and this has ended you can be fired. If business is not good you can still be fired under the “excess staff” provision but you will be entitled for compensation from the Government and the employer may not hire new staff for a period of time. Firing of staff under this provision has its rules. It is last come first to go. Best to seek the advice of the local Social Security office for the details.
Regards,
A.P. Loizou

No.320
Q.: Dear Mr Loizou could you please update us with the sales statistics? We understand that the market is picking up and this gives us hope to hold onto our property and offer now a huge discount. Thank you for the good work that you are doing.
Leslie Mandoff

A.: I hereby provide for you the most recent statistics.

As you can see things are getting better but nothing to raise our hopes to an appreciable extent for a recovery. The sales results of the year 2007+2008 are behind us for good, but sales are indeed improving mainly due to the lowering of prices, the increased demand for holiday homes from locals (mainly in the Protaras region) have helped. What you will find also is that sales demand are now in the region of €150.000-€200.000 mainly apartments. The recent U.K. property exhibition did not produce good results for Cyprus I am afraid and competition from more “desperate” countries, such as Spain and Bulgaria did not help.
Regards
A.P. Loizou

No.321
Q.: We have just returned to our Cyprus home and we found some sort of green fungus on our walls (inside). What can we do, must we paint the walls again – Please-please your urgent advice is needed since if we are to paint it means money and time.
A. Karras

A.: Most likely you will not need a paint. It is fungus which is created when the house is not aired. Dust that exists on the walls, coupled with humidity creates this. Use a dishwasher solution and wash the walls with a sponge. It should do it. Bear in mind that washing machines, dishwashers, bathrooms etc create humidity and if the house is closed for some time you get this.
Regards,
A.P. Loizou


3/29780-td
8.4.2010

No.322
Q.: Plumbers, carpenters, electricians, gardeners etc

We live at Pissouri village and we constantly have under our door all sorts of handy men offers ranging from carpenters to pool cleaners and so on, stating as an attraction in terms of a guaranteed job, “British Qualified”. What does this mean Mr Loizou?
Osbon Hancicoffe

A.: I have a house at Pissouri and I experience a similar thing. Other than electricians (who must be so licensed under Cyprus law), anyone can do the other jobs. It is a fact that British and other European countries qualified tradesmen are on the whole far better than the locals. But my experience tells me that many British tradesmen tend to “dilute” in the lower standard Cypriot level. Make sure whatever decision you take that the handyman is a licensed one in the sense that he has a work permit. If not you may stand to be accused that you are employing illegal workers and get a 2 months prison sentence and fine etc (does not happen often). Get recommendations and see comparative work. I can tell you a few plusses and a few minuses, using this sort of people and do not think that everything is rosy on the other side.
Regards,
A.P. Loizou


3/29788-td
8.4.2010

No.323
Q.: I must come back to you Mr Loizou. I noted what you said about tree planting and you have paid special attention for olive trees being healthy and not having illnesses, requiring less water etc etc. So we have decided to go for the olive trees but the question now is what sort of olive trees we plant, the oil producing ones or the eatable ones?
Kaite & Lenin - Pafos

A.: If you are olive eaters (most Europeans are not) place some 1-2 kalamata olive trees for eating and even if you do not eat the same, give the produce away to friends. If you are olive oil eaters (salads etc - the best), choose the Cretan type. Bearing in mind that olive picking can be a difficult job, but a most enjoyable one. In our house at Nicosia we have an olive party day and we invite the neighbours for a sougla and olive tree picking party. I can tell you it costs us 3 times more from buying both from the supermarket – but, what a fun!
Regards,
A.P. Loizou


3/29764-td
9.4.2010

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