Land Registry transfer fees Government u turn ?

[karakum5c]

My lawyer has told me that they expect the Government to create an amnesty for all those like myself who are withholding their transfer tax due to it being increased from 3% to 6% for foreign purchasers only

They expect the Government to announce a cut off date for all outstanding property contracts but not to reverse the increase for all contracts after a certain date

Has anyone heard anything about this ?

[Deniz1]

I will ask my avokat today.

[andrew4232]

it would make more sense for the government to get the due taxes in if they sorted out the back logs on paper work so that people can get there kocans

[cjtill]

My understanding is that the Government have agreed to reduce the 6% transfer tax to 3% again for foreigners as it was against the constitution, however it has to be passed by the Council of Ministers which will take a couple of months.

[Deniz1]

my avokat said today that she has heard nothing at all about reducing the tax again. Many people are withholding the stopaj in the hope of forcing the government to re think.

[karakum5c]

Thank you for all your replies

As my transfer is ready and waiting to go with the money sitting in a holding account awaiting Government announcment, i will let everyone know as soon as decision is taken

Hope this forum can be of as much help to people as another one used to be

[Deniz1]

Thats what a good forum should be all about I think. We help each other or should do!

[dekski1]

Yes I have heard a similar 'story'. The Government aren't issuing any Kochans at the moment as there is a court case pending and the rate may be reduced.

[nettoboy]

Does anyone know of any update on the position of the Goverment, in relaton to returning the present 6% property purchase tax back to 3%. Last October, I was was told by Lawyer to wait for my 'individual' Kocan for my apartment, rather than recieve the General one covering the complex. Great advice as the tax then went up to 6% on the 1st of November! I too have been holding off in the hope of a reduction, with monies ready. The previous post also refers to a court case with Kocans not being issued, what of?

[sophie]

Its very sad to say but sometimes the Advocates can be the last to hear about Government decisions. Remember the total panic and chaos about 5 years ago when we all had to rush down and get paper work stamped, registered and translated into English. They were caught totally on the hop, some took their phones off the hook and refused to answer Emails and the Government offices closed for a few days because they couldn't cope.

[snickers]

Does anyone have an update of the rate of tax - is it still 6%. What figure is the 6% actually calculated on?
Thanks
Nick

[karakum5c]

The transfer tax is 6% of the amount in sterling of the amount you paid on your contract to buy your property

If you bought your property in 2007 say, the above amount is transferred into TL at the average exchange rate for that year as set by the Government.

The amount is then transferred back at the TL rate just now into sterling this is the amount you pay.

You are either going to be up a bit or down a bit, your lawyer will insist on up too a £500 contingency paid by you to them just in case.

Added to the above you pay a 1% land registry transfer fee.

Lastly you also pay a £150 Title deed fee/ Additional stamp for POA.

As to the Government changing its mind on the 6% rate your lawyer will tell you this is highly unlikely to happen now and it is in your best interests to pay. By doing so you are guaranteed of only paying 3% on your second property purchase, this concession may be withdrawn in the future if you dont pay now. This appears to be on the cards for those that dont pay soon.

[JBA]

The tax is quoted in TL although many lawyers tell you the sterling amount because they assume that it is your preferred currency.
I talked this over with my lawyer in the early days and he agreed that when the time came TL would be fine and he would need no contingency. Armed with this knowledge I changed sufficient sterling into TL when the exchange rate was particularly favourable (like now) and kept it in a savings account until it was needed. The demand was presented in TL (according to the average exchange rate formula based on the original contract price) and paid in TL - so the CURRENT exchange rate did not apply.

[snickers]

Thank you for the responses. I have had my house built, dealing directly with the builder, so didn't exactly have a contract - will I have to get proof of the amount we paid?

[andrew4232]

Thank you for the responses. I have had my house built, dealing directly with the builder, so didn't exactly have a contract - will I have to get proof of the amount we paid?

i would think so dont somehow think they will be happy with you just going in and saying its cost me xxxxx you know they like there paper work !!

[stellasstar1]

I don't know when JBA paid his purchase tax, but things have changed now. It is not necessarily on the contract price, but on the value of the property when you pay the tax, also the price in sterling, when changed to lira, , is no longer calculated at the exchange rate of when the contract was done, but at the rate when the tax is paid.

[cyprusishome]

The rules are what they are on the day you personally do the deed. It could be purchase price, a valuation or whatever and you can be sure it will not be in your favour.
As for a contract, you will need that to obtain kocan, or you did and may be the basis of the property valuation.

I think snickers you are very unwise not to have a contract lodged with the Tapu to at least make an effort towards security of tenure. You really must not have read any of the miriads of warnings of potential for mortgages, memorandums etc being taken out on what you think is yours. DO NOT TRUST ANYBODY in property deals here, even the person who may claim to be your best friend, too many have lost the lot because of deals gone wrong. In fact there was a story in the press recently of a family buying from their BEST friends and when home was finished they got totally shafted.

[Keithcaley]

CIH, I obviously agree in general with your post, but perhaps 'snickers' already owns / has a kochan in his name for the land, and has simply got a builder to do the work...

Mind you, even then a contract specifying work / payment schedules wouldn't be amiss.

Interestingly, I understand that a lot of locals who own their own plot and get a house built on it, don't bother to get the house registered on the Kochan - presumably because of the expense involved...

[snickers]

Fortunately we have got kocan in our name for land, fully expect the tax issue to involve a day or two out visiting various offices to get sorted and no doubt we will need another piece of paper that we hadn't thought about. We were lucky in that it was built and finished with no real hiccups and restored our faith in the human race, especially when you hear of some of the terrible stories and situations that people have found themselves in.

[Keithcaley]

Well, I could be totally wrong (bet on it!) but the issue of transfer fees may not affect you at all - you're not transfering anything...

As long as you've got planning permission and the building has been approved, I would leave well alone!

[karakum5c]

The problem is if you dont pay your final taxes to get your Kocan from the Government your builders details remain on your Kocan.

I have my Kocan and my builders details have been crossed out by the registry office and officially stamped.

If i had not paid my final taxes and my builder had gone bust then his bank would have stepped in and claimed my property as collateral against his debts, regardless to the fact that i had made all the stage payments on my property.

This has happened to a friend of mine, builder bust, paid for house but bank now claimed ownership because there client the builder was named on provisional Kocan. He now lives in a house he has paid for 100% but no longer owns.

Anyone out there who has bought but thinks they can avoid paying taxes with builders going bust right left and center is playing Russian Roulette.................Get the Kocan! Get your builders details removed from it !

Sleep easy................knowing your home is your Castle not your Gallows !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[cyprusishome]

Totally agree. Get your kocan at all costs. Even a shared one ensures you have security of tenure on the land. It may be a gamble on tax going down to 3% but better than the potential horror stories I have heard.

As for getting final approval, ie you house on the kocan, keithcaley says it as is that locals do not bother. You can sell your property if you have kocan, unless you are like us and have no build permit or own electric!!!!!!

[karmels]

Keithcaley.

The transfer in question is about having your house inspected by the Tapu to see if the builder has built the house to the registered plans.
This must be carried out to enable a buyer to change the ( Plans ) into their name from the builders, you then pay the tax on the build ( if it is passed by Tapu ) then the forms are placed into the Tapu system. Sorry Tapu is the land registry. This will lead to the issue of the Kocan in the buyers name
I cannot comment on the legal system, IE permission to buy, but by this stage I think everything should have been in place.
I would not rely on the Advocat to chase this form, it will take aprox 3 years if all the correct papers are in order, after this time go to Tapu in Lefcosia and very politely ask how things are going with your file, this is a weekly event till you see some light.
At the end of the day you have to pay the tax, I do understand the feelings about the rise to 6% but I would also wait for the next elections, who knows what will happen then, but remember nothing comes down in life.

Hope this helps some people who don't understand the system.

Mel

[How188]

Thanks for very interesting and clear information, can you clarify for a "house owner" where I can check if the process of ownership transfer has been completed and all taxes paid on my property.

Is a Kocan a guarantee that all is OK?
I do have electric via Kibtec and pay "council" bills monthly and anually.

Is there anywhere a simple flow chart of the land/house building and ownership process. Who has to do what etc?

One could assume that the solicitors/advocats would manage the process to completion to the benefit of the "buyer" but I believe this is not true here?

[cyprusishome]

karmels
You can do this in 2 stages and probably best, assuming that this is a single build. The first is buying the land and the deeds IMO must be transfered at this stage to ensure security of tenure.

The second is transfering the house onto the deeds which is what you are talking about. Which involves inspection by the tapu. If you are on the north coast then the tapu is in Girne in the court building.

As for waiting to pay transfer tax, I would never sanction waiting for a change in government or anything else. As long as the kocan is not in your name there is a potential for memorandum or any of the other nasties thrown at buyers in this country. Also the builder or seller may decide the want to charge you for signing over the deeds, a regular occurence, which may be a simple "only £5k for signature" or "you must pay my taxes". Whatever the situation lessen your risk at every stage.

[cyprusishome]

how188
Go to Home buyers pressure group web site - http://www.hbpg-trnc.net you will find a full process for buying, where to go, what to do etc.

The Tapu in Girne is where you can check. If you have handed money through a third party for payment of taxes you should have a receipt.Also you should have a receipt of submission of paper work to Tapu.

As I have said, having the kocan, even a shared one as we have gives you security of tenure ie the builder etc cannot put a mortgage on it or place memorandums etc.

As for the legal profession........... You must tell them precisly what to do, it is no good saying draw up a contract as that is all they will do. The head of the Bar Association actually stated in a public meeting a couple of years ago they "have no duty of care to the client". I was there and like the few dozen others we fell off our chairs!!!

[karmels]

cyprusishome,

I agree with you 100%, I purchase my land and employed a builder.
When I purchase the land there was no tax, as a first time buyer ( retired ) but we did have to have the purchase approved, this took three months.
The builder in the meantime drew up the plans and presented them to the Government for aproval and a stamp on each plan.
When they were returned to the builder I think this would be the permission to build.
After the build was completed the builder and myself went to Kibtec to pay for the instilation of the electric meter.
The builder then contacted the Tapu who came out and inspected the build, then we payed the tax on the build.
It was after three years visiting Girne Tapu and being told it is still in Lefkosia (head office) we started to visit this office each week till one day they told us the papers were in Girne ready for collection.
This is our story on our build and that was a long time ago, I am unable to direct anybody to Government offices as I don't go there anymore and offices have changed over the years.
The house has since been sold and we moved into a flat in Girne because of the size, I did not pay sales tax on the house, you have one chance to avoid this tax, I chose to pay the tax on the flat and not pay the tax on the house that was a lot more.

Just to let people know we never employed a Advocat or a Notar when buying and building our house. the builder was honest and even replaced the roof after ten years under guarantee, his name was Fikri Terkan who is still building houses today.

Mel.

[cyprusishome]

karmels,

It is good to hear your positive experience. I know that a significant number of buyers do so with little or no issue. Your experience does offer hope for others.

Unfortunatley for the good builders like yours there are too many who have jumped on the band wagon and had not a clue how to process the legal issues or indeed build houses! This is why we are still in the deep brown stuff and you will see me banging away at the system.

David

[the butlers wife]

There must be some very lucky people out there who seem to have got there kocans without much trouble.
Can someone tell me what you can do when your developer just will not listen to pleas to do the parcellisation
and transfer titles, we have now waited six and a half years and have now been told it will be at least 2014 at
the earliest before anything will be done. Should there not be a time limit of say five years for the developer to
do this work and be forced to transfer title to owners who have paid in full together with the VAT?


The butlers wife

[Art]

I think you have two choices.

-offer to pay for parcelisation and his transfer tax.

-take out litigation for full breach of contract.

We have similar issues with our UK developer and after waiting 5 years for our Kochan we are now taking him to court.

[kiplet]

Butlers wife, after still waiting that length of time I seriously would question why you are still waiting ??

I presume you have checked all is ok with the deeds office, planning dept and all other avenues that all is above board on your builders side ??

[cyprusishome]

butlers wife,
Many people have got their koans, final approval etc with little or no difficulty. However there is a sizeable minority of people who have problems.

The first question I always ask people now is - is there a building permit for your site? Without this you cannot do parcelisation or get electric in your name. This along with shortage of cash could be the reason for delays.

Do you know that you can get a shared kocan? This is what many people have gone for to ensure that they have security of their land. You do not need parcelisation to get shared kocan. Parcelisation and final approval should be the last thing on an agenda IMO.

Why have you paid in full, surely your contract will have been in staged payments which allows some flexibility on your part?

As for going to court. The builder will have no money and all that I know who have taken this route have ended up worse off due to court costs and the fact that if you do win you may get some money but you will loose your home.

[the butlers wife]

Hi all.

Thanks for your replies, firstly we didn't buy off plan so we paid in full because the property was already finished with water, electric and roads
already complete. We bought from Medview Homes who we thought were a reputable company, we looked at several of their sites and at the build
quality, which we cannot fault. However, they do not want to do the parcelisation and transfer title deeds yet. We have visited the tapu office and been told that all the paper work is in order and all permits were given but there is nothing they can do as parcelisation has not been applied for. It would seem that lack of money could be the reason for this long delay. We have tried talking to Medview about this but we cannot even get an appointment to discuss it. There are 79 owners on our site all waiting the same as us for their deeds and some of them are reluctant to pay for parcelisation and transfer of title as they say it is in their contract that Medview will do this. They only come to Cyprus a couple of times a year where as we live here. Our lawyer says there is nothing she can do except write to Mr Safa but she will charge us for this and may not get a response. As time goes on it is becoming more and more concerning as we feel we are in limbo untill this is resolved.

Avril

[cyprusishome]

Given the number of homes on site and the owner I think you are stuffed. Sorry cannot be more positive, even you lawyer seems to have it right.

[CatalkoyChris]

Hi,
Is there anymore news on this 6% or 3% payment?

[Deniz1]

As I already stated its 3%