15% Tax for owners of property on ex GC land

Hector · Post by **Hector** » Sat 03 Mar 2018 3:59 pm

I've just seen the headline in the Cyprus Today saying that the IPC wants to place a 15% tax bill on owners of ex GC 'exchange land' property. Can anyone throw any light on this?

ttoli · Post by **ttoli** » Sat 03 Mar 2018 7:54 pm

Better off reading the daily Star, Bus found on the Moon etc

Keithcaley · Post by **Keithcaley** » Sat 03 Mar 2018 8:12 pm

ttoli wrote:...Bus found on the Moon etc

Was it a number 62?

I wondered where they all went to when I was stood at the bus stop!

frontalman · Post by **frontalman** » Sat 03 Mar 2018 9:32 pm

Despite the levity I think this has been considered for some time now, and may have legs. It would be a nightmare to administer and enforce however.

ttoli · Post by **ttoli** » Sat 03 Mar 2018 9:38 pm

Indeed !, was talked about when I bought my first property here in 2004 and every so often it crops up

turtle · Post by **turtle** » Sat 03 Mar 2018 10:24 pm

But 15% of what ?

jofra · Post by **jofra** » Sat 03 Mar 2018 11:16 pm

Depends on whether the authorities are prepared to wait - if they are, 15% of what you sell for (whenever); if not, 15% of what value is estimated - most definitely not estimated by you, but by the authorities....

turtle · Post by **turtle** » Sun 04 Mar 2018 12:03 am

I would suggest 15% of the land value....not the property value....but when it was bought or when it was sold ...bit unfair to charge someone 15% if they have only owned it for say 1 year when someone may have owned it for say 20 yrs before selling ....it sounds so open ended to me.

jofra · Post by **jofra** » Sun 04 Mar 2018 12:59 am

The simple, plain and unvarnished fact is that length of ownership will probably be ignored/classed as irrelevant. The (proclaimed) purpose of this tax is to provide sufficient funding to settle claims through the IPC, and therefore the aim will be to acquire the quickest and highest return that is possible, in order to deal with the expected increase in claims.
The option which provides the highest return is the one which will be chosen...

Keithcaley · Post by **Keithcaley** » Sun 04 Mar 2018 7:18 am

Current value at the time the tax is assessed, then!

That could be more than was originally paid for the property, the way that prices have gone up...

come_on_aylin · Post by **come_on_aylin** » Sun 04 Mar 2018 7:36 am

So Esdeger title was issued for equivalent land and property abandoned by TCs in South. So why don't the government pursue compensation from the South to pay for the IPC funds? After all, property there is worth so much more.
Also, if the title for the land is in the builder's name, who do they pursue for the 15%?

Kanonier · Post by **Kanonier** » Sun 04 Mar 2018 8:09 am

ttoli wrote:Better off reading the daily Star, Bus found on the Moon etc

I remember that, it was the one they used in "Summer Holiday".

Keithcaley · Post by **Keithcaley** » Sun 04 Mar 2018 8:10 am

come_on_aylin wrote:...who do they pursue for the 15%?

The current 'Legally recognised' (in TRNC at any rate) owner of the land; the person whose name is on the Koçan - that's what seems to take precedence in all other disputes! ... Plus! it's simpler, it saves having to think about it, and having to make 'value judgements' - I can't see 'em going out of their way to make hard work, can you?

Cynical, I know, but it's no skin off their nose(s), is it

frontalman · Post by **frontalman** » Sun 04 Mar 2018 10:02 am

No such thing as esdeger any more, all title deeds now issued have scrapped any previous classifications. Our title deeds make no mention of Esdeger or anything else including previous owners. I thought it was strange that our little bungalow on 1.25 donums was valued at 750,000TL by the then Tapu authorities - now it makes sense. We bought the land and built the house ourselves which means the previous GC owner (who only owned the land from 1960 to 1974 (previously it was British owned grazing land I was told)) will only be compensated for loss of land, presumably. However, I believe the new tax will be levied on value of property as it stands, because that will all increase in value, allegedly. So we may be asked for 112,500TL. This wouldn't be so bad if the increase in value were a given, but of course it's not.

pc4854 · Post by **pc4854** » Sun 04 Mar 2018 10:16 am

Sorry Frontalman but you are not quite correct. I have just paid 80Tl to ascertain the standing of my land and I have been issued with a certificate to say that it is Esdeger Title, so although it is not on the deed, it is so recorded with Land Registry.

waddo · Post by **waddo** » Sun 04 Mar 2018 10:28 am

So, will that mean that all the TC's who were relocated onto pre Greek owned land in 1974 will also have to pay this wonderful 15% tax as well - including those in the new government of course - lol?

Keithcaley · Post by **Keithcaley** » Sun 04 Mar 2018 10:35 am

waddo wrote:So, will that mean that all the TC's who were relocated onto pre Greek owned land in 1974 will also have to pay this wonderful 15% tax as well - including those in the new government of course - lol?

Unless they grant themselves a 'Special Exemption'!

frontalman · Post by **frontalman** » Sun 04 Mar 2018 11:37 am

pc4854 wrote:Sorry Frontalman but you are not quite correct. I have just paid 80Tl to ascertain the standing of my land and I have been issued with a certificate to say that it is Esdeger Title, so although it is not on the deed, it is so recorded with Land Registry.

Aaahh, fiendishly clever those Chinese!

Sallywebstersnipples · Post by **Sallywebstersnipples** » Sun 04 Mar 2018 2:15 pm

What will you get in return for your 15% tax?

Kanonier · Post by **Kanonier** » Sun 04 Mar 2018 2:23 pm

A piece of paper?

Sallywebstersnipples · Post by **Sallywebstersnipples** » Sun 04 Mar 2018 2:38 pm

Kanonier wrote:A piece of paper?

What is the colour and thickness of this piece of paper?

pc4854 · Post by **pc4854** » Sun 04 Mar 2018 4:07 pm

It might be an unsigned blank cheque

waddo · Post by **waddo** » Sun 04 Mar 2018 5:02 pm

Whatever it is - it will be in Turkish for sure!

sophie · Post by **sophie** » Sun 04 Mar 2018 5:08 pm

If every property is dealt with on a property by property basis I wonder:-

How long will it take to deal with each property

Will anyone want to buy your property, just in case they are the ones lumbered with said property when they get round to No. 22 Acacia Avenue. (a bit like pass the parcel!!)

It could bring house sales to a grinding halt OR

Expats etc putting their properties on the market at a whacking great loss in order to get out of the whole hullaballoo.

Who knows, but whatever happens, we poor saps will be the last to know and the first to have to pay up. (that's if you have the money of course)????

frontalman · Post by **frontalman** » Sun 04 Mar 2018 5:23 pm

waddo wrote:Whatever it is - it will be in Turkish for sure!

How could it be in any other language?

David · Post by **David** » Tue 06 Mar 2018 11:09 am

Sounds like a nail in the coffin of any future property sales until its all sorted out.

Keithcaley · Post by **Keithcaley** » Tue 06 Mar 2018 11:24 am

David wrote:Sounds like a nail in the coffin of any future property sales until its all sorted out.

Add the 15% to the Sale price, and then agree to discount it, so that the purchaser will have the cash to pay for it!

It could add some degree of security to the tenure of the Property in the unlikely event of a 'settlement'.

Always assuming that anyone, anywhere, at any time, will have the slightest idea of what value the 15% tax will be based on...

On the other hand, perhaps you're right!

waddo · Post by **waddo** » Tue 06 Mar 2018 12:52 pm

Sorry, I meant it will be in Cypriot! It would be better in Turkish but then everyone would be able to understand it?

waz-24-7 · Post by **waz-24-7** » Wed 07 Mar 2018 10:38 pm

I don't think the IPC have any jurisdiction within the TRNC.
It is an international commission to secure remedy for property grievances.

frontalman · Post by **frontalman** » Thu 08 Mar 2018 8:53 am

waz-24-7 wrote:I don't think the IPC have any jurisdiction within the TRNC.
It is an international commission to secure remedy for property grievances.

Are you sure about that? I thought it was a domestic remedy.

waz-24-7 · Post by **waz-24-7** » Thu 08 Mar 2018 10:30 pm

frontalman wrote:
waz-24-7 wrote:I don't think the IPC have any jurisdiction within the TRNC.
It is an international commission to secure remedy for property grievances.
Are you sure about that? I thought it was a domestic remedy.

The TRNC cannot possibly administer or finance the IPC.
I am certain the TRNC administration will not enter or be party to financial settlements with any Greek Cypriot making financial or other claim for remedy.

jofra · Post by **jofra** » Thu 08 Mar 2018 10:59 pm

"The Immovable Property Commission officially began its activities on 17 March 2006, upon the appointment of its President, Vice-President and members by the Supreme Council of Judicature among persons nominated by the President of the Turkish Republic of Northern Cyprus and re-esatblished in accordance with the Law No. 67/2005."

From here (paragraph 3)...

frontalman · Post by **frontalman** » Thu 08 Mar 2018 11:16 pm

Just as I thought.

kerry 6138 · Post by **kerry 6138** » Thu 08 Mar 2018 11:53 pm

https://www.lgcnews.com/new-local-tax-will-fund-ipc/

The Immovable Property Commission (IPC) works effectively and that since 2006, it has concluded 1,086 cases from a total of 6,409 applications filed by Greek Cypriot applicants regarding their properties, IPC chairman Ayfer Erkmen has said

Reyntj · Post by **Reyntj** » Fri 09 Mar 2018 7:14 am

It would make sense to me that the 15 % would be levied on the land value or property that was built pre 74 owned by Greeks as that is what the compensation is calculated on . If land has been developed ie built on it will not include tax on the new building . The valuation will be low . Also perhaps it may be an annual tax over 10 years ie 1.5 % per annum and if you don’t pay interest rolls up similar to the beledeysi tax now . For owners of Greek Cypriot house it would be quite expensive but for the average exchange land with a post 74 building not too much . The authorities have all this information available ie current council tax is calculated on square meter and Kocans have the size of the land . There will be a standar valuation per square meter if the building was pre 74 Greek Cypriot .

An average villa is on about 1/3 rd of a donum.. For valuation purposes for compensation a flat valuation will apply something like £40000 per donum. So 1\3 rd if this is c £1300 and 15 % of this is only £1950 over 10 years is £195.

Despite the pledges by various trnc officials over the years regarding exchange title I believe if a tax like this was introduced and your property was then Turkish title it would be beneficial overall. Clearly I’m just hypothesizing . If you lived on a complex of flats this tax would be a lot less and vice versus if you live in a 6 donum Greek built villa .....

Also there will still be a contribution from turkey as I seem to remember Erdogan committing to funding the IOC but wanting trnc homeowners to contribute . Its the president Erdogan who calls the shots here so its my belief he will get his way .

frontalman · Post by **frontalman** » Fri 09 Mar 2018 9:36 am

Yes that would make sense, but I doubt they are thinking along the same lines. They may need to raise big money fast. But I hope you are right.

waz-24-7 · Post by **waz-24-7** » Sun 11 Mar 2018 8:28 pm

The IPC has the task of dealing with property claims including restitution payments.
I cannot see how they are able to administer any sort of levy upon holders of legitimate TRNC title deeds.

The TRNC would surely not permit such persecution within their territory without some sort of reciprocal levy on property in the South.
Settlement monies paid out to date most certainly do not come from the TRNC. Turkey certainly and the EU I believe.

Reyntj · Post by **Reyntj** » Sun 11 Mar 2018 9:00 pm

If I Remember correctly Erdogan said he wanted trnc property owners to contribute 15 % of the compensatin Turkey would chip in 40 % and the rest from other bodies . So it’s entrely possible that’s what they are talking about and a tax will b levied which may no be 15 % but will enable the Ipc to pay 15 % of any claim with revenue from tax .

Clearly the ipc cannot enforce this tax or collect it themselves. It will have to go via the appropriate channels . But considering turkey funds trnc they have very powerful leverage in these matters .

waz-24-7 · Post by **waz-24-7** » Sun 11 Mar 2018 9:49 pm

Reyntj wrote:If I Remember correctly Erdogan said he wanted trnc property owners to contribute 15 % of the compensatin Turkey would chip in 40 % and the rest from other bodies . So it’s entrely possible that’s what they are talking about and a tax will b levied which may no be 15 % but will enable the Ipc to pay 15 % of any claim with revenue from tax .

Clearly the ipc cannot enforce this tax or collect it themselves. It will have to go via the appropriate channels . But considering turkey funds trnc they have very powerful leverage in these matters .

I cant really see the TRNC government doing that can you? Imagine the Turkish Cypriot agreeing to pay?
Will businesses pay a levy? Will South Cyprus also contribute and how?
Will Turkey try and enforce some legislation? Not without reciprocal legislation in the South. We all know the level of agreement there.
I think this solution has no legs.

Reyntj · Post by **Reyntj** » Mon 12 Mar 2018 7:52 am

Yes I can see the trnc doing exactly that . Will turkey try and enforce some legislation ? - 100 % yes they supply the money and they have massive influence here . Will business pay a levy ? This will be a property tax so only if they own property. Will south Cyprus contribute ? Not directly . Via the eu .

Resolving the property issue would be beneficial to all . Its actually shortsighted to oppose it . The result would be a significant increase in property prices eventually which would far outweigh any taxes paid . The gain an individual would have would very likely be much higher than any. Taxes paid . It might be a bit painful at the time but would be financially enhancing eventually .

It would be great if turkey and others would fully fund wthe ipc wholly but you can’t have your cake and eat it .

frontalman · Post by **frontalman** » Mon 12 Mar 2018 8:47 am

waz-24-7 wrote:The IPC has the task of dealing with property claims including restitution payments.
I cannot see how they are able to administer any sort of levy upon holders of legitimate TRNC title deeds.

The TRNC would surely not permit such persecution within their territory without some sort of reciprocal levy on property in the South.
Settlement monies paid out to date most certainly do not come from the TRNC. Turkey certainly and the EU I believe.

The IPC is a TRNC organisation, set up as a domestic remedy. Their head suggested this tax, but the govt may or may not decide to impose it. I met the new Prime Minister yesterday at Baglikoy, he seems like a decent chap. I offered him my number in case there was anything he wasn't sure about, but he said it was OK he already had Keith Caley's.

Keithcaley · Post by **Keithcaley** » Mon 12 Mar 2018 9:57 am

I 'ates you, Butler!

waz-24-7 · Post by **waz-24-7** » Tue 13 Mar 2018 9:30 pm

Reyntj wrote:Yes I can see the trnc doing exactly that . Will turkey try and enforce some legislation ? - 100 % yes they supply the money and they have massive influence here . Will business pay a levy ? This will be a property tax so only if they own property. Will south Cyprus contribute ? Not directly . Via the eu .

Resolving the property issue would be beneficial to all . Its actually shortsighted to oppose it . The result would be a significant increase in property prices eventually which would far outweigh any taxes paid . The gain an individual would have would very likely be much higher than any. Taxes paid . It might be a bit painful at the time but would be financially enhancing eventually .

It would be great if turkey and others would fully fund wthe ipc wholly but you can’t have your cake and eat it .

Hmm
Beg to differ. Turkey see TRNC as their back yard. They need Turkish Cypriot support in order to justify their occupation. If the Indigenous populous turned against Turkey, as the Greeks side are hoping and promoting then Turkey will be soon evicted as proper occupiers and not the Guarantor saviours of the poor Turkish Cypriot.
Essentially Turkey are buying the allegiance in my view.

What guarantee would paying a tax hold for Esder title holder. Very little I think.
The scheme would be very difficult to administer provide very little revenue , be very difficult to administer and overnight kill the property market.

Reyntj · Post by **Reyntj** » Tue 13 Mar 2018 10:13 pm

I think u will find trnc need turkey a lot more than turkey needs trnc . Exactly where would trmc get the money that comrs from turkey ? Without turkey trnc would be bankrupt and withoutbthe security ..........

Reyntj · Post by **Reyntj** » Tue 13 Mar 2018 10:16 pm

Also regarding your title point once compensation is paid its not exchange its turkish title . So the more claims the more turkish title

Reyntj · Post by **Reyntj** » Tue 13 Mar 2018 10:22 pm

Your probably right though i dont think theres anything wrong in my view what the ultimate problem is all these politicians and decision makers are in it for themselves and not the greater good of the trnc people . They should bring n a tax and it would ultimately pave the way for settlements and increased wealth . However they wont bcause the politicians agendas are aimed at their own popularity etc . So like everything else to do with the cyprus issue sod all will happen . So your very likely right in the end which ever way you cut it !

waz-24-7 · Post by **waz-24-7** » Tue 13 Mar 2018 10:33 pm

Reyntj wrote:I think u will find trnc need turkey a lot more than turkey needs trnc . Exactly where would trmc get the money that comrs from turkey ? Without turkey trnc would be bankrupt and withoutbthe security ..........

Certainly The TRNC rely massively upon Turkish handouts. Turkey wants Cyprus as their battleship back yard. Bit like the UK wants the Falklands and Gibraltar as command bases. Turkey is buying its presence on Cyprus by supporting the TRNC administration. The ROC desperately try to undermine this allegiance so that Turkish presence becomes absent of justification.
The TRNC would be bankrupt without Turkey. Yes correct. Without this finance what would happen. The Island would become unified as the south side and EU would promise support , embargoes would be lifted and the North would become the new economic growth model.

Without Turkey. The TRNC will become part of the ROC. Title will ONLY be ROC title. Turkish title has effect ONLY whilst turkey supports the TRNC and has presence on the Island.

erol · Post by **erol** » Tue 13 Mar 2018 11:06 pm

If you bought land that had a 'disputed title' at the time you bought and the person who can dispute that title settles with the IPC you title moves from being disputed and potentially disputable in the future to one that is no longer 'disputed' or potentially disputable in the future. This is what has already happened on those 'disputed titles' that have already been settled at the IPC. Once settled at the IPC there is no longer anyone who can dispute the title.

As someone who has bought a house built on land that was and afaik still is 'disputed title', I have no problem with the concept that some 'tax' is payable by me on the following conditions.

1. The tax is only levied at the point in time when the specific land concerned has been settled by the IPC. If anyone who could make a claim has had their claim met by the IPC then I am ok to have a tax levied on me but I am not ok to have a tax levied on me before that happens.

2. the level of the tax is in the same ball park or less than the amount by which my property will increase in value as a result of it moving from a status of being on 'disputed title' land to 'not disputed'. 15% of its current sales value would meet this condition imo

3. I am given reasonable terms in which to meet this new tax liability. My preferred option would be to have the choice of having it as a one off sales tax payable when I (or my heirs) sell the property or a one off up front payment when the land concerned is settled at the IPC. I could choose to pay it up front at the point at which the land concerned is settled by the IPC, on the basis that paying 15% of the value of the property at that point would be less than 15% of its value in the future, or deffer payment till I sell on the basis that I do not want to pay the money now and would prefer to deffer it even though it will be a higher amount in the future.

A one off sales tax due on disputed properties, as they are settled at the IPC, payable when that property is next sold would be easy to administer. The government could easily raise money today secured against such taxes to paid in the future if done properly.

This to me would equate to a fair and equitable system. I bought disputed title property and the price of it reflected this fact. If its status is changed to no longer disputed or disputable because of a settlement via the IPC, the value of my property will increase. That this increase in value should not accrue to me personally is not to my mind unfair or unacceptable in principal though of course the devil will be in the details.

Reyntj · Post by **Reyntj** » Tue 13 Mar 2018 11:20 pm

https://www.pressreader.com/cyprus/cypr ... 6456637526

If you have the time to read the above article it may explain the rationale by the sudden call for a tax for the ipc

erol · Post by **erol** » Tue 13 Mar 2018 11:42 pm

Reyntj wrote:https://www.pressreader.com/cyprus/cypr ... 6456637526

If you have the time to read the above article it may explain the rationale by the sudden call for a tax for the ipc

Thanks for that link Reyntj. Was away in December so I missed that one. Are you aware of anything developments re this case since the linked article above was written ?

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