Stealth tax on property purchase ?

[13roman58]

With the property purchase tax reduced to 1% for first time buyers I have spoken to two buyers who

1,purchase price £85,000 including £6,000 for furniture valued by the government at £135,000 for tax purposes

2,purchase price £65,000 including £4,000 for furniture valued by the governmenrt at £120,000

Neither property was visited for valuation by anyone. Is this a way of recouping some of the tax lost from the differance at 3% ? has anyone got any experiance or views of this?

[laptatony]

Is this what the original valuation of the property on the original contract, plus an allowance for furniture? Did hear sometime ago the tax will be calculated on the higher of the original contract or current market price.

[Jonnie]

Part of the problem is that some are showing a contract price which is lower than the actual sale price to hopefully get off with less tax. I have known this happen on several occasions. Another problem is the amount of time taken to get to this stage.

I have multiple parcels, for some reason 2 were not transfered into the person who I bought the property from so were still in the "builders" name. This goes back 10 years or more. When it came to paying the tax on this very small parcel the builder refused because it was more than he had sold the land for in the first place, the person who sold it to me paid.

Whilst it is not "our" fault and we have no control over the period of time it takes for us to get PTPs it is however a lot quicker for citizens and the way it was explained to me was that this measure is in force because of the writing down of the contract value which the locals do. This is not my opinion but what was explained to me by a local.

[13roman58]

Current prices are back to 3 years ago look on Korinia web site you can get a 3 bedroom villa with pool for £70.000.

This is an unjust as no one has even looked at the properties or current prices so they are attempting to recoup some of the money they allowed in the so called reduction

Im sure that the current owners would be over the moon if they could realise the valuation placed on them by the government

[the butlers wife]

We live on a complex which had just been completed all but the landscaping when we bought our bungalow. We have paid considerably
more than our near neighbours who had purchased off plan and others at various stages of the build. At the moment we are in the parcellisation process and cannot understand how our neighbours will pay considerably less tax than us for the very same properties, just because their contracts show a different paid amount than ours. Shouldn't all the bungalows be valued at the same price however much you paid for them?

The butlers wife

[Jonnie]

Current prices are back to 3 years ago look on Korinia web site you can get a 3 bedroom villa with pool for £70.000.

This is an unjust as no one has even looked at the properties or current prices so they are attempting to recoup some of the money they allowed in the so called reduction

Im sure that the current owners would be over the moon if they could realise the valuation placed on them by the government

Have you looked at those £70K properties? Have they got "issues", do you know?

[13roman58]

Jonnie it still doesn,t validate the values that the government dept are applying while sat on their butts

,I still believe that it is an attempt to recoup monies while stating that they are doing every thing they can to stimulate the economy.

[Jonnie]

The argument may hold more water if they were using different valuations before the discount was brought in.

See if your lawyer can challenge them, failing that go and try to plead your case at the Tapu you will be surprised at what you can achieve.

[caulkhead]

I am not sure if everyone knows but 1% only applies to new properties. Secondhand sales are still at 3%, which seems a bit unfair. My lawyer says the Land Registry have only just realised this and some recent transfers have gone through at the wrong amount. Not sure what they are going to do about it.

[tomsteel]

If the government does not change the law and require developers/builders/land owners to honour contracts and give vendors their title deeds it will not matter what valuation, purchase tax etc is applied because very few properties can be registered with the Tapu. Various ministers in various different governments all state how much they value/want UK expats to be here, yet they will not action common sense, reasonable laws to facilitate fair play. I heard the Minister for Foreign Affairs state at the pre- BRS AGM last Saturday how much the Government values us, understand there are issues and a 'one-stop shop' will be set up to deal with such issues. The 3rd such organisation in my short 5+ years here. Time will tell! However, if the TRNC/RoC arrange a coupling and TRNC gets EU status - "fireworks will ensue" as the litigation against the TRNC Government will overwhelm it.

[PoshinDevon]

I am not sure if everyone knows but 1% only applies to new properties. Secondhand sales are still at 3%, which seems a bit unfair. My lawyer says the Land Registry have only just realised this and some recent transfers have gone through at the wrong amount. Not sure what they are going to do about it.

Interesting point as we are going thro the process now, we have budgeted for 3% but like many were pleased to hear it had been reduced to 1%.

We know many TRNC solicitors have recently encouraged those who have not taken title transfer to take advantage of this reduction. I believe they were saying that 1% applies if it was "your" first title transfer...if it was your second/third etc then it did not apply. Would think it strange that the TRNC govt would not want as many as possible to take advantage rather than restricting to new purchases only....as this will not generate that much income in the short term. Believe there is a time limit on the 1% as well...July/August?

Oh well lets wait and see!