Incentives and measures of rekindling property purchase

  Article By : Marinos Kineyirou|  Published at : Politis Newspaper| 09-09-2012

Marinos Kineyirou: Vice-president of the Cyprus Association of Estate Agent Entrepreneurs, President of the Real Estate Agent Entrepreneurs Association of Larnaca- Famagusta and Property Auctioneer.

Marinos kineyirou Manager of Marinos Estate Agencies LTD

Marinos Kineyirou Manager of Marinos Kineyirou Estate Agencies LTD

INCENTIVES AND MEASURES OF REKINDLING PROPERTY PURCHASE

 

The real estate market continues to be numb until today, even after the two legislations passed by the Parliament concerning the abolition or the 50% reduction of transfer fees and the reduced VAT rate for first-time residence buyers to 5% from 17%. It is the third consecutive year the real estate market shrinks, affecting the state’s revenue negatively. Very important was the amendment of the VAT Act passed by the House of Representatives on May 24, 2012, to extend to citizens of countries outside the EU, with no requirement for the applicant to be a resident of Cyprus. The Vice-president of the Cyprus Association of Estate Agent Entrepreneurs, President of the Real Estate Agent Entrepreneurs Association of Larnaca- Famagusta and Property Auctioneer, Mr. Marinos Kineyirou, is not so optimistic about those adjustments due to the lack of funding liquidity and the increased rate of interest for residential loans that prevent the interested buyers to invest.  As he said, the measures can not by themselves change the market’s image especially during this period of economic crisis and we should immediately put into effect the recommendation of the association for 0% transfer fees for all properties, not just those subject to VAT. This change will help the market and create mobility in the real estate sector. Until today, however, although promises were made by the state for their realization, nothing has materialized yet. Mr. Kineyirou highlighted that despite the fact that the two legislations seemingly deprive revenue from the state, they will actually result in increased revenue by the reactivation of the construction industry from fees and taxes as well as big savings on unemployment subsidies. The Cyprus Association of Estate Agent Entrepreneurs also recommends the immediate and proper promotion of the two legislations which concern the abolition or reduction by 50% of transfer fees and the reduced VAT rate for first-time residence buyers to 5% from 17% which are valid until 31 December 2012, in all mass media of Cyprus, in the European Union countries and so on. As Mr. Marinos Kineyirou stated, the association tries in every possible way to inform both the existing and new buyers but they are few to be able to inform others.

THE BUYERS MUST LOOK FOR LOW PRICES TODAY …

 

Mr. Marinos Kineyirou states that most consumers believe that this period is not appropriate for purchase or saving. The buyers are looking for low prices and because of the uncertainty in the banking sector they prefer to make secure investments from the deposits with the purchase of a property.

IT IS TIME TO SOLVE THE PROBLEM OF TITLE ISSUES AND THE SYSTEM NEEDS MODERNIZATION

A great incentive to revive the real estate market is the immediate issue of title deeds. Title implies property selling and large amounts of money in the state treasury that will give great results in the existing legislation. This important incentive in combination with the decline in prices recorded as a result of the reduced demand for properties and the general slowdown in the economy will create an environment where investors and consumers will be able to use it properly.

THE BUILDING AMNESTY WILL BRING INCOME OF MILLION EUROS IN THE STATE

The problem of title issuance is one of the problems accumulating for many years now.  Cyprus is traduced abroad as problematic because the market does not issue titles and traps the buyers. The building amnesty in all kinds of buildings will bring revenue of million Euros in the state and serious cuts are necessary to achieve the functioning of the property market which is the main source of revenue for the Republic of Cyprus. Mr. Marinos Kineyirou stresses that it’s time to solve the problem of the title issuance and the licensing system requires modernization because it is very time-consuming in terms of bureaucracy and various departments of the state involved are not bound to specific times of issuing permits.

The Vice-president of the Cyprus Association of Estate Agent Entrepreneurs, President of the Real Estate Agent Entrepreneurs Association of Larnaca- Famagusta and Property Auctioneer Mr. Marinos Kineyirou proposes, among other things, when buying a property and reselling it within a year it should not have any tax on its sale.

The additional incentives will convince the interested buyers to proceed with the purchase of a property and we hope to have immediate results and attract foreign investors.

To conclude, Mr. Marinos Kineyirou stresses that the existing incentives should not only be maintained but provide new in order to keep alive the real estate market and the jobs in the private sector.

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