Concerns have been aired in Cyprus about the legitimacy of a new rule that could hamper property sales in the future, with critics questioning whether the new moves are even legal. Under the new proposals, the tax man in the nation would have the ability to stop the transfer of ownership of the last property owned by any individual if that person still owes taxes, Cyprus Mail reports. It is thought that this could seriously slow the number of property sales when it comes to high-end investors in particular.
Lawmakers have said the potential new ruling, which would require an individual to obtain a certificate from Inland Revenue to say all their taxes have been paid, could cause issues, and questioned whether or not two such unrelated issues could legally be tied together in this way. Committee chairman Nicolas Papadopoulos questioned “whether you can impose such an obligation that has nothing to do with the property, something that was judged by the Supreme Court as unconstitutional.”
Other fears included the fact that it may hamper the ability of banks to lend to buyers in Cyprus if the state has first call on any money owed. MPs said that it could potentially hamper the value of a home if it is impossible to sell on, which could lead to institutions hedging their bets rather than lending to people who may struggle to sell in the future. “If the state is allowed to collect its dues first it will mean the property will have a lower value,” Papadopoulos added.
Finally, MPs said that there are potentially issues that richer people would be favoured by the law. For example, if someone has a lot of properties but owes a lot in tax, there would be nothing to stop them transferring the ownership of homes. However, if someone on a low income has only one property and owes a small amount in tax, they would be stopped from selling.
It is the latest consideration that British people will need to consider in popular holiday property destinations this week, coming just days after it was announced that lawmakers in Spain are trying to bring about changes that would see it become illegal to let out holiday homes without a licence.