Good news for land for sale in Larnaca, Cyprus

Photo credit: Cyprus Driving

Good news if you're trying to sell that land for sale in Larnaca, Cyprus: those property tax changes the industry has been waiting for officially come into effect this month.

The change to the tax laws on the Mediterranean island will see property transfer fees reduced for the next six months. It is a move designed to stimulate sales in Cyprus, where activity in the property market has been subdued for some time as Eurozone fears take hold.

The number of transactions dipped in 2011, according to the Royal institution of the Chartered Surveyors Cyprus Property Index, with foreign buyers avoiding investment in the country’s real estate. As a result, house prices fell in the second quarter of the year, with Larnaca taking the biggest hit: a drop of 3.2 per cent.

Overall, prices were down 15.1 per cent for apartments, 9.9 per cent for houses, 12.2 per cent for retail and 9 per cent for office property, compared to the data from 2009. But developers in Larnaca can relax a bit now, as the property transfer fee reduction finally arrives.

“It means that those who pay VAT on their house purchase will now not be liable for transfer fees and for those who do not pay VAT on their purchase, property transfer fees will be reduced by 50%, as long as they are within this window of opportunity,” explains Property Community.

With the Cypriot government promising to be firm in the face of potential tax breaks for buyers – who could theoretically change dates on their contracts held at the Land Registry to make them eligible for the discount – the industry is optimistic about the market’s future.

“This should inject some life into the Cyprus property market as buyers who have been waiting in the wings should now be happy to purchase,” Richard Way, of the Overseas Guides Company, told Property Community.

The reduction may not directly affect land sales, but if international interest is property piqued, Cyprus property (and land) owners may finally see sales rise again.