You missed a point, Mr Minister
How will the developer meet the 2017 deadline when the planning permission alone needs six months or more to obtain, in addition to al the other permits?
The last measure for the relief on mortgages and other tax burdens, including property tax, is the best, as is the buyers now taking full responsibility for the property tax.
Throughout this whole process of an abundance of measures he introduced and of course attracted foreign investors due to the changes in the tax regime, you might have missed a problem that seems to linger.
While properties were freed from mortgages and other burdens, there remain the charges set by the municipalities for local taxes and fees for the sewerage. As a result, the transfer of properties has once again stalled because of the tax burdens that need to be cleared in order for a new title deed to be issued.
So, once again new buyers are stuck over taxes whose main beneficiaries are the owners of the units.
As an example let’s see the case of a residential project with 84 apartments and titles ready to be transferred from the year 2013, but due to the lack of interest or a difficulty to pay for the transfer fees, the developer is debited with the 39 for which there is no interest to transfer their units.
Even though there is the possibility of some authorities to allow transfers per unit, they set conditions of when and how the developer should pay for the rest. So, while the tennants of these units ‘enjoy’ the free services of the local municipality, the fees are charged to the registered owner or developer. It was wrong not to exclude transfers from the charges of the municipal taxes. The system adopted for the Income Tax, whereby the owners or buyers bear responsibility for their payment, so should a measure be adopted in this case for the buyers to take the responsibility.
The non-payment of these local taxes unfairly burdens the registered owners and certainly prevents to some extent the developers/owners to proceed with the issue of title deeds due to financial difficulty (apart from the various consultants who will need to be paid, there is the cost of the local authorities for the issue of such deeds). This problem can be solved with a swift Cabinet decision which will greatly help the situation.
While discussing the omissions of the system, there are some other issues that need be addressed as well.
Incentives – Those that have been granted for projects that see the start of building work by 2017, is also a plus for the construction sector. However, the incentives note that such licenses should be issued within three months. But in practice this is not done and we have cases of six months having passed and the developer is still awaiting permits.
So, how will the developer meet the 2017 deadline when the planning permission alone needs six months or more to obtain, in addition to al the other permits. The system whereby such applications are reviewed by committees and various government departments is the worst that can be. Therefore, if the Minister was review the various dates for the applications and the as-yet non-issuance of permits, he will see for himself that there is a time gap which needs to be resolved immediately.
At the same time, the new incentives include town planning and zoning issues regarding the percentage of common ownership that the Land Survey Dept. itself had a problem as it did not know how to deal with it. Despite all the good intentions of the Director of the Lands Surveys Dept. and his associates, there is a difference in opinion between the Town Planning Office and the Land Surveys Dept. So, here too this commendable effort of the incentives has once again stalled.
The most notable effort is the reduction by 50% of the transfer fees provided that the title deeds exist by the end of 2016. On the one hand this is good, but if the procedures are being delayed further by the authorities, it is reasonable to extend the rebate, depending on what extent the owner / developer is at fault. While there is a political will and a somewhat increase in the rate of issue of title deeds, the outdated procedures seem to remain, as a result of which this measure is also delayed. Therefore, I believe it would be very logical for the proposal to extend the timeframe for the discount if this is not due to indifference or the developer’s fault but that of the authorities.
Without this being the Minister’s problem to deal with directly, there is also the problem of the release of mortgages, but for the lenders to release the property for transfer now request additional information. Not only that the buyer has met all the obligations, but the lenders seek to establish whether the payments were deposited with the financing bank. Where in the law is this mentioned? This is an illegal demand while in the case of some projects, instead of any request for release of the mortgage be reviewed separately of the lenders, they insist to review the totality of the units - which in the case of a project of 80 apartments the lenders want all 80 properties to be reviewed one by one. As a result, the transfer is delayed to beyond the year 2016, when the 50% discount on transfer fees expires. So, in such cases I suggest that any difference in the transfer cost be burdened by the lender.
A note from the Minister will help the buyers and compromise the lenders. There is also the possibility of an application for the transfer through the Land Surveys Dept., but with 5,000 applications already piled up and currently waiting period, which according to the Dept. is 6-8 months, how will the Land Registry be ready to transfer these deeds by the end of 2016 in order to benefit from the 50% transfer fee discount. Perhaps here, the period for the 50% discount be extended, as long as the request is submitted before 31.12.2016 and provided that the other terms remain in force as at the date of the request the latest 31.12.2016.
I therefore submit to the Minister of Interior our industry’s concerns that require immediate resolution and which thoughts are based on real cases for which there are concrete examples.
I congratulate you, Mr Minister, for your tireless efforts, but this is a matter that will become worse if the imaginative steps introduced by this government cannot be implemented because of certain omissions and because of the attitudes some who believe that they are in control of the situation