"Beware of Cyprus property scams - Financial Mirror"

In order to obtain a residence permit, it is necessary to purchase residential property worth at least300,000 euros. In order to obtain a passport (when it was possible), the minimum value of the property was set at500,000 euros (plus VAT).

However, in some cases, real estate agents, intermediaries, developer-entrepreneurs, and others inform potential applicants that the decisive factor is not the purchase amount, but the actual value of the object. For example, during a recent briefing with a client in Larnaca, a real estate agent told him that, although the price of the apartment he was going to buy was €170,000 (the agreed-upon price), he could still get a visa because the apartment's value was at least €300,000. This is a deception, because the state will not accept such a statement regarding the €300,000 limit. If the client falls for such promises or assurances, he may end up without a visa and, most likely, after paying €170,000, as well as lawyers' fees and other expenses, he will be left out in the cold and wonder what went wrong. This is a dangerous phenomenon that can harm this very successful measure, which attracts foreign investors. Therefore, the Ministry of Internal Affairs should issue a directive or statement on this matter, clarifying what is meant by "value" and how it correlates with the purchase price.

"In an attempt to persuade inattentive applicants that a lower price will mean less expenses for transmission (in favor of the buyer), various intermediaries and sellers will not tell them that in the case of resale, the profit sales tax will be higher. As for the transmission expenses, the appraisal will be carried out by the Land Registry."

Another interesting example is that visa applications for new properties are processed in about six months, while for the secondary market (resale) an applicant may wait for a year. This is very strange because it puts sellers in an unequal position, which may or may not comply with the Constitution (where all are equal). I understand why such a situation exists (to stimulate development), but caution is required.

Another example of fraud is the fees of lawyers and accountants for carrying out the visa process. A lawyer asked our client in Paralimni for a fee of €7,500 for the visa procedures and when we offered him to refuse, he received a letter from a large law firm for the same service for €2,500.

In another case, a Chinese real estate agent offered to sell a plot in Protaras to a private individual for €3.0 million, but suggested that a deed of sale be drawn up between them first (for a lower amount) and that after six months he would sell it for a much higher amount, receiving the difference. In this case, problems (recording of the sale, taxes on the higher price) were foreseeable, but the value of the property did not exceed €2.0 million and the enticement for the Cypriot seller was great.

The measure has now generated many billions for the Cypriot economy in recent years, which could be at risk due to dishonest behavior and lust for money.

Finally (although there are other frauds), in relation to racketeering, we were informed by a client who is the largest shareholder and director of a project in Ayia Napa that through a false statement another shareholder had submitted a declaration to the Registrar of Companies that he had purchased the shares of the former and that he was the owner. The problem was uncovered because the racketeer had sold the property to third parties who also submitted the contract to the Registrar of Lands. Having discussed the matter with the Registrar of Companies, he informed us that they cannot verify the authenticity of such declarations and generally "anything you submit, they accept" - especially if it is in electronic form, so who else is insured? Perhaps our agency could also lose its real estate trade name because a third party submitted the form to the Registrar. This is shocking, especially for a country aspiring to become an international financial center.

I don't believe this situation exists - but it does.

Antonis Loizos F.R.I.C.S. - Antonis Loizou & Associates EPE - Real Estate Appraisers, Real Estate Salespersons and Project Development Managers