14.10.2023
To obtain permanent residence, you must purchase housing with a minimum cost of 300,000 euros. For the “golden passport” (when it was in force) the minimum value of a house was set at €500,000 (plus VAT).
However, in some cases, real estate agents, brokers, property developers and others inform potential applicants that it is not the purchase price that is important, but the value of the property.
Thus, in Larnaca , a real estate agent informed a buyer that although the price of the apartment he would buy was 170,000 euros (the agreed price), he could obtain a visa since the price of the apartment was at least 300,000 euros. This is fraudulent because the state will not accept such a claim against the €300,000 limit.
If such promises or assurances “tempt” the client, he will find himself without a visa and, possibly, after paying €170,000, attorney fees and other expenses, wondering what went wrong.
This is a dangerous development that could – along with others – harm this very successful effort to attract foreign investors. Therefore, the government should issue a directive or statement in this regard, clarifying what “value” is and how it relates to the purchase price.
In an attempt to convince unwary applicants that a lower price will mean a lower transfer fee (to the benefit of the buyer), various intermediaries and sellers do not inform them that there will be a higher capital gains tax on resale. Regarding transfer fees, the Land Registry will provide an estimate.
Another interesting example: visa applications for new real estate are answered in about six months, and if it is a sale of secondary real estate (resale), the applicant may wait a year. This puts sellers in a position that may or may not be consistent with the Constitution (where everyone is equal).
Another example of fraud is the fees of lawyers and accountants for the visa process.
For example, a lawyer asked a client in Paralimni for a fee of 7,500 euros for a visa, and when he decided to refuse, he received a letter from a large law firm offering to charge 2,500 euros for the same service.
However, real estate agents, especially foreigners (Chinese), ask for a commission of ±20%. In one case in Larnaca, a seller agreed with a Chinese estate agent to sell his seaside home for €1,800,000, with the estate agent receiving €800,000 by providing a Hong Kong account for the money transfer. Therefore, it is interesting whether the Cyprus authorities will agree to such commission levels. Otherwise, the seller will pay tax on the entire €1.8 million amount, plus the possibility of being charged with money laundering.
Protaras mine to a private individual for €3.0 million , but suggested that they first issue a deed of sale (for a smaller amount) between them, and within six months he would sell it for a much higher amount. In this case, the problems (promissory note pledge, taxes on a higher price) are recognized, but the object cost no more than 2.0 million euros, and the “lure” for the Cypriot seller was great.
Be that as it may, this measure has brought many billions to the Cypriot economy in recent years, which may be at risk due to dishonest behavior and greed for money.
