Presentation is loading. Please wait.

Presentation is loading. Please wait.

Conference and Plenary Meeting of the PCC in Cyprus The need for an up to date Valuation of Properties in Cyprus Speaker: Kyriakos Tsolakis Limassol District.

Similar presentations


Presentation on theme: "Conference and Plenary Meeting of the PCC in Cyprus The need for an up to date Valuation of Properties in Cyprus Speaker: Kyriakos Tsolakis Limassol District."— Presentation transcript:

1 Conference and Plenary Meeting of the PCC in Cyprus The need for an up to date Valuation of Properties in Cyprus Speaker: Kyriakos Tsolakis Limassol District Lands Officer and Coordinator of Valuation and Management of State Land Branches 29/11/20121

2 Conference and Plenary Meeting of the PCC in Cyprus TABLE OF CONTENTS 29/11/ Introduction 2.Purpose of General Valuation 3.Historical background 4.Major Provisions of General Valuation Law 5.The CAMAS in the Valuation Section 6.The Proposed Project 7.Current issues and externalities 8.Benefits to the Society

3 Conference and Plenary Meeting of the PCC in Cyprus 1. Introduction 3 Area:9,252 KM 2 Population: 877,800 29/11/2012

4 Conference and Plenary Meeting of the PCC in Cyprus Introduction (cont.) 4 MILESTONES OF THE CYPRUS REPUBLIC 1960 – Independent State 1974 – Invasion and occupation of 36% of the territory of Cyprus by Turkey of Cyprus by Turkey 29/11/2012

5 Conference and Plenary Meeting of the PCC in Cyprus Introduction (cont.) Member of the European Union Accession to EURO Currency 29/11/2012

6 Conference and Plenary Meeting of the PCC in Cyprus 2. Purpose of General Valuation 6 THE BASIS FOR ALL PROPERTY TAXES IN CYPRUS  Immovable Property Tax  Municipal Tax  Communal Tax  Sewage Tax  Capital Gains Tax  Grants and Benefits 29/11/2012

7 Conference and Plenary Meeting of the PCC in Cyprus 3. Historical Background 7 1 st General Valuation Initiated in 1909 after the introduction of the Immovable Property Tax Law No. 12/1907 The Law provided the General Surveys, Registration and Valuation in 20 yrs time Completed in 1929 with a Special Law No. 227/1926) 29/11/2012

8 Conference and Plenary Meeting of the PCC in Cyprus Historical Background (cont.) 8 2 nd General Valuation – Based on Implemented and based on the Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224, Order issued by the Council of Ministers- P.I.N 2/1982 Completed in 12 years 29/11/2012

9 Conference and Plenary Meeting of the PCC in Cyprus 4. Major Provisions of General Valuation Law 9 Immovable Property Law {S.2 (1)}  land  Buildings and other erections  Water rights  Undivided shares  Privileges  Liberties  Easements  Rights restricting the use 29/11/2012

10 Conference and Plenary Meeting of the PCC in Cyprus Major Provisions of General Valuation (G.V) Law (cont.) 10 Part VII – General Valuation, Cap. 224 Section 66 – Valuation of Imm. Property Valuation can be conducted when decided by the Director or when requested by the registered owner Determine provisional value for taxes and fees purposes. The Director has the right to revise the value The valuer shall comply with the values situated in the same, neighboring or similar area 29/11/2012

11 Conference and Plenary Meeting of the PCC in Cyprus Major Provisions of (G.V) Law (cont.) 11 Section 67 - Revaluation After 5 years from the 1 st Valuation, it can be conducted a)When decided by the Director or through an application of the registered owner b)Revaluation can be conducted in less than 5 yrs if :  There is substantial reconstruction  Erection of Building  Demolition of Building that affects substantially the value of the property new G.V is Ordered under Section 69 c)or a new G.V is Ordered under Section 69 29/11/2012

12 Conference and Plenary Meeting of the PCC in Cyprus Major Provisions of (G.V) Law (cont.) 12 Section 68 - Valuers (1)Valuation or Revaluation – conducted by valuers who are appointed by the Council of Ministers (2) Shall take an Oath in Court Section 69 - G.V of Imm. Property (1) The Council of Ministers may Order a G.V for the purpose of securing  up –to –date  Uniform Valuations 29/11/2012

13 Conference and Plenary Meeting of the PCC in Cyprus 13 Section 72 – Undivided Shares a)Value is based on the whole share b)Property can be valued through an application of any one or more co owners c) Objections by one or more co owners d) The Director’s decision or the Court is decision for any co owner, is applicable for the whole share Major Provisions of (G.V) Law (cont.) 29/11/2012

14 Conference and Plenary Meeting of the PCC in Cyprus Major Provisions of (G.V) Law (cont.) 14 – Section 73 – Valuation/Revaluation is valid until it is changed – Section 74 – Written objection to the value of any property against the Director’s decision, indicates a fee of €17. 29/11/2012

15 Conference and Plenary Meeting of the PCC in Cyprus The CAMAS in the Valuation Section 15 (i) Computer Integrated Land Information System 29/11/2012

16 Conference and Plenary Meeting of the PCC in Cyprus 16 The CAMAS in the Valuation Section Valuation Models  Direct Comparison Method  Direct Rental comparison Method and Income capitalization  Land Models (residential, Commercial, Industrial, undeveloped land, agricultural land)  Unit Models (residential, tourist establishments, schools, hospitals/clinics, livestock)  Base Cost Models ( commercial, industrial) 29/11/2012

17 Conference and Plenary Meeting of the PCC in Cyprus 6. The Proposed G.V. Project 17 Medium Term Plan (2 - 4 years) I. Property field data capture II. Data input into CAMAS III. Continues updating of data IV. Mass Appraisal of properties V. Notification to the taxpayers and right of objection through the DLS website VI. Interchange of data with all relevant central and local authorities 29/11/2012

18 Conference and Plenary Meeting of the PCC in Cyprus The Proposed G.V. Project (cont.) 18 Existing statistical data for data capture  Approx registrations, or subproperties  Approx residential units, commercial and tourist establishments units  Existing human resource is inadequate to implement this project 29/11/2012

19 Conference and Plenary Meeting of the PCC in Cyprus The Proposed G.V. Project (cont.) 19 Data Capture Strategy Methodologies: From internal and external sources of information of the Department and 3D aerial photography Data capture of vacant land ( ) Data capture of buildings ( ) The data capture of properties can be divided into two subprojects 29/11/2012

20 Conference and Plenary Meeting of the PCC in Cyprus Field Data Capture using latest technologies 20 The Proposed G.V. Project (cont.) 29/11/2012

21 Conference and Plenary Meeting of the PCC in Cyprus 21 The Proposed G.V. Project (cont.) Required Resources for Data Capture  Temporary staff (400 persons), Cost € 12m  Permanent staff for maintaining new buildings (40 persons), Annual cost €  Ancillary Costs: Rents, equipment, peripherals etc. € 2m Required Resources for General Valuation  Permanent staff (60 persons), Cost € 8m  Ancillary Costs: Rents, equipment, peripherals etc. € 2m Time Horizon Data Capture: 2 YrsGeneral Valuation: 2 Yrs 29/11/2012

22 Conference and Plenary Meeting of the PCC in Cyprus The Proposed G.V. Project (cont.) 22 Cost/Benefit Analysis  Income versus Costs: Net Present Value €30m after the completion of the new General Valuation in 4 yrs time  Payback period of loan 4yrs 29/11/2012

23 Conference and Plenary Meeting of the PCC in Cyprus The Proposed G.V. Project (cont.) 23 The project of General Valuation requires effective and efficient management of resources to be successful The project of General Valuation requires effective and efficient management of resources to be successful  Planning  Organizing  Leading  Staffing  Controlling 29/11/2012

24 Conference and Plenary Meeting of the PCC in Cyprus 7. Current Issues and Externalities 24  The existing basis of property taxation on prices is out of date (32 yrs old)  It produces injustice between the citizens  The current system is outdated compared with modern best practices of advanced economies  Inefficient and ineffective to support new kind of taxes (e.g Development land tax, Environmental tax, Wealth tax, Grants and benefits)  Incapable of supporting decision making in central and local government finance and tax policy matters 29/11/2012

25 Conference and Plenary Meeting of the PCC in Cyprus Current Issues and Externalities (cont.) 25  Incapable of supporting effective Land Policy and promoting transparency and efficiency in the Property Market Tax Rates The tables below, display how property tax on prices has changed to increase revenue: Scale of Property Tax on prices Tax Rate €1– € ‰ € € ,5‰ € – € ,5‰ € και άνω4‰4‰ Historical Scale of Property Tax on prices Tax Rate €1– € ‰ € – € ‰4‰ € – € ‰ € – € ‰ € – € ‰ € =<8‰8‰ Expected Revenue27,7 m Existing (as at ) Scale of Property Tax on prices Tax Rate €1– € ‰ € € ‰3‰ € – € ‰4‰ € € ‰9‰ € € ‰ € € % € =<12% Expected Revenue56,7 Proposal 29/11/2012

26 Conference and Plenary Meeting of the PCC in Cyprus 8. Benefits to the Society Budget Effects  Increase revenue at Central and Local Level 2.Market Effects  Improve information and minimise inefficiencies of the Property Market  Secure transparent and efficient investment property markets  Administrative tool in monitoring trends of the property market, exposure to mortgage risks and overheated markets 29/11/2012

27 Conference and Plenary Meeting of the PCC in Cyprus Benefits to the Society (cont.) 27 3.Fiscal Policies  Assist government in planning and implementing fiscal policies  Assist government in implementing Property Indices and Performance Measurements  Assist in promoting new and effective Tax Policies. 4. Fairness and Equity  Secure Uniform Tone of the Valuations and achieve just and fair Property Tax for each citizen 29/11/2012

28 Conference and Plenary Meeting of the PCC in Cyprus Benefits to the Society (cont.) 28 5.Administrative Effects  Administration cost of property tax system can be minimized  The Property tax system can be simplified and made more flexible to meet the needs of the changing environment  Achieving certainty of property tax payments by the taxpayers 29/11/2012

29 Conference and Plenary Meeting of the PCC in Cyprus Thank you for Your Attention 2929/11/2012


Download ppt "Conference and Plenary Meeting of the PCC in Cyprus The need for an up to date Valuation of Properties in Cyprus Speaker: Kyriakos Tsolakis Limassol District."

Similar presentations


Ads by Google