Rise in Property Transactions
During May 2017, contracts for the sale of residential and commercial properties and land (building plots and fields) totaled at 756, an increase of 58% compared to the corresponding period of the previous year, according to Land registry Office (June, 2017).
Currently, when any plot of land is sold is not imposed to VAT, however, discussions of a government bill which would impose 19% VAT on land sales for commercial property transactions, raises concerns that would effect negatively the property market as well as banks that hold land as collateral. As a result, several investors ‘rushed’ to buy before tax implementation on commercial sales of land comes into force.
It should be noted that an unknown number of the property sales contracts are related to loan restructuring, recoveries and debt-to-asset (D2A) swaps occurred between financial institutions and defaulting borrowers.
Property sales increased in all districts. Limassol recorded the highest increase with sales up to 106%, Ammochostos rose by 58%, while Pafos, Nicosia and Larnaca increased by 53%, 44% and 16% respectively.
For the period of Jan-May 2017, the number of property sales increased by 17% compared to the corresponding period of 2016.