Property Value Defined by the Land Registry

Property value in Cyprus is defined by the Land Registry

George Coucounis explains how the Director of the Land Registry in Cyprus defines the market value of an immovable property at the date of its sale.

The market value of an immovable property for sale in Cyprus is defined by the Director of the Land Registry at the date when the sale is made. However, in some cases, it is higher than the amount agreed in the sale contract or declared in the relevant declaration by the parties concerned.

The public dealing with immovable property transactions through the Land Registry is aware of the Director’s aforesaid authority, which is provided by the law and usually accepts his evaluation without any doubt or objection. The legislator has correctly provided the Director with the abovementioned authority in order to ensure validity and stability when it comes to immovable property transactions and therefore to avoid any deception of the Government with regard to the exact selling price of an immovable property. However, the Director’s authority is not absolute since the purchaser who is the one to pay the transfer fees, may object and is entitled to ask the Director for an on-the-spot local inspection of the purchased property so that to prepare and present an evaluation report.

Despite any such objection, the transfer of the property is not affected and it takes place if the purchaser proceeds to pay the transfer fees based on the price temporarily estimated by the Land Registry, until the evaluation of the property is made.

Paragraph 3(b) (iv) (v) of the schedule of the Department of Lands and Surveys (Fees and Charges) Law, Cap. 219, as amended, provide that the registration of the title deed of a property sold is based on its price according to the scales included in the Law, Cap.17. In this respect, it is stated that if the Director is not satisfied with the purchase price declared as being the market value of the property on the date when the sale was made, then he is entitled to impose and collect higher transfer fees based on the scales included in Cap. 17. In such a case, the registration of an immovable property in the name of the purchaser takes place without waiting for the Director to evaluate the price of the property and transfer fees are collected according to the price declared plus an additional amount the Director may consider necessary to cover up any possible difference in the market value of the property when it is assessed.

The Law further provides that the evaluation of the property must be made and completed by the Director within 3 months from the date of the transfer of the property. The evaluation report of the property must be notified to the purchaser who has the right, if he is not satisfied, to file an appeal before the Court in accordance with the provisions of article 80 of the Law, Cap. 224.

The aforesaid authority of the Director was examined by the Supreme Court of Cyprus in numerous cases where it was decided that the Director’s authority to claim registration fees calculated on a higher price than the one declared as selling price, was based on the Law, Cap. 219. According to the provisions of the said Law, the Director can impose transfer fees based on the market value of the property, if he is not satisfied with the purchase price declared.

The Director, in the case of an objection by the purchaser, must proceed with evaluating the market value of the property, at the date it was purchased and notify the purchaser accordingly.

The purchaser, if he disagrees with the evaluation, has the right to appeal before the Court against the decision of the Director. Therefore, when the purchaser makes an objection and a local enquiry takes place for evaluation purposes, and after it is completed there is still a difference between the evaluation and the temporary estimate made during the transfer, either the extra transfer fees are returned to the purchaser or if there are additional transfer fees payable they are claimed to be paid.

The decision of the Director is considered justified if based on all materials before him and on the evaluation report made by the valuer-expert of his department who has the qualifications and expertise to make evaluations on immovable properties.