A COUPLE of weeks ago, a Sunday Mail letter writer complained about having been forced to pay a transfer fee that was not based on the price he had paid for a piece of property.
The transfer fee was based on a value for the property arbitrarily decided by the District Lands Office (DLO). Whereas he had paid €130,000 for the property, the transfer fee he had to pay thereafter was for a property valued at €250,000, because this was what the DLO had decided he should have paid.
The buyer ended up paying €6,500 more on transfer fees than he should have done because some public official decided that the property was worth more than he had agreed to pay.
It would be interesting to know whether the official had based his evaluation on 2007 property prices or current rates which are significantly lower in Paphos. Perhaps the official was not aware that property prices in Paphos had nosedived in the last couple of years and that there are people who are prepared to sell cheap in order to cut their losses.
This arbitrary power was given to Lands Office officials because of the very Cypriot practice of paying part of the price for a property under the table. Both buyer and seller benefited from this illegal arrangement as fewer taxes and transfer fees had to be paid.
To prevent this from happening, officials were give the discretionary power to decide the ‘real value’ of the property and base transfer fees on that.
Needless to say, this power created a ripe opportunity for corruption, since an official could also be given some money under the table to keep his evaluation low.
As usual, the people penalised have been the honest, law-abiding citizens who’ve done things by the book. Even after managing to secure a property at a good price they have had to pay a higher transfer fee because the official in question decided they should have paid more.
Is there any protection from the arbitrary valuations of officials? A buyer can appeal against the valuation after which the DLO would undertake an onsite valuation, with the possibility of putting an even higher price on the property.
But how objective and impartial could an employee of the Lands Office be? It is just like the joke of the Tax Council, which is supposed to examine appeals against Inland Revenue Department decisions – the appeals are actually examined by employees of the Department seconded to the Council.
State services cannot be allowed to exercise power without any controls. An independent agency should be set up to arbitrate in disputes over property values, because at present the people who make decisions are neither fair nor impartial.
