Since January 1st of 2018, the government of the Republic of Cyprus has ordered the operation of updated of price evaluations of all immovable property within the borders of the Republic of Cyprus, as a reference for the imposition of taxation. The official public authority operating these evaluations is the Department of Lands and Surveys of the Ministry of Interior.
The General Valuation is based on the three internationally recognised evaluation methods, which are the ‘’Comparative Method’’, the ‘’Method of Development’’ and the ‘’Cost Method’’. These methods are used by the European Valuation Standards, the International Valuation Standards, as well as the British RICS Valuation-Professional Standards. The General Method has also been confirmed as liable from the International Monetary Fund (IMF) who conducted a survey on the same named the ‘’Implementation of the General Valuation for Immovable Property Tax’’.
The General Valuation method, is used to calculate the approximate amount of the worth of an immovable property, while the authentic value is the amount of money paid for the property, in case of a consented sale. The General Valuation method may be seen more as a guide for the categorisation of similar properties in groups, according to their size by square meter, their geographic location, as well as their legal and physical characteristics. In other words, this type of valuation is used for taxation purposes only, and does not constitute the sale price of the property.
The process of collection of the valuation characteristics of immovable property usually undertaken following any of the below requests:
Upon the owners’ request for modernisation of his title deeds;
- At the request of the owner for correction of the valuation characteristics of his immovable property;
- Upon request to the competent administrative authorities following the issuance of a construction permit or the modification of the existing one;
- Upon an ex officio request of the Director to proceed into the correction of an error in the valuation characteristics, for large scale and/or specialised developments, or wherever errors or omissions are found.
- The above mentioned collection of valuation characteristics is operated in Cyprus, through inspections and the use of modern technology, such as space images and other types of geographic material. Furthermore, the relevant public authorities have developed an online application which connects all the construction authorities (District Administrations and Municipalities) and all of the information regarding each property is automatically available to all administrations using the platform. Once all of the parameters are saved on the platform, the General Valuation is operated and is visible to any organ that has access to it.
The General Valuation procedure refers to the description of the physical and legal characteristics of the immovable property, emphasising the type, the square meters, the valuation location, the access to it, the shape, the barriers, the slope, how it might be affected from the Beach Protection Zone etc. In case of a real estate building, the valuation includes the type of property, the parameters, the year of construction, the year of renovation, the state, the category (luxury etc), the view, problems such as sedimentation, cracks or humidity etc. Moreover, the valuation per square meter has been adopted.
Due to the modernisation of the valuation methods, with the help of technology, Cyprus has also opted for an automated mass electronic system of valuation, such as the international Computer Assisted Mass Appraisal Systems-CAMAS. The competent Public Officers operated different types of quality control of the valuation operation (quality control – ratio studies), in order to secure as accurate and homogenous results as possible, according to international standards. The price range of the immovable properties is estimated to be as close as possible to the market value.
Please note that this article is for informational purposes only and does not, under any circumstances, constitute legal advice. For further information or a personal consultation, please contact Arsen Theofanidis LLC and one of our legal consultants will be glad to assist you!
Advocate – Legal Consultant
Arsen Theofanidis LLC