Cyprus Mail
Property

Determination of a property’s market value

property

THE market value of a sold immovable property is determined by the Director of Lands and Surveys on the basis of the date that its sale was agreed. Nevertheless, it happens that the market value of the property is higher than the value stated in the transfer declaration or the purchase price referred to in the sale contract.

People engaging in transactions regarding immovable property are aware of this power of the Director of Lands and Surveys to determine the market value of the property according to the relevant legislative provisions and they usually accept his valuation without filing an objection. The legislature was right in granting this power to the Director of Lands and Surveys since its exercise safeguards the validity and stability of land transactions, avoiding at the same time the possibility of deception through false declarations as to the true value of the immovable property in issue.

Despite the above, the power of the director is not absolute since the purchaser called upon to pay the transfer fees for the sale of the immovable property has the right to file an objection, request an on-the-spot examination of the property and present a valuation report from his own private property valuer. The transfer of the property is not affected by the filing of an objection and it is perfected upon payment of the fees for title registration on the basis of the preliminary value determined by the Land Registry until determination of the property’s market value through valuation.

The fees for the registration of title are calculated on the basis of the purchase price, and specifically the exact category within which the purchase price falls. When the director is not satisfied that the purchase price declared represents the property’s market value on the date of filing the transfer declaration or at the date of signing the sale contract, he may exercise his discretion and impose a fee which is calculated on the basis of its market value.

In such an event, the registration of the immovable property in the name of the purchaser is perfected upon payment of the fee, with full reservation of the purchaser’s rights to file an objection in writing within 45 days, supported by a valuation report compiled by his/her own private valuer, as well as any other related information or documents regarding the value of the immovable property. The director makes a valuation of the immovable property within three months from the date of the transfer declaration, taking into consideration all the available documents and informs the purchaser of the outcome, as well as the payable fee.

The purchaser has the right to challenge the fee imposed by filing an appeal. In the event there is a difference between the initial fee imposed by the director and the fee which needs to be paid according to either the final valuation of the director or the judgment of a competent court the director returns the extra fee back to the purchaser or collects the outstanding balance.

The aforesaid power of the director has been the subject of examination by the Supreme Court in a number of cases, where it was held that his power to impose and request the payment of transfer fees calculated on the basis of a value which is higher than the purchase price declared is legitimate and it is based on the law. The decision of the director is deemed justified if it is based on the study of the facts and information presented before him, as well as the valuation of the Land Registry’s valuer who has the technical competence, the special knowledge and judgment to make valuations of immovable property by reason of his position as the competent valuation officer of the Land Registry.

George Coucounis is a lawyer specialising in the Immovable Property Law, based in Larnaca, Tel: 24 818288, [email protected], www.coucounislaw.com


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