THE DEPARTMENT of Lands and Surveys (DLS) was targeted by opposition party deputies and the auditor-general at last Thursday’s meeting of the House watchdog committee, accused of grossly underestimating the value of state land. The case that alerted deputies was the very low valuation of the plot of land located opposite Nicosia’s Landmark Hotel (formerly Cyprus Hilton), which is considered prime real estate.
This was the plot that the Christofias government planned to sell to the Qatari government in 2010 for a super-luxury development. At the time the DLS valued it at €143 million, an extortionate price at which the Qataris balked and abandoned the project. In 2014 the department valued it at €70 million while this year it was valued at €5 million, raising the suspicions of Akel deputies that the government planned to sell it at a cut-rate to one of its own. To ensure against this happening, Akel tabled a bill making any planned sale of the plot subject to parliamentary scrutiny.
Auditor-general Odysseas Michaelides stirred the suspicions of the deputies by claiming there were several examples of pieces of state the value of which was markedly lowered before being exchanged with private properties. The implication of corrupt dealings by Michaelides was obvious. He also expressed doubts about the excuse, given by the head of the DLS, Andreas Socratous, that the department had made a mistake in its valuation of the Qatar plot. Socratous argued that this was an isolated error that could have been made by anyone considering 1.7 million properties had been re-evaluated in 2018.
The 2018 prices, an update of the 2013 re-evaluation of all properties, will now be used to calculate municipal taxes on immovable property. The positive thing is that if similar glaring mistakes have been made in the evaluation of privately owned properties, an individual has the right to appeal, not that anyone would if it is grossly undervalued like the above-mentioned state land. Usually, people appeal against high valuations, but they are at the mercy of the DLS officials who have the power to impose a price, knowing that people will not take the department to court.
This has been standard practice for years, DLS officials refusing to accept the price on a sale contract and often charging a transfer fee based on the price they had decided the property should have been sold at rather than the actual price. This arbitrary practice relies on the wish of people to see a sale go through, because the alternative is to challenge the valuation in the courts and wait six years for a decision. Nobody bothered, especially now that the transfer tax has been halved.
Perhaps it may be an idea for the auditor-general to investigate whether DLS officials have exercised this discretionary power to decide the sale price in the case of state land being sold to individuals. Had they ever charged a transfer fee that did not reflect the alleged cut-price at which the state sold land to individuals?