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Cyprus

MPs extend freeze on foreclosures

Foreclosures

Despite warnings from the government and the banking industry not to, lawmakers on Thursday passed a law further extending a freeze on home foreclosures.

This will draw out the current moratorium on repossessions from July 31 – when it was set to expire – to October 31.

The amendment passed with 27 votes in favour, 15 against, and nine abstentions.

Earlier in the week, both the government and the banks advised against extending the moratorium because of the moral hazard – given that foreclosures serve as a tool and an incentive encouraging delinquent debtors to restructure their loans.

Nevertheless, MPs did heed the advice to tweak the exemptions from foreclosures so as to make them more targeted. With the latest amendment, the prohibition on repossessions now concerns primary residences valued at up to €350,000, business premises with annual turnover of up to €750,000, and agricultural land plots valued at up to €100,000.

Previously, the properties exempt from foreclosures concerned primary residences valued at no more than €500,000, business premises (small enterprises employing less than 10 people and with a turnover not exceeding €2 million), and agricultural land plots with a value up to €250,000.

In other business on Thursday, the House plenum approved €20 million in government relief to assist people whose properties and land were damaged in the recent massive fires sweeping across parts of the Larnaca and Limassol districts.

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