Who will pay the Bill? – Passports

Nov 22, 2019

So, here we are dear readers, now we have received the Bill of €1.200.000 for the foreign Cos to carry out the due diligence investigation regarding the passports issue (since we do not seem to do a good job ourselves).

This Bill, should, in our opinion, be covered by the developers/agents/advocates who are the primary beneficiaries of this billion bonanza. We fail to see why, the rest of us who have no direct benefit, should foot the Bill, through the Governmental budget and not the primary beneficiaries.

In our opinion and bearing in mind the maximum ceiling set by the Government for the passport issue to foreigners (700 passports), this comes to approximately (€1.200.000 ÷ 700) = €3.500/ applicant. This amount should be paid at least by the seller (developer or individual sales) since they are the primary beneficiaries. Similarly to the passport charge of €3.500/applicant, we should introduce another charge of €1.000/applicant for the visas – in order to be consistent.

It is a fact that the developers with their insatiable increase of their profits, have caused the E.U.’s reaction on the subject, which has resulted in the increased taxes (see added €150.000 per applicant) the proposed 4‰ tax on transactions etc, which at the end this investment scheme will become a non-competitive one, by comparison to other countries, with a similar investment/passport scheme, causing damage to the whole economy in general.

As the French says “one’s appetite grows as one eats”, we seem that, we, as a country have to foot the bill and as these restrictive measures/taxes are not enough, we have our “unwise” MPs, to insist that we should publish the names etc of those who secure such passports (why not Cypriots property acquisitions as well we say). So at the end we will be out of this market and we will be wondering at the end what went wrong, whereas the non-clear stand of the “Commissioner of the Protection of the personal data” is all the worst.

We remind you of the warning of the ex-Minister (Mr Hasikos) of Interior 2 years ago on this regarding the whole page press and magazine ads on the subject and even the shocking shop window at the ex-Hilton Hotel, as well as even now a Pafian developer, who placed an open invitation to everybody who introduce such clients for passports “who stand to gain a substantial income”.

We wonder in which country in this world, its property market does not comprise of local and foreign buyers. If such a publication measure were to be introduced to e.g. U.K. and Greece with thousands of Cypriot buyers there, who will buy at the end? Is there a logic when our competitors do not adopt such extreme measures, we should be the ones to inflict upon ourselves the damage?

With all these restrictions (some of which are reasonable since we did not do a good job ourselves) and bearing in mind the increasing competition from more attractive countries, such as Greece, Spain etc, it is a matter of time (1-2 years) before the whole Cyprus investment scheme fails and with it the loss of millions of foreign income.

We seem to concentrate our attention to passports and home buying, but based on experience, these Cyprus passports holders extend their interest for large scale investments, especially in the development of hotels and other (see Nicosia hotels, Ayia Napa, Sotira village, Larnaca etc). The influx of this foreign currency has helped numerous debtors to pay off their debts to the delight of our local banks, who would otherwise be in deep trouble (affecting all of us).

We have many projects which are at a standstill such as the pending/licensed 4 golf courses, the marinas and other type of investments not relating to real estate as such, which we must consider the effect on such projects, if the investment scheme fails.

Who will pay then dear readers for the situation that we will have in the near future – We have suggested in a previous article that those developers, who do not handle such a matter with extreme care, should pay a fine of €500.000 per transaction and for which we have received the angry reaction by a number of developers. We took it that we must be on the right path mind you!!

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