Worldwide legal news LEGAL NEWS
20 | ROUND UP What’s it about?
This is a regular feature of OPP magazine. Lawyers and accountants around the world have agreed to keep us informed about any new developments in the law in their country that they think are of particular interest to the overseas property industry. If you are aware of any interesting changes to the law in your country of residence or business, contact
john.howell@opp-connect.com. Alternatively, if you know of a good, reliable lawyer who might be prepared to help, please do the same.
The most important of this month’s legal news from our correspondents around the world. More legal news is available in the News section at
www.opp-connect.com
Cyprus to increase VAT rates until 2014
The Cypriot government has announced further VAT rises for the next two years, with plans to increase the rate to 19% by next year. The rate was increased by 1% on January 14th this year, and will rise a further 1% on the January 13th 2014. At the same time, the 8% reduced rate will rise to 9%; the reduced rates
“Cyprus joins many other European countries having to increase taxes as a result of the crisis”
of 5% and 0% will remain unchanged. This comes after a 2% rise in 2012, when the rate went up to 17%. The VAT changes were introduced as part of a bail out by the ‘Troika’ of the European Union, European Central Bank and International Monetary Fund. Cyprus now joins many other European countries having to increase taxes as a result of the economic crisis. [Source:
Vatlive.com]
Homeowners take Spain to EU Court of Human Rights An elderly British couple from Albox, Andalucía have made the decision to take the Spanish state to the European Court of Human Rights, after their home was demolished. This was the result of a dispute between the local council and the regional government, despite the fact that they had a full building licence. The decision to
take the case to the Human Rights Court is backed by AUAN and SOHA - organisations which represent homeowners in similar circumstances in Spain. The case will focus on Article 1 of Protocol Number 1 of the European Convention of Human Rights which guarantees the right to property. According to AUAN, this right “holds little sway in the Spanish judicial system.” This is similar to the case of Len and Helen Prior in 2008, whose case went to the Spanish Constitutional Court. AUAN are fi ghting to ensure that compensation is awarded before any further demolition, which in the Prior’s case, was non-existent. [Source: AUAN]
Dubai to introduce new protection law in early 2013
the public. The draft for the changes was released in June 2012, seeking the opinions of industry experts. The new law means that investors can receive a complete refund if the developer fails to complete or handover the property within the given time frame. The same will occur if the developer deliberately deceives the buyer, or alters any specifi cations without obtaining the permit to do so. Compensation can also be claimed in the case of any breach of warranty, or violations of the contract for sale. A report by Hadef & Partners on the legal state of Dubai’s real estate market found that only 28% of the 8500 respondents were aware of the new law, while 56% were unfamiliar about what it proposed.
[Source:
ReidIn.com]
Cyprus: one-off property tax for 2013 as stop-gap measure The Employers & Industrialists Federation (OEB) and Chamber of Commerce and Industry (KEVE) have proposed a one-off property tax for 2013, for use as a stop-gap measure until the introduction of a new bill. This
“Dubai investors can receive a refund if the developer fails to complete within the given timeframe”
comes after a series of protests towards the previously proposed tax hike in December - this and a number of bills related to bailout were not voted on by parliament. The tax will be €4.60 per thousand, and should be paid on each Title Deed, not as a cumulative sum (i.e. not according to the total value of properties registered to an owner). It is expected to bring in an additional €69 million to the economy, on top of the Immovable Property Tax total. [Source: Cyprus Property News]
Dubai released a new real estate protection law in the fi rst quarter of 2013. According to Majida Ali, Senior Consultant and Director of Planning & Organizational Development at the Dubai Land Department (DLD), this comes after several suggestions from
China announces measures to ensure low-income housing China’s Ministry of Finance recently announced that they were taking several measures to guarantee the construction of low-income housing. The fi nancial departments of local governments have been ordered to reserve funds from a number of areas in order to support
The UAE central bank has announced that it is going to restrict the mortgages available to foreigners to 50% of the property value. There is currently no limit, meaning that overseas buyers can borrow up to 100% mortgages, while UAE citizens are subject to a 70% loan-to-value ratio. But owing to a high foreign population in the region, there is fear that banks may face risks if expats fall behind on loan payments, so banks have called for foreign workers to see similar restrictions. However, Mark Stott, CEO of Select Property believes that the 50% cap won’t have a large impact. “The market for overseas buyers remains small so we don’t necessarily believe these unconfi rmed changes will slow down growth,” he said. On the other hand, he believes that if the changes do happen, there will be a higher demand in the rental market. [Source: The Telegraph]
Italy may alter property tax Italy’s Prime Minister, Mario Monti, has announced that he will alter the property tax imposed by his
www.opp-connect.com | FEBRUARY 2013
January wasn’t particularly quiet in the legal world this year. We’ve seen good and bad news for investors in Cyprus and Dubai, while high earners in France are set to be hit once again. The US has made changes for its neighbours to the north, while Ukraine and Greece have introduced additional taxes. Read on for more...
low-income projects, including the public budget, the Reserved Housing Fund and the government bond. Companies constructing the projects will also be able to receive government subsidies for investments or bank interest, and for some, preferential taxes. For the ministry, these projects are set to be a key emphasis in all tasks in 2013, with plans to start 6-million units of low-income apartments this year. The rise in low-income housing has caused concerns for the market in recent times, owing to the consequential rise in commercial apartments, and due to government-controlled land supply. [Source: Morning Whistle]
UAE to cap borrowing for expats
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