APRIL 2013 |www.opp-connect.com


been met. This Supreme Court decision just happened after the European Court of Justice has ruled that the Spanish legal system in matters of evictions is contrary to European standards. [Reported by Cesar Garzon, Spanish Lawyer – Email: c.garzon@ spanishlawconsultants.com]


India lowers interest rate to 7.5% India’s central bank reduced its lending rate from 7.75% to 7.5% in mid- March, in an attempt to revive stalled growth. The Reserve Bank of India cited the weakest economic growth in 15 quarters, making its second rate cut in three months. The government estimated that the economy grew 4.5% in the last quarter of 2012, down signifi cantly from the 10% growth rates earlier this decade. However, high prices (largely for food) are still


“Spanish Supreme court declares the nullity of mortgages setting a minimum interest rate”


a concern, and could limit the bank’s scope to reduce the rate further. The two fi gures mean the bank is balancing confl icting goals of keeping price increases under control while lowering interest rates to encourage consumer spending and business investment. The reverse repurchase rate was also reduced by 0.25%.


[Source: CNN Money; State Journal]


Cyprus cancels Immovable Property Tax increase The Cypriot Government has announced that plans which aimed to raise €180m by increasing Immovable Property Tax have been scrapped. The previous government had intended to pass its bill through parliament before the recess for the presidential elections but the majority of MPs voted to postpone the discussion. The bill exempted properties of up to €40,000 (1980 values) from paying the tax, and provided that properties worth €40,000 - €120,000 would be taxed at a rate of €4.00/thousand on the full amount. The rate would then increase on properties of a higher value – at the highest rate properties over €1million would be taxed at €20.00/ thousand. New legislation is now being discussed in collaboration with the Finance Ministry. [Source: Cyprus Property News]


French super tax to be limited to 66.66%


The French State Council is to suggest that the future super tax for high- income earners be limited to 66.66%. The Council’s fi nance section believes that if the tax is higher, it could be


LEGAL NEWS


deemed confi scatory and therefore rejected by the Constitutional Court. They have also stated that all income should be considered when calculating the tax, not just revenue from personal activity, which was in the Government’s previous plans. They also suggest that it should apply per household, rather than per individual. The new tax comes after the Court disallowed the planned 75% tax in December 2012, on the basis that the Government had not considered the ability to pay. The fi nance section’s recommendations are to be approved by the State Council shortly, before being submitted to the Government. [Source: tax-news.com]


Australia: CGT tax rate altered and discount scrapped for expats From July 1st, the Capital Gains Tax (CGT) rate for non-residents of Australia will be adjusted. The fi rst two marginal rates will merge into one, aligning with the second marginal rate of residents, to 32.5%. This will increase to 33% from July 1st 2015. The rate will apply to those with an income of AUD$18,201-80,000. From May 8th, Australian non-residents will no longer receive a discount on CGT. Currently, they are only required to pay 50% of the tax of gains earned on taxable Australian property. The concession will still exist for Australian residents. The cancellation applies to property that is owned for one year or more; the discount can still be used on any capital gain built up before May 8th 2012, providing a valuation of the property at the time can be provided. [Source: www.emirates247.com]


Ireland’s Revenue Commissioners target property tax evaders


the online valuation guide on the website (revenue.ie). People who do not respond before the end of June will face stiff penalties. Chairwoman Josephine Feehily said she would be disappointed if Revenue did not achieve a compliance level of “several percentage points north of 80 per cent” by the end of the year. [Source: Irish Times; Irish Examiner]


Canada: real estate lawyers must now sign declaration


The Law Society of Upper Canada’s Convocation has approved a declaration which lawyers who act in real estate transactions must sign at the end of every year. The document is a list of fraud-proof practices which lawyers are expected to know and exercise. This is to confi rm that they know how to avoid becoming a victim of mortgage and real estate fraud. The


“Irish Revenue Commissioners cracking down hard on property tax evaders”


move is another attempt at curbing the high number of fraud claims seen by the society; lawyers involved in such cases have said they were not aware of some of their responsibilities. They will have to agree not to allow staff to use a lawyer’s Teranet diskette and to keep its password private. They will also confi rm that they are aware of their duty to supervise all non-lawyers who worked for them, and aware of their prohibition to act for both borrowers and lenders in the transfer of title to property.


[Source: canadianlawyermag.com]


The Revenue Commissioners in Ireland are cracking down on property tax evaders, warning that they will deduct the tax from the salary, pension or bank accounts of those who do not co-operate. The package sent to most property owners will include a personalised letter, a tax return form and an offi cial guide to the new tax; they will also set out an estimate for the tax due on the property. Homeowners can provide an alternative valuation if they judge the Revenue’s one to be too high – they will need to consult


Vietnam’s housing laws to face huge alterations In Vietnam, the Law on Housing and the Law on Real Estate Business will soon see vast changes. The current laws have posed several problems, including hindering the development of social housing and real estate management and the requirement of state intervention for sustainable development. The ministry has asked localities, ministries, organisations and experts to suggest potential amendments to these laws.


Current draft amendments to the


Law on Housing involve fi nancing, management and use of apartment buildings and housing information systems. The revised laws will be proposed to the Government in June and to the National Assembly in October, and an approval is expected in 2014. [Source: Vietnam Net]


taking action on infrastructure (housing, offi ces, schools, prisons, hospitals) and extensive fuelling of small and medium enterprises in order to make physical infrastructure more effi cient. The action points are a wide structural analysis and reorganisation of assets and an offer of funding incentives to render assets liquid and fi nanceable through various sources of funds. By using the two macro-structures of funds and REIT/SIIQs, domestic and international capital would be encouraged to get the market moving again. [Source: Property Investor Europe]


China reintroduces 20% Capital Gains Tax At the start of March, the Chinese government announced the reintroduction of 20% Capital Gains Tax on mainland property sales – 20 times higher than the current 1-2% rate. The tax rate was previously announced in 1994, but never strictly enforced. Now, the State Council have issued guidelines instructing local governments to strictly follow the rate. So far, the authorities have announced no timetable for the introduction of the tax. Minister of Housing and Urban-Rural Development, Jiang Weixin, said “China must resolutely carry out the recently unveiled 20% capital gains tax on home sales. The ministry has noticed the public controversy over the new tax. We will improve the policy if problems occur when the policy is implemented.” The news has already affected home sales; in the fi rst few days after the announcement, real estate exchange centres were packed with property sellers and agents. [Source: OPP Connect]


The siuation in Cyprusand its implications are changing daily. Keep an eye on OPP Connect for regular updates and take a look at next month’s OPP for a more developed and up-to-date comment.


More legal news is available in the News area at www.opp-connect.com.


ROUND UP | 21


Italian property association calls for modernisation and regulation changes Assoimmobiliare – Italy’s senior property association - has issued a call to prioritise modernisation of real estate in the country. CEO of Beni Stabili, Aldo Mazzocco, said that renewal is increasingly the key component in Italy’s real estate and construction industry. The priorities mean


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