After decades of chaos on the issue of real estate expropriations for the purpose of carrying out public utility projects, which resulted in the state owing owners about €560 million, we have now reached the point where the debts have been reduced to about €70 million.
It is noteworthy that about half of the amounts due do not concern the value of the properties that were expropriated but the interest paid by the state (and by extension the taxpayers) for the fact that the amounts of the expropriations were not paid immediately or within a reasonable period of time to the beneficiaries, with the result that in some cases the interest leads to a doubling of the amount due.
According to a document submitted before the parliamentary Committee on the Interior, the total outstanding amounts (accepted but unpaid amounts) until 31.12.2022 were €91,681,430. Of these, the debts for the value of the properties amounted to €45,977,866, while the interest reached €45,703,563.
At that time, the owners had been offered a total amount of €71,294,987 (principal €46,244,212 and interest €25,050,775) and the process was pending.
As we are informed, since then the total amount has not changed to a significant extent.
It is also worth noting that in the past the interest was around 9%, something that was exploited by owners (due to the fact that it was considered to call for return, even compared to the rates given by the banks in good times) and so they appealed to the courts with the situation perpetuating at the expense of the public treasury. Currently, the interest paid to property owners who are expropriated is limited to 3%.
All of the above will be a thing of the past as soon as a relevant bill submitted by the Ministry of the Interior is approved and with which all those involved agree.
The bill ("The Compulsory Expropriation-Amending Law of 2024") also implements the following:
-A time frame is set in which the owner (of a property expropriated) can apply to the court for the determination of the compensation and after the expiration of the relevant deadline, the amount is considered agreed.
-The fastest payment or deposit of payment to the Accountant General of the compensations is achieved within a time frame and immediately after the registration of the expropriated properties. With this, the conflict with the owners in matters of compensation payment and the illegal intervention of the AA is avoided, since the process will be completed on time.
-The gap is clarified that in the case of a private agreement, no taxes, fees, etc. are paid.
-The Contracting Authority (A.A.) is given the right to keep the property instead of the public auction (as is the case today), as long as the purpose has been achieved.
-More complete information is provided to the citizen about the affected property, as well as the right to electronic communication.
-It is clarified that A.A. also includes the community councils
-The description of the purpose of expropriation for archaeological purposes is clarified/expanded.
The government estimates that with the timely payment of compensation, the amounts will be channelled into the market and private investment and consumption will increase, which will have positive effects on the Cypriot economy in general. Of these, a part will be returned in the form of direct and indirect taxes to the state.
The government estimates that with the timely payment of compensation, the amounts will be channelled into the market and private investment and consumption will increase, which will have positive effects on the Cypriot economy in general. Of these, a part will be returned in the form of direct and indirect taxes to the state.
