Search

-
-
-
-
-
-
-
With photos
With videos
Search
  
  
Foytina is a registered & licensed real estate agency (Reg.No:628 / Lic.No:332/E)

Property Part-Exchange (Antiparohi)

 

Part–exchange [in Greek = antiparochi]. This refers to cases where a property -normally its land- is “given” to a constructor, who undertakes the construction work on the land and part of the new building to be shall be given to the registered property owner, as a part-exchange against the value of the land he contributed in the whole project.  This agreement does not entail a genuine sale transaction but the tax authorities shall apply their formulas on values as if the land was sold out, based on the governmental estimations/records.

 

For example, if a property is given under such an agreement to be developed, the sales price is calculated based on the land value in analogy. So if you part-exchange your land for eg: 70%  to a constructor and the total land value if it was sold is say €300.000, then the tax authorities will assume a sale of the land at  [€300.000 x 70%] = €210.000 [less the relevant allowances].

 

Hence all the calculations are made as follows:

Sales price:                 70% of the value

Allowances:                70% of all allowances.

 

Normally, in Cyprus property Market, owners of land part exchange it for a percentage that ranges from 20% up until 35%. For better understanding, lets say that the owner is part-exchanging his 10.000 sqm of land with a developer for a percentage deal of 70-30 %. Let's also assume that the building factor of the land is 30%. This denotes that the total built allowed area shall be 3.000 sqm. Once those 3.000 sq meters are built by the developer, the owner of the land shall own 900 sq meters of covered area and the developer shall own the rest 2.100 sq meters. Land shall be subdivided in a way to meet the agreed ratio. 

For value comparison reasons at the effective time, the land would sell for let's say 2.000.000 euros. After the land is part-exchanged, he shall actually own 30% of the land plus 900 sq meters of buildings. This could easily generate the amount of 2.000.000 euros to initial land owner if sold for 2.220 euros per built area.  

 

Each side has to undertake its tax obligations and liabilities though.  

 

The 'Foytina.Com' Team

 

Foytina is a registered & licensed real estate agency (Reg.No:628 / Lic.No:332/E)