Contract Law in Cyprus is one of the main areas of law as it has the most serious impact in our daily life. The heart of our practice is relating to contracts. We advise and provide drafts to our clients on a broad range of commercial and other agreements.
Under common law and as codified by the Cyprus Contracts Law, Chapter 149, Contract Law can be defined as the set of rules governing the relationship, the content and validity of an agreement between two or more persons, individuals or legal entities, as regards the sale of goods or the provision of services or the exchange of interests or ownership.
Cyprus is at the forefront of implementing a reduced 5% VAT rate for the initial 130 sq.m. of primary residences, with the plan set to take effect from November 1, 2023 applies to properties for which their building permits have been issued after the 1st of November 2023 under pressure from the European Union Court.
The Parliamentary Committee unanimously decided to increase the maximum limit from 110 sq.m. to 130 sq.m., aligning with market trends and meeting European Directive standards. The aim of this move is to make primary residences more financially accessible.
Definition and Purpose
The new Urban Amnesty Plan aims to enable citizens to legalize arbitrary constructions in approved developments, which concern regulatory deviations and which do not substantially affect – minor planning violations – the entire project, in order to obtain Certificates of Approval and issuance of clean Property Titles.
It is understood that urban planning / regulatory irregularities may concern an excess of the building ratio (20%-40% depending on the case)
It is understood that examples of “minor planning violations” are, inter alia, the fencing of open spaces, the conversion of terraces or the construction of pergolas and barbecue areas.
Duration
The plan will take effect on Monday, September 23, 2024 and remain in place for six months, ending on March 23, 2025. Eligible property owners can apply to legalize these minor violations by applying and paying a monetary compensation fee in order to obtain final approval and issue title deeds.
Terms and Conditions
This scheme will be implemented provided that certain terms and conditions are met.
Specifically:
(a) The building must be approved and
i. obtain planning and/or building permission before 13 September 2024
ii. the arbitrary additions were implemented before September 13, 2024. An affidavit confirming the date of completion must be submitted with the application by the competent designer.
(B) Every addition and conversion should not constitute an absurd and unrealistic acquisition. This means that additions and changes should
i. be in harmony with the morphology and architecture of the building and
ii. be implemented with materials of high aesthetics and quality, without adversely affecting the environment, or causing any negative impact on the amenities and/or property rights of third parties.
(C) In cases where the building ratio is exceeded, a condition will be set in the planning permit for the payment of compensation for a certain percentage of the value of the excess and this amount will be paid before the granting of the planning permit.
This compensation is calculated on the basis of the current market value as determined by the Department of Lands and Surveys.
It is understood that the same will apply in cases of deviation from regulatory provision.
D) If additional parking spaces are required but cannot be accommodated within the development property, the Planning Authority will facilitate their purchase, even in areas where there are no ministerial decrees for the purchase of parking spaces.
Application procedure
As of September 23, 2024, property owners can submit planning applications through the computerized system HIPPODAMOS to the five competent Planning Authorities (District Authorities of Nicosia, Limassol, Larnaka, Paphos and Famagusta – EDA), in the new option marked “URBAN AMNESTY 2024-2025”
The application process includes:
1. Submission of an official application form together with a copy of the building permit (permit, terms, approved plans), with colored marking of arbitrary additions/alterations to the submitted plans
2. Submission of the form “Solemn Declaration of the Designer for the Date of Implementation of Arbitrary Constructions”
3. Payment of the required compensation fee.
Development Categories/ Implementation
A. ADDITIONS TO EXISTING APPROVED DEPLOYMENTS
1. Residential Development
2. Industrial/Craft/Storage Development
3. Livestock Development
4. Agricultural Warehouse
5. Commercial / Office Development (in approved stores)
6. Recreation/Entertainment Development
DEVELOPMENT CATEGORIES OVERRUN RATE
Increase of Building Ratio within the shell in Residential Development 20%
Increase of Building Ratio outside the shell in Residential Development 25%
Increase of Building Coefficient in Residential Development with the creation of a new residence 30%
Increase of Building Ratio in Industrial / Craft Development 40%
Increase of Building Ratio in Livestock Development 20%
Increase of Building Ratio in an Agricultural Warehouse 10%
Increase of Building Ratio in Development / Entertainment 30%
B. CHANGE OF USE OF PART OF A RESIDENTIAL UNIT TO A BUSINESS PREMISES
• Change of use for conversion of part of a residence into business premises, only for cases of limited area, of the order of 60 sq.m., if the conversion has been implemented for the activity of the owner or his family members.
• Exclusively for service professions, such as doctor’s office, office, small one-room tutorial, Category C laboratory
• Without applying the provision to reduce the current building ratio to 70%
• The first additional parking space will not be required
• It also applies in cases where, according to the provisions of the Development Plan, it is not possible to locate such a development (e.g. in a Residential Zone it must be adjacent to a main road), provided that there are no negative effects on the amenities of the residents or road safety problems
• It also applies in cases of residential units in apartment buildings only if the proposed development is permitted under the Development Plan, and provided that the signatures of all co-owners are secured
C. DEVIATION FROM REGULATORY PROVISIONS
• Regulatory Deviations – during the construction of the building, without being provided for in the approved plans, or at a later stage, extensions or constructions were arbitrarily implemented that do not comply with the Orders of the Minister of Interior or the provisions of the Development Plans
• The deviations concern distances of buildings from the boundaries of the plot, distances between main and auxiliary building, exceeding coverage rate, length of contact of auxiliary buildings on common borders, maximum allowed height and / or number of floors of main and auxiliary buildings, etc.
• The exercise of the discretion of the Planning Authority is required
• The agreement of the Local Authority is not required
• A prerequisite is that the arbitrarily implemented extensions do not alter the architecture of the building, nor affect the amenities of the residents and the environment and the physiognomy of the area
• Two categories of regulatory divergence:
(a) Limited in scale, and
(b) More substantial deviations.
• A specific amount/compensation is determined for each category of deviation, depending on its scale and importance, as well as the administrative area in which the property falls (Local Plan/Area Plan or Rural Policy Statement), using the COMPENSATION TABLE
Questions from the public and designers, as well as from the Urban Planning Authorities that will implement the Plan (District Local Government Organizations – EDA) will be sent to the email address of the Department of Town Planning and Housing centraltph@tph.moi.gov.cy and will be answered within 3 working days.