24 Mar Transfer of building density
Transfer of building density
by George Coucounis
The law allows the sale and transfer of building density from a donor property, which must be a listed building, to a recipient building located in an area declared as such by the Council of Ministers. The owner of the recipient property can use buildable square meters from the donor property in order to cover any excess or need in the construction of the recipient building. The transfer of the whole or part of the disposable building density from a listed property can be made to one or more recipient buildings either simultaneously or at different times.
Transferable building density means the buildable square meters of a listed property which can be transferred to the recipient property. Apart from the transferable building density, the law provides for donated transferable building density which is donated for the purpose of its sale or disposal for financing part of the maintenance cost of the listed property. The relevant application for the sale of buildable square meters is submitted to the Director of the Town Planning and Housing Department where the details of both the listed building and the recipient building must be stated, accompanied with a topographical plan showing the buildings, a copy of the title deeds, a copy of the permits obtained and a copy of the architectural plans of the buildings.
The sale price of the buildable square meters purchased can be agreed between the owners of the respective buildings despite the valuation of each square meter as assessed by the Director of the Lands and Surveys Department. The owner of the recipient building pays the amount of the valuation by depositing it at the Deposits Account of the Town Planning and Housing Department, from which an amount of 10% is deducted as contribution to the Republic in accordance with the law. The remaining amount is paid gradually to the owner of the donor building irrespective of the sale price agreed. Thus, it is up to the parties to regulate the issue regarding the difference between the agreed price and the valuation. Normally, a sale agreement is signed and provides for the difference in excess to be refunded to the owner of the recipient property. If the valuation is lower than the sale price, no refund is payable to the owner of the recipient building. If for any reason the whole or any part of the amount deposited in the Deposits Accounts is not received within a period of 6 years, it becomes the ownership of the Republic unless the Minister of Interior grants an extension if the delay is justified.
The transferable building density is deducted unequivocally from the plot where the donor building is situated and it is added to the plot of the recipient building. Upon payment of the amount as per the official valuation, the Director of the Town Planning and Housing Department notifies the Director of the Lands and Surveys Department so that the transferable meters to be registered in the title deed of the recipient property and be deducted from the title deed of the listed property. The Minister of Interior, who is the competent authority, has certain powers given by the law, including to grant permission for the transfer of building density to a plot
owned by the owner of the listed building which may be situated outside an area declared as a recipient. In the event of an increase of the building density of a listed property, irrespective of whether a transfer has been made, the owner is entitled to transfer the additional building density. It should be noted that in the event of a sale or disposal of building density, there are no taxes, charges or dues payable, including capital gains tax or transfer fees. The law provides for certain incentives not only to the owners of listed properties but also to their tenants.