.
By Antonis Loizou FRICS – Antonis Loizou & Associates Ltd – Real Estate & Project Managers
The varying views on the development or not of housing in rural areas in Cyprus and the reaction that followed forced the government to reconsider the to-date non-transparent and rigid rules.
The matter had been poorly handled at the time by then-Interior Minister Eleni Mavrou, as a result of which we had no regulations for the development of rural land, while despite many efforts to get clarifications, neither I nor my associates managed to get a meeting with her or government officials. Furthermore, three letter sent to the Ombudsman’s office got the same result – none!
The new regulations, as published on November 4, are numbered below. Note, however, that these limitations have yet not been clarified and leave a lot of unanswered questions, some even with misleading answers. As a result, prior to committing yourselves to any project or standalone housing in a rural or agricultural-designated area, make sure to visit the local Town Planning office and, if possible, try to get an answer in writing, that could take up to 2-5 months, but this is the only way to be sure.
The question if construction of a home on agricultural land is permitted or not depends mainly on the personal situation of the applicant, whereby the value of the property (with or without a permit) is theoretical and controversial, causing social and economic hardship to the owner.
At present, the following regulations and limitations apply:
• For the land to be developed, it must not more than 500 metres from the nearest residential zone, without clarifying how the 500m is determined.
• The property must have “satisfactory” access, either from a public road which must be at least 4m wide, or from an access road of 12ft width, but with specific length.
• The property must not be within 300m of an animal farm or industrial zone.
• Instead of a 15% ‘green coefficient’, the developer must provide 20% of the property for the creation of a public green space.
• The construction must be at least 10m away from the border of the field/plot, that can vary only under certain exceptions.
• The house must not be more than 240sq.m., including covered areas (balconies, attic, etc.), with the exception of a 30sq.m. space for a basement.
• The house must have either public or private water source, which needs to be inspected by the local Water Development Dept. for quantity and quality.
• The house will be the permanent residence of the applicant and cannot be used primarily as a holiday home, and this subject to the applicant not having any other property or estate within the same development area.
• Properties within the protection zones of Natura, reforestation, arable land and public land cannot be developed.
• If the applicant has any other property within the same development area, or in an adjacent area (whatever this may mean), may probably not be allowed to build the home.
• It is possible to sell the property to a third party but only after ten years have lapsed from the date of securing the permit – each applicant may make use of this permit only once.
• The construction of a home is allowed only for the purpose of housing a family, married couple with or without children, a single-parent family, individual, unmarried person living with his/her parent (and so, the confusion continues…).
• The building of a swimming pool is prohibited.
And so on.
It is obvious that the aim of the Town Planning and the Ministry of Interior is nothing less than abolishing the rights of building individual homes, an idea with which I don’t disagree, in principle. However, as I had argued way back in 2013 when the regulations for these individual housing units first appeared, it would have been correct at the time and it would be understandable if a grace period of two years had been granted to secure a permit and three more years for the construction, and in the case when the house is not completed within these two periods, then the permit would be revoked.
It is therefore understood that the value of a field (the offer price by a prospective buyer) will depend solely on his personal data and conditions alone.
The concept of individual housing in rural areas turned out to be catastrophic to banks, and in particular to the Co-operative, as any property that had some possible development value has now been grossly devalued and returned to the state of an agricultural plot.
After that, these same properties, due to their devaluation, were deemed as unfit for security by the financial institutions. As a result, the demand by the Troika to recapitalise them.
I had suggested at the time that the assessment of the securitisations was underway by Pimco and that the ‘reform’ for these individual housing units should have been introduced after the review and not before it. Once again, the illogical logic of politicians prevailed and this led by far to the recapitalisation by the state of the Co-operatives by a whopping EUR 1.7 bln.
