Christos Karolides: Lands and Surveys & Tax Services Officer
If you have not yet had to knock on the door of the Lands and Surveys Department or the Tax Department, perhaps the term “Procurator” has never featured in your vocabulary. If, on the other hand, you found yourself in a property transfer transaction through a donation/sale/exchange, the likelihood that your paths have crossed is huge.
Christos Karolides, as a Procurator or better yet, a Lands and Surveys and Tax Services Officer, is the person who undertakes to carry out some – not so pleasant for many – procedures, such as cases of distribution of real estate, issuance of titles, granting of rights of way, division of land parcels, as well as the completion/submission of all the necessary documents for the execution of a sale.
In the following interview, he explains how and why he can be much more useful to you than you might have imagined.
Interview: Nicola Karatzia
Translation: Stephie Karagiorge
Mr. Karolides, searching online for the term “Procurator”, I found that it concerns a legal practitioner who, without having the status of a lawyer, would undertake to provide legal advice to someone. Is this applicable in this day and age? What is written on your business card?
To be honest, I haven’t looked much into the title. However, I personally believe that the term “procurator” refers to people who offer services relating to Lands and Surveys. In my case, as well as that of some other colleagues that I know of, our responsibilities are not limited to this part, since in cases of sale of real estate we also offer Tax Services.
This is precisely why my business card states that I offer services relating to Lands and Surveys, as well as to Tax.
So please explain to us exactly what the services that you provide include.
Essentially, I undertake everything that has to do with the Lands and Surveys Department, such as property transfers through donation/sale/exchange, submission and completion of applications, distributions, issuance of title deeds, inheritances, certificates of survey, topographic plans, rights of way, divisions of land parcels, as well as the processing of all necessary documents for the execution of a sale.
I think that there could be some confusion in relation to the difference in the services provided by a lawyer and by a “procurator” in transactions involving the purchase/sale/transfer of real estate. Where does the role of each begin and end, and to what extent is the cooperation of both necessary for the proper completion of a transaction?
First of all, I think that this confusion does indeed exist. In reality, however, a lawyer usually prepares the sales document, while the rest of the transaction can usually be carried out by someone like me. Clients often turn to a lawyer because they feel safer in terms of securing their legal rights through the preparation and signing of a formal document.
Personally, I have several lawyer clients with whom it is possible to cooperate for the implementation and completion of a case. And I, of course, may sometimes refer clients to a lawyer. This happens in cases where clients wish to secure their rights with some specific terms which will be included in a legal document. Here, it is worth noting that for the sale of a property it is not always necessary to conclude a sales document, as for example, when there is a separate title deed, which will be transferred directly to the Department of Lands and Surveys.
Does a property transfer transaction always have the same requirements and procedure that is followed? What exactly are the “steps” that you take from beginning to completion?
Yes, the steps to be followed are basically the same, but each case may have its own peculiarities accordingly. We are talking, of course, about a sale.
Basically, in short, the steps that should be followed are:
To examine the seller and the property for tax purposes (to pay the tax obligations), to pay the various outstanding debts (town halls, water supply, sewerage), and to make the transfer to the Department of Lands and Surveys.
All these, of course, have a number of other parameters which will have to be examined and dealt with, but I will not go into these at this time because it would be far from simple to list them out and explain them. We would be getting into very deep tax issues, which would probably be complex and difficult to understand.
Usually, who turns to you for collaboration? The real estate agent, the buyer of a property, the seller, as well as who has to cover your own costs and payment in the end?
Usually, it is the seller who approaches me and also covers my expenses, because it is them who will have to be examined for tax purposes and consequently secure the tax exemption. But there are also times when real estate agents cover the transaction costs for our services.
Is your fee always fixed or does it vary according to the needs of each case and the time you will invest until it is processed?
Obviously, each case has a different cost, depending on the difficulty, volume and time it will take to process it.
Personally, I will charge the same for a case where the sale price is €10,000, as well as for another where the sale price is €1,000,000, if the volume of work is the same.
Are there cases with a very high degree of difficulty of completion and if so, usually which area do they relate to (e.g. sale, donation, transfer, inheritance cases)?
The most time-consuming and difficult cases, that also have the greatest inconvenience are those that relate to obtaining a right of way, forced sales and forced divisions. Difficult cases are also some that have to do with complex administrations, for example, when heirs have died and in turn have left other heirs.
There are cases of inheritance whose administration requires a lot of time and constant monitoring. To be honest, I personally avoid such cases.
How long can it take on average for all your obligations to be completed in one operation? Which parts are more time-consuming and in which services do you usually find obstacles and delays?
A normal sale takes 20-40 days to complete. If the client is cooperative, honest, and organized… It can be completed sooner.
Time-consuming is when the seller is a company, and will be more thoroughly audited by the Tax Department. In addition, in cases where it will be necessary for the property to be valuated by the Tax Department – in which case it will justifiably take some time – or when it comes to exchanges or inducements.
At the same time, delays may arise from banks in matters of loan approval.
More generally, in relation to a buyer and a seller, which expenses, taxes and public services do they have to cover – each on their side, and to what extent do you personally inform them from the beginning of all their obligations?
The seller will cover their tax obligations, as well as the town halls, water supply and sewerage – soon also communal expenses. The buyer is responsible for paying the stamp duty of the sales document and its submission where necessary, the VAT if any, as well as the transfer rights.
Often, we have heard landlords say in amazement that they were unaware of the need to pay capital gains tax. Please explain to us what exactly this tax is, as well as how it is calculated.
Capital gains tax is paid when the seller generates a profit on the sale of a property. The rate of taxation is 20% on the profit. Below, I will give a general example to make it clearer.
If I bought a property in 2000 at a price of €100,000, and today I sell it for €250,000, I generate a profit of €150,000. From this €150,000 will be deducted, among others, the indexation of the purchase price at today’s prices, various expenses that I am entitled to claim such as interest on the loan for the purchase of the property, the commission of the estate agent, transfer rights to purchase the property. To these costs is added the tax exemption or even the loss that a natural person can transfer. This is how the total cost is calculated.
In our example, the cost of buying the property in 2000, at today’s prices, adjusted by the index, amounts to €140,000. We add to this the expenses for which I am entitled to tax relief, which are €30,000 and if this is my first sale, another €17,086 (which is the lifetime tax relief to which an individual is entitled). We end up with a cost of €187,086.
Our profit therefore is: €250,000 – €187,086 = €62,914. This is taxed at 20%, i.e. €12,583.
This is exactly the capital gains tax we are hearing about.
In this case we should note something that many people do not understand. Let’s say that in the above example, this property came into my possession through a donation – from my parents – in 2020, but its purchase was made by my parents in 2000. The date of acquisition for calculating tax on the property is considered to be the date of purchase (2000) and not the date on which it came into my possession.
Whose obligation is it to inform the client from the outset about the payment of the capital gains tax?
The first person who should inform the seller of the existence of any capital gains tax, is the first person who comes in contact with the seller. I would say that usually, real estate agents must report the existence of this particular tax. As far as myself is concerned, when the case comes to me and I see that the property may be subject to taxation, I will report this to the seller.
On the other hand, what a real estate agent should definitely mention to the buyer in order not to be caught by surprise, is that during the transfer to the Department of Lands and Surveys, there will be transfer fees that he will have to cover himself.
If I, as an interested party, were to go to the Department of Lands and Surveys for a title transfer or to another public service for tax reasons, do you think that I would be served in the same time frame and with the same ease as you?
Anyone can do a task on their own, without the input of a service provider like I am. But certainly, with the experience of a specialist, the processing time will be less.
