A refugee entrepreneur, who was paying the state €2,500 annually for land in the industrial area of Strovolos, found himself slapped with a demand for €200,000 per year.
This exorbitant increase is not an isolated incident, as industrialists and craftsmen attempting to renew contracts with the state are facing similar rent hikes, as revealed by three craftsmen from the Deryneia area in the Parliament.
The issue of rising rents gained momentum with the observed increase in land value.
Legislation dictates that the market rent is determined based on the land value, leading to a direct correlation between land value and rent. This has left business owners in a precarious position, as their incomes do not necessarily increase in tandem with the escalating rents.
Consequently, affected individuals are now calling for the determination of rent based on the usage of each property rather than the market rent.
Craftsmen and industrialists are also facing retroactive rent increases. According to Kyriakos Moustakas, spokesperson for the Cyprus Confederation of Professional Craftsmen and Shopkeepers (POVEK), some refugees are purportedly obligated to pay retroactively between €50,000 and €60,000.
Adding to the complexity is the fact that industrial plots and agricultural land (in industrial zones) fall under the purview of two different ministries, each utilizing distinct methods for calculating rent.
This discrepancy results in varying rents even for professionals practising the same trade side by side. The case presented to the Internal Affairs Committee by the representative of the Cyprus Chamber of Commerce and Industry (KEVE) exemplifies this issue.
“If a property is used for a carpentry shop and cannot be converted into a restaurant, hotel, or mall (which would lead to increased income), there is no reason to charge rent based on the land value,” stated the KEVE representative.
The confusion surrounding rent determination was brought to the attention of the committee by AKEL Member of Parliament Yiannakis Gavriel.
Committee president Aristos Damianou noted the absence of consideration for market rent in the Mackenzie area for several years, unlike the practice with craftsmen.
Speaking before the committee, Mr. Kiranidis, a member of the Cyprus Employers and Industrialists Federation (OEV) who began operating in the Strovolos industrial area immediately after seeking refuge, revealed that the state designated his land for reactivation purposes after he lost his factory in Mia Milia.
Initially, the rent was reasonable, but in 2009, after the first lease period ended, the state, through the Land Registry, demanded €200,000 instead of the initial €2,500.
After objections, the amount was reduced to €100,000 and eventually to around €50,000 in 2019. However, this amount is still considered high.
The only viable solution, according to Mr. Kiranidis, is to calculate rent based on usage rather than market value.
He emphasized the need for fair consideration of individual circumstances, as some property values are overestimated, leading to unjustifiably high rents.
“If market rent is imposed, all industries will close down. If they persist, they should compensate each individual’s investments (amounting to millions) and we will go elsewhere,” he noted.
