HOW TO BUY A PROPERTY IN NORTH CYPRUS
Procedures of purchase of immovable property in North Cyprus have some specific aspects. Although many of property conveyancing questions are covered by the British Law rules, some specific provisions of TRNC laws apply when the buyer is non-TRNC citizen.
Here we outline very basic rules that shall be abided by any foreign buyer. For more legal details we strongly recommend you to seek professional advice from local lawyers licensed to practice in North Cyprus, and we have a list of legal practitioners whom we can recommend and set up your meetings with them.
First of all, you do not necessarily have to be present in North Cyprus to go through all stages of your purchase transaction. We recommend you to give your local lawyer the Power Of Attorney to act on your behalf. This can be easily done during your first meeting with your lawyer here (or we can help you to arrange granting of POA through the Turkish Embassy in your country). POA is a safe and legitimate way of representation. On a basis of POA you will be represented here from preliminary stage of contract (drafting of contract and negotiating contractual terms with the Seller/Vendor) till the very end of its conveyancing process when you get into full ownership of your property (Transfer of Title over property). Your lawyer will check if the seller is the proper owner of the property and the property is legally free to be purchased by you (no liens, mortgage, other encumbrances).
Once the purchase contract is closed (signed by the parties), it has to be registered with the local Land Registry Office. Your lawyer will definitely advise when and how it shall be completed. At this stage you need to know that you will have to pay 6% (part of Property Tax) and 0,5% (Duty Stamp) amounts. The mentioned amounts usually are calculated from all or part of the contractual value of your property, ask your lawyer to clarify this with the seller.
Payments of purchase price can be made in cash, payment card, or bank transfers (GBP, USD, EUR, Cryptocurrency or TL). You will be advised by the lawyer about payment instructions.
You can acquire property on your own name or temporarily vest possession of it with the local trust company. Your lawyer will advise you on preferences, costs and tax incentives of such possessions.
You also may consider only investing into real estate in North Cyprus, which now is very attractive and profitable (in two recent years a market value increased at least 35 % per one year). In the case of investment, tax incentives are indeed attractive as investors have no obligation to pay property tax. In such cases property tax is paid by the owner. As an investor, in case you sell the property you are investing to, you don’t need to pay Capital Gains Tax from the first property sale. In case you invest into a few properties, you shall pay Capital Gains Tax which is currently 4% of the assessed value of the property.
Needless to say, any contractual party is under a must to abide by the terms of contract, especially payment terms in order to avoid delayed payment fees. If you hire a local lawyer, in case of any problems, please, discuss your issue without a delay with your lawyer who will mitigate the issue as much as possible in your interests.
When you purchase property for yourself, please note that at the same time you can acquire only one property into your ownership (if you are married, only one property as matrimonial ). However, it is possible to invest into other properties. We can advise you generally, how to proceed with this, and your lawyer will assist you properly in such a case.
We also advise you to discuss with your lawyers other legal questions, like residence permit, purchase of car, employment, insurance, inheritance, etc. As for the latter, needless to say, that the Will always serves the interests of your successors much better.
Once you decide that you acquire property on your own name and want to have full ownership over it (the Title), you have an obligation to complete several procedures related to transfer of the Title. Your lawyer will explain in more detail, however, what is worth to know in advance, is that for a transfer of Title into a foreign buyer it is condicional to get a permit from local authorities. In order to get such a permit, you need to present a so-called Criminal Record from a country that you are national to (country of your passport), to prove that you have no criminal convictions or pending conviction. The check-up of your Criminal Record by the TRNC authorities usually takes 6-10 months. Please, note, that at this time you may already use your property, i.e., in order to move into your property, you don’t need to wait until the Title will transfer on your name.
On a moment of transfer of Title over your property, you have an obligation to pay the rest of Property Tax (at meantime Property Tax is 12 %, as mentioned above 6% of it is payable at the moment of registration of your contract at the Land Registry Office).
You need to know also, that when you are buying property from a professional property developer who is a VAT payer, you must pay VAT which is currently 5%.
You can move into your property before transfer of Title, usually straight after the key is handed over to you. In case of new properties you also will have an obligation to pay a so-called generator fee which varies from 1500 to 3000 BBP, and pay local authorities for water and power supply meters and supply deposits (around 1000 GBP, currently).
Should you have an individual specific legal query, please, do not hesitate to contact us.