Due to the special political situation, Northern Cyprus and the real estate market in this region are somewhat isolated. However, despite this, the northern republic is actively developing and attracting tourists and investors from all over the world.
The Mediterranean coast offers more shops, hotels and modern residential complexes. Mountain regions are not far behind. Often foreign citizens come to the Turkish Republic of Northern Cyprus as tourists, after which they decide to buy an apartment or house. This allows you to vacation in the TRNC not for a couple of weeks a year, but to be in Cyprus almost all year round. Recently, Northern Cyprus has become very popular for citizens of Germany and Northern Europe.
Many foreigners purchase property in the towns and cities of Northern Cyprus in order to settle for permanent residence. A comfortable climate, beautiful scenery, healthy products and developed infrastructure attract investors to the Turkish Republic of Northern Cyprus. Modern medical facilities, international universities and English-language schools are available to residents.
Home buying procedure
Despite the special political status of Northern Cyprus, foreigners have always, and recently very actively, bought real estate here. Such transactions are absolutely legal and recognized by the jurisdictions of other countries around the world.
As a result of the division of the territory of Cyprus, most Greeks were forced to leave their homes (which have now turned into ruins) and moved to the southern part of the island. However, the question remains: do they have rights to their property in the northern part of the island.
Previously, there were precedents when the original owners sought to return the property, but according to the decision of the ECHR, property in Northern Cyprus cannot be returned. The Greeks' claims are reviewed by the Real Estate Commission, and if they are justified, the people receive compensation. We would like to note that we are talking only about plots of land, since the real estate that was on those plots has already fallen into complete disrepair.
Today, a foreigner can buy only one piece of real estate in the TRNC: an apartment, a house or a plot. If you plan to purchase several real estate properties in Northern Cyprus, then the transactions are registered in the name of other family members - children, spouse. According to expert data, this law will be revised in the near future, and a foreigner will be able to register up to four apartments or houses.
A property purchased in Northern Cyprus is owned by the buyer and is inherited. Land is also purchased as property, rather than leased, as in some countries.
Deal stages
Let's take a closer look at the main stages of how to purchase an apartment in the TRNC:
- Finding a suitable apartment and agreeing on the terms of the transaction.
Depending on the purpose of purchasing real estate - for permanent residence, vacation or rental housing - choose a property near the coast and beaches, in a mountainous area, in a big city or a sparsely populated village.
Property prices in the Turkish Republic of Northern Cyprus are traditionally quoted in pounds. The purchase and sale transaction can be carried out in another currency - euros, dollars or lira.
Once the best option for an apartment has been found, a deposit of £5,000 must be paid in order for the property to be taken off the market.
When purchasing an apartment from a developer, you can get an installment plan until the construction of the house is completed. It is interest-free, but sometimes interest is also provided if installments are needed within several years after completion of construction. The first payment is 0-35% of the cost of the apartment. If the property is at the final stage of construction or is ready for operation, then sometimes you need to immediately pay about 80% of the total cost of housing.
Throughout all stages of the purchase and sale transaction, the interests of the buyer are represented by a lawyer with the appropriate license. He checks documents, prepares a purchase and sale agreement, registers it, interacts with tax authorities, and also leads the process of transferring ownership to the client's name.
Our company employs real professionals with extensive experience who will not only help you find a suitable villa, house or apartment in the TRNC, but will also check the package of documents, help you complete a real estate transaction and answer all your questions.
- Signing the purchase and sale agreement and transferring money.
Typically, the buyer settles with the seller by transferring money to the lawyer’s account, or less often to the developer’s account. You can transfer money to the developer’s account if you have previously purchased something from this developer and completely trust him.
According to the latest data from real estate agents in Russia, it is more difficult for Russians to make payments due to the disconnection of many banks from the system of international transfers. However, some Russian banking institutions still process transactions, but the process takes more time. For Russia, Northern Cyprus has the status of Turkey, that is, a friendly country. It also matters who the seller is and what citizenship he has. If the seller is a development company in Northern Cyprus, then no questions arise.
When buying a house in Cyprus from an individual, a lawyer prepares documents and the money is transferred to the lawyer’s account.
Once all payments have been made in accordance with the cost of the house or apartment and the agreed terms, the purchase and sale agreement is signed. It is concluded in English and Turkish, as well as in the buyer’s native language. Each page of the contract is signed by the buyer, the seller or his authorized representative, as well as two witnesses.
The buyer must pay a duty of 0.5% of the transaction amount. As a rule, this amount is immediately transferred to the lawyer’s account. Then the contract is submitted to the department for registration. According to the adopted law, the document must be submitted for registration no later than 21 days from the date of the transaction. It is after registration that the buyer becomes the owner of the property.
- Receiving the title.
In Northern Cyprus there is a document that confirms the right to full ownership of real estate - a title. However, its presence is not at all necessary. Based on the signed purchase and sale agreement, a person is already the owner of the apartment and can dispose of it at his own discretion: live independently, rent it out or pass it on by inheritance.
In the absence of a title, if the property is sold, prior approval from the developer will be required. This is a kind of limiting factor, so all buyers strive to draw up this document.
Before registering a title, a foreign person must obtain permission to own real estate, which is issued by the Ministry of Internal Affairs of the Republic. The procedure can take from 6 to 12 months - it all depends on the person’s citizenship.
After receiving permission, you must pay VAT tax - 5% of the amount, as well as a fee for re-registration of title in the amount of 3% (in the case of secondary housing).
When purchasing a home on the secondary market, the title may already have been issued and the VAT tax on the property may have already been paid. In this case, only title transfer tax is paid.
Necessary documents for purchasing housing
All foreigners who plan to transfer title to real estate into their name after purchasing a home in the TRNC must obtain permission from the Council of Ministers. To do this, you should collect a package of documents:
- application - written to the Ministry of Internal Affairs of Northern Cyprus according to the established template;
- copy and original identity document;
- a completed form with personal data, which is issued by employees of the Ministry of Internal Affairs;
- land map;
- a copy of the property title;
- certificate of no criminal record - issued in the applicant’s home country, after which it is certified by a notary and translated into Turkish;
- a copy of the purchase and sale agreement.
Property tax in Northern Cyprus
When buying property in Northern Cyprus, you must pay the following types of taxes in stages:
- Stamp duty is a mandatory tax that is paid to the Tax Office to register the purchase and sale agreement for an apartment in the Land Registry no later than 21 days from the date of signing the agreement between the seller and the buyer. The amount is 0.5% of the cost of the apartment specified in the contract.
- VAT is 5% of the price of real estate in Northern Cyprus, specified in the purchase and sale agreement. Sometimes this has already been paid for by the previous owners.
- Transfer Fee - Paid to the Land Registry before the title of the property is transferred to the buyer. The tax amount is 12% of the assessed value of the property in the case of a new property, and payment is made in two stages: 6% is paid at the time of the transaction, and the remaining 6% is paid before transferring the title to the name of the buyer.
There are also several taxes for the maintenance of an already purchased apartment:
- Annual property tax is determined by the size of the residential property: 3 liras are paid annually for each square meter. Payment is made once a year only for the closed area, terraces do not include this.
- Cleanliness tax - includes cleaning of road surfaces, garbage removal, and treatment of greenery from insects. The amount is paid annually and remains fixed.
- Tax on rental housing. If you plan to buy an apartment and rent it out to foreign tourists, you must pay a tax of 10% of the rental price.
- Profit gain tax – paid by the seller when selling an apartment. The amount of the fee depends on whether the seller is a professional employee or an individual. In the first case, the tax will be 4.7% of the cost of housing, and in the second – 2.8%.
Our qualified specialists are ready to answer any of your questions, as well as help in finding a suitable apartment in Northern Cyprus and obtaining a residence permit. We will check the package of documents for the transaction and will accompany you at all stages of concluding the purchase and sale agreement.
