Step-by-step Buyer’s Guide
Once you have settled on your desired property and the final price, a sales agreement will be drawn up be either a solicitor or notary. This agreement will include the agreed price, timing, payment and delivery terms, and other such factors to do with your property. Once both parties are happy with the agreement, the contract will be signed and the sale will be considered done. After this point, the steps outlined below will take place:
Payment of Stamp Duty (Land )Tax
In accordance with current legislation, there will be a stamp duty charge of 0.5% of your final agreed price. This is to be paid to the Tax Office within 21 days of the contract being signed, and will make the sale legally binding and recognised.
Submission of Contract to the Land Registry
Foreign nationals will require “Property Purchase Permission” before any entry can be made in their name. The submission of the sales contract will ensure the buyer’s purchase rights are recognised and protected by law. The seller is required to register their undertaking to not allow the sold property to be passed into the possession or ownership of any third party.
Transfer of Title Deeds
Once payment has been made and purchase permission has been granted, the deeds of the property will be transferred into the name of the buyer. If both parties have completed their duties as set out by their agreement, the seller will transfer ownership of the property.
Title Transfer Fees
The buyer is liable for the payment of title transfer fees, which are to be paid to the Northern Cyprus Land Registry Office. If you are a first time buyer, the transfer fees of your discounted home will be covered up to 3% of the sale price of your property. For all parties who have utilised their discount right, this rate will be 6%.
Only citizens of the Turkish republic of Northern Cyprus (TRNC) are entitled to purchase property/land in Northern Cyprus. Those who are foreign nationals are required to apply for “Property Purchase Permission”, which is sent to the TRNC government for approval and can take between 3-8 months to resolve.
Non-TRNC citizens are entitled to purchase at most 1 property, or 1 acre of land. Married couples are considered one legal person, unless they do not share the same surname, in which case they are considered separate legal entities and can purchase one home each. This process is different for foreign companies.
During the sales process, the seller is liable to pay 4% withholding tax, whereas the buyer is liable to pay 5% VAT, 6% title fee, and 0.5% stamp duty fee. However, the provisions made in the sales agreement contract can alter these liabilities. Taxes will be calculated based on either the confirmed sales price, or the estimated value proposed by the Land Registry (whichever is higher). For more information regarding the taxes named in this section, click the link on the right titled Property and Tax Fees in TRNC.
Deed Types in TRNC
A title deed is a legal document that constitutes evidence of the ownership of property. The different types of deed are outlined below:
Those title deeds pertaining to Cypriot Turks pre-1974.
British/Other national Deeds
Those title deeds pertaining to British nationals, or foreign nationals pre-1974. These deeds are internationally recognised.
Those title deeds pertaining to Greek Cypriots pre-1974. These deeds are to the value equivalent to the land and properties left behind in the south by Turkish Cypriot refugees, as valued by the TRNC government.
Those deeds granted to individuals in return for their military contributions by the TRNC government, or those deeds granted to Turkish nationals who relocated to Cyprus post-1974. These deeds are government protected.
Those deeds pertaining to abandoned buildings that investors can lease for 49 years’ and have permission to develop and sub-let out for profit.
TRNC Tax and Property Fees
Here is a summary of the taxes payable during the sales process of property in TRNC.
If the seller is an individual who is not looking to make a profit, the withholding tax will be as follows: first sale at 0%, second or third sale within a year at 3.5%. Professional property developers looking to make a profit on the sale of the property are liable to pay 6.5% tax. This tax is payable to the Withholding Tax Office.
If the seller is an individual who is not looking to make a profit, VAT is non-payable. Professional property developers looking to make a profit on the sale of the property are liable to pay 5% VAT, which is to be paid on the day of transfer before transfer of the property.
Title Deed Transfer Fee
This fee is payable by the buyer and is to be paid before the transfer process begins. The 6% fee is reduced to 3% when the one-time right of exemption is exercised.
After both parties have signed the contract, 0.5% stamp duty is to be paid to the Tax Office within 21 days. Once the payment is registered, the buyer’s ownership right is recognised and protected by law.