If you have acquired an immovable property in North Cyprus and would like to rent it out, you should be familiar with Tenancy Agreements as well as the TRNC tax requirements for letting a property.
A Tenancy Agreement is a legally binding document which gives the tenant the right to live in the property whilst imposing certain rights and obligations on both the landlord and tenant (for example, the landlord having the right to receive rent by the tenant). A Tenancy Agreement (which can be prepared in both Turkish and/or English) typically includes the following information;
The Tenancy Agreement must be signed and witnessed in person, by both parties. If either party cannot, a Power of Attorney may sign it for and on their behalf. The Tenancy Agreement must also be stamped - stamp duty/tax is paid by the tenant and/or the landlord and registered at the Tax Office within 21 days of signing and registering the Contract at the Tax Office.
Documents required for registration with the TRNC Tax Office
Failing to register with the tax office renders the Tenancy Agreement null and void.
Letting a property without an Agreement Having a Tenancy Agreement (whether it being for a short-term or long-term let) is very important, as tax evasion is a huge problem in the TRNC.
Thus, we advise you to have a Tenancy Agreement - signed and registered – and that you ensure that payment on rental tax is made at the Tax Office.
Otherwise, the Tax Office will calculate an estimated rental income for your property and will require you to pay it (it is the Landlord’s responsibility to provide rental income records to the Tax Office).
Rental Tax Rates in Northern Cyprus8% – of rental payment (as per the Tenancy Agreement) for rent payments in Turkish Lira;13% – of rental payment (as per the Tenancy Agreement) for any other currency of rental payment (Great British Pounds (£), Euros (€), Dollars ($))
If the tenant fails and refuses to make payments in accordance with the Tenancy Agreement, the Tenancy Agreement should be terminated and the landlord should notify the TRNC Tax Office of the termination - otherwise the income tax will continue to accrue.
When taxes are paid, the tax office issues receipts. We advise that these receipts should be kept on record along with all the Tenancy Agreements of the property and copies of the receipts.