GUIDE TO PURCHASING PROPERTY IN NORTH CYPRUS

Foreign citizens have the right to acquire any kind of property or land in North Cyprus whether it be an apartment, villa, commercial or investment property. It is important, however, to get acquainted with the property laws of North Cyprus and to find a reputable lawyer when you are looking to purchase.

FINDING A LAWYER who will carry out and guide you through the entirety of the purchasing process is a must. We recommend that any step you take, whether it is in regards to paperwork or monetary payments should not be made without consulting your lawyer. This eliminates the risks you may carry as the Purchaser and safeguards your rights and interests that have been agreed to and included in the Contract of Sale.

​If during the purchasing process you are physically not in North Cyprus to sign paperwork or if you simply prefer a lawyer to handle the paperwork on your behalf, you may give them “Power of Attorney” (POA) to do so. With a POA a lawyer can also make payments in regards to the property and manage the entire conveyancing process on your behalf.
THE CONTRACT OF SALE is a legally binding agreement between the Vendor and Purchaser, protecting both parties’ rights and interests regarding the property and should include all the terms agreed. A Contract of Sale would typically include:

​     Parties to the agreement/Contract of Sale;

• A full description of the property and title deed details
• Payment details (amount, method…);
• Electric/Water/ etc.;
• TAX (VAT, Transfer Capital Gains Tax, Stopaj Tax);
• Competent Jurisdiction;
• Any Punitive Clauses;
• Warranties;
• Rights and obligations of parties;
• Any other agreed clause; and

Terms of termination

​After the Contract of Sale has been created and agreed to by both parties involved, it must be signed by both parties.
PAYING THE STAMP DUTY has to be done prior to the Contract of Sale being registered.
 
REGISTERING THE CONTRACT at the District Land Registry Office is the next step following the Contract of Sale being signed. This essentially legitimates the Contract of Sale, whilst also protecting the Purchaser and ensuring that the property and/or land are free from utility debts, mortgages, legal claims, court orders, prior commitments or obligations, injunction orders, encumbrances and adverse claims. This must be done within 21 days of the Contract of Sale being signed.
 
PERMISSION TO PURCHASE (PTP):
By law, a foreigner buying property in North Cyprus must make an application for PTP. This is a lengthy process carried out by the Council of Ministers and may take up to 12 months to complete before the permission is granted/refused. It does not, however, stop you from purchasing the property – PTP can be applied for as soon as the Contract of Sale has been registered. The PTP gives the Purchaser the right to become the legal owner of the land.

Once PTP has been granted to the Purchaser the title deed may be transferred. A lawyer will guide through any taxes and fees requiring payment regarding the transfer. These include; Capital Gains Tax (Stopaj tax), VAT, Transfer fee and Municipality Tax.
Taxes that the Vendor or/and Purchaser must pay;

• Stamp Duty - rated at 0.5% of the Contract of Sale price and is paid at the Tax Office.

 

• Capital Gains tax (Stopaj tax) - 4.25% of the property value and is normally paid by the Vendor unless agreed otherwise in the Contract of Sale.

 

• VAT - 5% of the property value and is paid by the Purchaser unless agreed otherwise in the Contract of Sale.

 

• Transfer Fee* - 4% of property value and paid by the Purchaser. The Purchaser has a once-in-a-lifetime option to pay the Transfer Fee rate at a rate of 2%. This once-in-a-lifetime option can only be used for ONE property purchase. These rates can be changed in accordance to the decisions made by the Council of Ministers.

*the Transfer Fee is calculated on the Contract of Sale price OR the Land Registry valuation of the property/land, whichever value is greater.  

• Municipality Fee - 1% of the total Transfer Fee 

FINALLY, we recommend that you create a Will if you are a non-TRNC citizen and have purchased property in North Cyprus.TRNC citizens are entitled to only a portion of their assets with the rest being allocated in accordance with the law, whereas foreign nationals (those who do not hold TRNC citizenship) have complete freedom of disposition 

of their movable property (i.e. personal possessions or money) and immovable property (i.e. land or real estate) by Will. Furthermore, any property or assets placed in a Will prepared in your home country will not be recognised in North Cyprus. Therefore, making a Will following a property purchase as a foreigner is always advised.