What taxes must be paid when buying real estate in Northern Cyprus?
There are four different types of taxes
If the sales contract is closed, 0.5% of the sales price as stamp duty (paid by the seller)
- 12% registration fee for transfer of immovable property document, of which 6% must be paid before paying the stamp duty and the rest at the time of delivery of the document.
- 5% value added tax paid by the buyer. This type of tax is paid once and does not need to be paid for second-hand properties.
- Capital gains tax payable by the seller: If the transfer is made as a gift, the applicable taxes are different. 0.2% for gifts from parents to children, 0.4% for gifts from one spouse to another, and 0.4% capital tax for gifts from grandparents to grandchildren.
How can foreigners buy property in North Cyprus?
- Foreign nationals can only own immovable property that is equal to 1 piece of land, a maximum of 1 donum (a measuring unit of area equal to 1338 square meters) of land or 1 house.
- To buy more than one immovable property or a house or a property with an area of more than 1 donum, it is necessary to use a trustee (a reputable lawyer or a Cypriot trustee) or to establish a company in North Cyprus.
- To build a building or a house on the land, a construction permit must be obtained.
- The purchased property must be free of any mortgage or legal impediment.
- The seller must be the owner or the owner's legal representative. - The sales contract must be registered within 21 days from the date of signing in the Real Estate Registry Office.
- In order to register immovable property in the name of foreign nationals, the application for a property purchase permit must be submitted to the Ministry of Interior of Northern Cyprus and the permit must be issued by the Council of Ministers.
Types of property ownership documents in North Cyprus
- Turkish Title Northern Cyprus is currently politically under the control of Turkey. One of the conditions in the negotiations for the recognition of the Turkish Republic of Northern Cyprus by the European Union is that the population reaches the quorum, which is not far from reach due to the rapid development, and this issue is one of the factors that the capital It makes investing in North Cyprus more attractive. Therefore, one of the documents issued in North Cyprus is the Turkish real estate document, which is known as one of the most expensive documents. These documents are given to people who are originally from North Cyprus, and as a result, no exchange is made on it. If you can buy a property from a Turkish owner, you will be issued a Turkish property ownership document
- Foreign ownership document Such documents are considered for European people. Due to the fact that before the war, North and South Cyprus were known as one country, the country of Cyprus, and as a result it was completely in the hands of Europeans, so such documents are intended for Europeans. It is important to know that foreign documents are as valid as Turkish documents, and if Cyprus is reunified, there will be no problems with foreign properties.
- Exchange title document Another document that is presented in North Cyprus is called an exchange document. When the country of Cyprus was divided into North and South Cyprus, people living in the South had properties that belonged to the land of North Cyprus. Therefore, they had to exchange their properties with properties located in South Cyprus. Therefore, exchange documents were provided for them. As a result, if you see such a document in North Cyprus, you should know that the process of presenting this document was the exchange of property between North Cyprus and South Cyprus.
- Tahsis Title After the end of the war and in 1974, one of the plans of the North Cyprus government to support the families of martyrs and veterans and those affected by the war was to allocate lands to them according to the documents issued for such properties and lands in the term allocation or It is called Tahsis in Turkish.
- Pending Title Deed (TMD) If the property document is pending, that means it will not have a specific status. So it is best not to go for such properties. Unfortunately, some real estate agents in North Cyprus abuse people's trust. They acquire their capital and build construction projects, but they do not hand over a document to them because it has been clear from the beginning that such a property has a suspended document, and now it is the capital owners who must take legal action in order to obtain the document.