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GUIDE TO PURCHASING PROPERTY IN THE
TURKISH REPUBLIC OF NORTHERN CYPRUS
 Under
the laws of the Turkish Republic of Northern Cyprus (TRNC) non-TRNC
citizens are entitled to take title to only one property up to a
maximum area of 1 donum per household. For the purposes of this law,
husband and wife count as one household. Before the title deeds to
the property can be registered in your name, you will need to have
permission from the TRNC Council of Ministers. This is explained in
more detail below. If you wish to take title to more than 1
property, or a property over 1 donum in area, we can give you advice
on using trustees or setting up a TRNC company to hold the title to
the property for you.
The conveyance procedure (followed by
Naomi Mehmet & Partners) is designed to ensure that your interests
are protected as far as possible throughout the whole transaction.
The first step will be an initial meeting with you to obtain
information about the property you have chosen and any informal
agreements you have made with the vendor regarding price, payment
schedule and included items. This stage may also involve taking a
power of attorney from you to ensure that we can act on your behalf
to sign documents if you are away from Northern Cyprus for long
periods of time.
We will then prepare a Contract of Sale
to safeguard your interests. The Contract of Sale will include all
important terms such as plot number, plot size, price, payment
schedule, completion date with penalty clauses for late completion
and all floor plans and specifications will be attached to the
contract to ensure that the vendor is bound to carry out the
construction work in accordance with these. The contract will be
sent to both the vendor and the purchaser for review. When both
parties are happy the contract will be signed. You will be given the
option to pay the stamp duty at this point. Under new regulations,
the Tax Office are requesting to see a copy of the contract of sale
prior to transfer of title with all stamp duty paid up. Stamp duty
is payable at 0.5% of the contract price if paid within 1 month of
the contract date. If it is not paid within this time, it increases
until it becomes 1.5% if paid after 6 months. You will have the
option to pay upfront or pay on transfer of title and pay a higher
rate.
We will next conduct the necessary land
registry searches on your behalf to ensure that the vendor is the
registered freehold owner of the land and that there are no
mortgages/charges, injunctions or other encumbrances on the
property. We will also check that the building permission for the
construction has been obtained. We will then make the application to
the Council of Ministers for your permission to purchase. The
permission process can take a long time to complete, the current
estimation is around two years. However, this will not prevent you
from moving into the property or leasing the property or possibly
even selling the property – as standard practice, we always try to
negotiate with the vendor the insertion of a clause into the
contract allowing you to sell the property before taking title to
the property. We can also provide advice on other ways to secure
your interest until you receive the title deeds, for example by
registering a charge over the property.
Whilst processing your purchase permit
application, the Council of Ministers will take searches from the
land registry, the military and the immigration authorities and
provided that these are positive, the permission will be granted. In
the unlikely event that your application for permission is refused,
you will be able to nominate any other person to take title to the
property on your behalf and hold the property on trust for you. We
can assist you with the drafting of the necessary trust deeds.
Once your purchase permission has been granted, we will notify you
and then fill out all of the necessary land registry valuation forms
for the valuation of the property. It is usually at this point that
taxes will be payable. The taxes are calculated based on the land
registry valuation and are currently at the following rates:
-
Land Registry Transfer Fee – 6%
(however, every purchaser has a once in a lifetime option to
reduce this fee from 6% to 3%. At the time of transfer, we will
ask you whether you wish to use your option and if you do, you
will only pay 3%).
-
VAT – 5%
-
Stamp Duty 1.5% (if this has not
already been paid – see above)
The taxes will be paid and the title
deeds will be registered in your name. If you have left us with
power of attorney, all of this can be dealt with without you being
required to travel to the TRNC. We will then collect and keep the
title deeds for you until you are ready to collect them.
BUYING PROPERTY IN THE TRNC –
FREQUENTLY ASKED QUESTIONS
I am not a citizen of the TRNC, but
I want to purchase two properties in the TRNC? How can I do this?
You can sign the contract of sale for the two properties in your
own name, however, you can only apply for purchase permission for
and take title to one property. Therefore, you will need to find a
nominee (this person should be a friend or relative or someone you
know and trust) to take title to the property and hold the property
on trust for you or you will need to set up a TRNC company. Please
ask us for more detailed advice on trusts and companies.
Can my spouse and I purchase one
property each?
No. Husband and wife are counted as one household and the
current property restrictions are one property per household.
How long will the purchase
permission process take and what does it involve?
This process can take some time - current estimations are around
two years. The process involves searches being take from the Land
Registry, the Immigration and the Military.
Do I need to wait for my purchase permission before I can move into
my property?
No. Once your property is complete, you will be able to take
possession of your property and move in.
Can I sell my property before I obtain my purchase permission?
This depends on the terms of your contract of sale. As standard
practice at Naomi Mehmet & Partners, we always try to negotiate with
the vendor to insert a clause allowing you to sell the property
before taking title. We would then simply prepare an assignment of
contract to be signed between you, the vendor and the new purchasers
assigning all of your rights and obligations under the contract to
the new purchasers. Selling before taking title also has tax
advantages as taxes are only payable when a transfer of title takes
place.
What taxes are payable on the purchase and when are these payable?
Taxes are usually payable right at the end of the transaction
after your purchase permit has been granted and the title deeds are
being transferred into your name. However, some vendors require VAT
to be paid on the sale price at the date of delivery of possession
of the property.
The rates of tax are as follows:
There is also a new regulation
governing stamp duty on property purchases. The Tax Office is now
requiring the contract of sale to be presented prior to transfer fo
title and for stamp duty to be paid. Stamp duty is payable at 0.5%
of the contract price if paid within 1 month of the contract date.
If it is not paid within this time, it increases until after 6
months, it becomes 1.5% of the contract price.
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is owned by Naomi Mehmet & Partners. You may download, print and
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without the prior written consent of Naomi Mehmet & Partners.
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