The Turkish Republic of Northern Cyprus is one of the advantageous points for those who want to invest in real estate and real estate. In a country with a rapidly developing economy, there are some issues that need to be known before making a decision to buy real estate:
Title Deed Types
There are 3 different types of title deeds in the Turkish Republic of Northern Cyprus. Before purchasing, you should find out which type of title deed the immovable property has.
- The most problematic type of title deed in the country is the Turkish title deed.
- Equivalent title deeds are title deeds to immovable properties given in exchange for the real estate left behind by people moving from the South to the North.
- Allocation deeds belong to immovable properties allocated by the state to people who do not own the immovable property.
Cabinet Authorization for Foreign Investors
Non-citizens must first obtain permission from the Council of Ministers to purchase real estate. The application to the Council of Ministers takes between 6 and 12 months to be finalized. Foreign investors have the right to acquire 1 immovable property in the Turkish Republic of Northern Cyprus. This property may be a dwelling of no more than 5 acres or land of no more than 1 acre.
Tax
To avoid any surprises during the purchase process, it is useful to get information about the tax amounts to be paid. There are 4 types of taxes to be faced when acquiring immovable property in the country.
- Title Deed Transfer Fee: The title deed fee rate is 6% for TRNC and Turkish citizens and 12% for foreign nationals until December 31, 2023. This amount is paid by the buyer. However, if the buyer is not making the purchase for commercial purposes, they can pay this amount at a one-time 50% discount.
Value Added Tax:
VAT is set at 5%. This amount is paid by the buyer. VAT is not payable on second-hand house and land sales if the seller is not selling for profit.
Withholding tax:
This type of tax is paid by the seller. This rate is 4% if the seller is making a profit. If there is no profit motive in the sale, this amount is reduced to 2.8%. Non-profit sellers are exempt from this tax once in their lifetime.- Stamp Stamp: If the sale is based on an unfinished project, the contract is registered with the land registry office. A 0.5% stamp fee is charged for this transaction, which formalizes the sale.
Electricity and water connection costs will be added to the fees to be paid in case of housing purchase.
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