Buying a House in North Cyprus
Well, if you have decided to buy a house in North Cyprus, either to live in or only as an investment, we suggest you go through this article before starting.
If you know the island well yourself, you might consider searching for the right region and the right property for you. Otherwise, it could be a good idea to contact a local agent who could help you in your search. The first step will be choosing the region – beachside locations or the mountains? City centres or quieter towns? After you decide on the location, it will be easier for you to choose the type of house you are looking for – an apartment or villa, with a garden or a pool. You might also consider visiting developers on the island which will give you the opportunity to find a house in a newly developed modern complex with different options of units and several facilities.
Once you decide on the house you would like to buy, you will need to pay a deposit to start the sales procedure, which will also allow the necessary time for the sales contract to be drafted agreed on and signed. Before signing the contract, it is advisable that you ask about any extras and what exactly is included in the price.
At this point, it is essential to hire a lawyer who will be responsible for informing you and providing you with all documents relating to taxes, applications, processes from the time of sale through to the transfer of the title deed of the property you purchase. Furthermore, the lawyer will also deal with processing your permissions to purchase as a foreigner by applying to the appropriate Governmental Offices and will follow up on your applications to ensure completion. A property purchase may even be completed from abroad if the lawyer has been granted the Power of Attorney to act on your behalf.
A contract of sale is then drawn up by your lawyer, setting down the terms of sale, i.e. property details, specifications of property, site plan of the property, governmental site plan of the land in North Cyprus, floor plans, price, payment terms, timescale, vendor, purchaser and any extra requirements. The prepared contract is then signed between the Seller and the Buyer.
A permit to purchase from the Council of Ministers in North Cyprus is then applied for by your lawyer. This may take around 12-18 months to be clarified. Once the permission is granted, the purchaser is entitled to register his or her name at the Land Registry as the registered legal owner of the North Cyprus Property. Again, in the absence of the purchaser, a Power of Attorney will allow the lawyer who will, on the clients behalf, deal with all these formalities. Most likely the lawyer will notify you when the permission has been granted and he/she will then fill out all of the necessary land registry valuation forms for the valuation of the property that you have purchased. It is usually at this point that taxes will be payable. The taxes are calculated based on the land registry valuation (usually the open market value of the property on the date the transaction took place) and are currently at the following rates:
Land Registry Transfer Fee at 6% (however, every purchaser has a once in a lifetime option to reduce this fee from 6% to 3%. At the time of transfer, you will be asked whether you wish to use this option and so, you will only pay 3%)
VAT at 5%
Stamp duty is to be paid at 0.5% of the contract value if paid within 1 month upon signing the contract.
Property infrastructure payments which have to be paid and can vary from site to site
The sales process will come to an end when all of the above taxes are paid and the title deeds are registered in your name.