Buyers Guide

Legal advise + Taxes

Legal advise + Taxes

GUIDE TO PURCHASING PROPERTY IN THE TURKISH REPBUBLIC OF NORTHERN CYPRUS

 

 

What documents are required when purchasing property?

Your passport is the only documentation required to purchase a property.

 

How long does the process take?

On average, the time span from deposit to completion is approximately nine months.

 

How many properties can an individual purchase?

Under the new laws of the Turkish Republic of Northern Cyprus (TRNC) non-TRNC Citizens are entitled to hold a title deed to only one property up to a maximum area of 5 donums per household providing that the property only consists of one dwelling (previously this was 1 donum, but this has now been increased by the Immovable Property Acquisition and Long Term Lease (Aliens) Law 52-2008). Building permission will not be granted to build further dwellings after permission to purchase has been granted. 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 5 donums in size, we can give you advice on using our Trust Company or setting up a TRNC company to hold the title for the property.

 

What does the initial solicitor meeting include?

The conveyancing procedure followed by your legal consultants 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 the price, payment schedule and included items if any. 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.

 

Safeguarding your interests

A Contract of Sale will be drawn up 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.

 

Registration of the Contract of Sale

New regulations since 2nd January 2008 require all Contracts of Sale for the purchase of immovable property in Northern Cyprus to be registered at the District Lands Office within 21 (twenty one) days of being signed and it is now compulsory for the Stamp Duty to be paid at the rate of 0.5% before registration can take place. Once the Contract of sale is registered the purchaser is protected against the land being sold, to a third party and the Contract will take priority over any subsequent encumbrance.

 

Permission to Purchase Application

Further to the Contract of Sale being signed, stamped and registered and once the solicitor chosen are in receipt of your original police report to show you have no criminal convictions, we will continue to submit your application to the Council of Ministers for your permission to purchase. 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. The permission process can take a long time to complete; the current estimation is around a year and a half, although this time has been reduced at present to around 9 months. However, this will not prevent you from moving into the property and/or renting the property and/or selling the property.

 

Can I sell my property before I obtain my purchase permission?

This depends on the terms of your contract of sale. As standard practice 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.

 

How to obtain your title deed

Once your purchase permission has been granted, you will be notified. If you wish for us to act for you (at an additional charge) in connection with the transfer of title we will obtain the necessary power of attorneys from you, fill out all of the necessary land registry valuation forms for the valuation of the property and pay all the taxes due on transfer of title into your  name . We will then collect and keep the title deeds for you until you are ready to collect them.

 

Taxes to pay during your purchase

During your purchase you will also encounter costs for Stamp Duty, VAT and Transfer Fee,

these are detailed below:

  • Stamp Duty – This is assessed on the contract price of the property and is currently 0.5%, this is payable on or before signing of the contract.
  •  VAT (KDV) – This is assessed on the contract price of the property and is currently 5%, this is payable upon possession of the property.
  •  Transfer Fee – This is assessed on the contract price of the property. It is currently 3%. This is payable upon transfer of the title deed into your name.
  • Capital gains tax (Turkish – Stopaj) – This is payable by the Vendor of the property, therefore when you sell your property. The amount payable depends on whether the Vendor is a Professional Vendor or a private individual. If the Vendor is a Professional Vendor, the rate will be 6.25%. Otherwise, the rate will be 3.5%.

 

Applying for Temporary Residence in the Turkish Republic of Northern Cyprus

Many foreign individuals from the majority of countries in the world are eligible for temporary residency within the TRNC. There are a few stipulations which need to be met in order to submit an application; firstly you need to either own and/or rent a property within the TRNC and secondly you need to demonstrate sufficient funds held in a TRNC bank account. The reason due to this is that the laws and regulations within the TRNC are not subject to the EU. Therefore the TRNC is often an easier country to obtain temporary residency than many other European countries. If you wish to come on holiday to the TRNC and/or for a short stay, upon your arrival into the TRNC the customs office will stamp a tourist visa into your passport and/or on a separate white sheet of paper. This allows you to stay within the TRNC for the time specified on the tourist visa (normally 90 days). Please note that a temporary residence permit only entitles you to live within the TRNC, it does not give you any rights to employment or setting up a business, if you wish to work and/or set up a company within the TRNC you will need to contact a solicitor for further information.

 

Visitor Visa

A visitor visa is given to you on your arrival into the TRNC and it allows you to stay in the TRNC as a tourist for normally 90 days. On or before the expiry of the tourist visa you must leave the TRNC, if you choose to remain in the TRNC you will be liable to pay a fine for each day you exceed the visa period. In order to gain another tourist visa you must leave the TRNC and return the next day, such as flying to Turkey, however we would not suggest that you do this on a regular occurrence. If you wish to remain within the TRNC longer than the duration of a tourist visa you must apply for either a temporary residence permit or a work permit.

 

Further information in relation to residing in the Turkish Republic of Northern Cyprus

Children under 18 years old do not need a permit. Therefore, families moving to the TRNC only have to obtain a temporary residence permit for adult family members.

Citizenship is automatically obtained by all persons whose father and/or mother is a citizen of the TRNC, and those who marry citizens of the TRNC.

 

Making a Will in the Turkish Republic of Northern Cyprus

Whether you reside in the TRNC or are someone who only visits a few times a year, we recommend that you have a will prepared if you have any assets within the TRNC. Making a will is very easy to do and ensures that all your belongings will be shared between the people of your choice. An important point that should be noted is that if you die intestate (i.e. without leaving a Will) your spouse will not automatically inherit your estate, if there are surviving children (in which case a surviving spouse will only receive a 1/6th share and the remaining 5/6th will go to any surviving children) or other specified relatives. This can be done by the solicitor you have chosen or contact us for assistance.

 

Can I pay for land or a property from abroad?

All monies can be transferred into our UK account and subsequently wired to us here in the TRNC.

 

 

This information has been kindly provided by:

S&A Advocates and Legal Consultants

Address: 49-5 Hz, Omer Caddesi, Karakum, Girne, via-Mersin 10, Turkey

Tel: (0090) 392 330 07 53 / 54 Fax: (0090)392 815 03 06 Mobile: ( 0090)533 872 28 21

Web: www.sa-advocates.com – E-mail: info@sa-advocates.com