NCI

Buying a property in the Turkish Republic of Northern Cyprus (TRNC)

Buying a Property in the TRNC can be a complicated and strenuous for those who are not familiar with the law and legal procedure. At   we pride ourselves with the benefit of many years of experience in the conveyancing procedure for the sale and purchase of residential and commercial property in North Cyprus.

Purchasing a property from the UK in the TRNC is much easier…

In May 2007 E.B Sener Law & Conveyancing Firm and Hugh Jones LLP in London, UK entered into an association  which aims  to offer clients who wish to acquire property in the TRNC the services of a UK based legal firm and vice versa for Cypriot clients.

The association gives us the flexibility to provide clients with the ability to instruct us as well as Hugh Jones LLP to handle, inter alia, any transaction they may have pending in the TRNC.  This would then provide the client with the convenience of attending Hugh Jones LLP offices in London, if they wish, to sign documentation, rather than having to finance several trips to the TRNC during the course of the transaction.  At the clients discretion all communication can also be conducted through Hugh Jones LLP offİces in London.

Purchase Procedure

What type of title does the property have?

After the division of the island, in 1974, North Cyprus has developed its own rules and regulations and a different legal system has been constituted by the Turkish Cypriots in relation to conveyancing procedures. The first and foremost issue which should be clarified is the various types of title deeds that exist in the TRNC today. The various Title Deeds are as follows:

Taxes in relation to property purchase

There are four main taxes involved in any property sale and purchase transaction these taxes are:

Capital Gains Tax

Capital Gains Tax (Stopaj) which is payable to the Tax Office  is generally payable by the Vendor although this can always be varied by the parties by an express clause in the Contract of Sale.

The Tax Office requires a copy of the Contract of Sale to be presented prior to transfer of title. It will then calculate the Capital Gains Tax based on the basis of the assessed value of the property and is currently 4%.

V.A.T.

The Tax Office requires a copy of the Contract of Sale to be presented prior to transfer of title. It will then calculate the VAT based on the Contract value of the property and is currently 5% .

The payment of VAT depends on whether or not the transaction is subject to VAT.

This depends on whether the Vendor (the person who has title to the property not simply contractual ownership or possession of the property) is deemed by the Tax Office to be a ‘Professional Vendor’ (i.e. whether the transaction is of a commercial nature or for profit). If the Vendor is deemed to be a Professional Vendor, the transaction will be subject to VAT. If the Vendor is a private individual, not a Professional Vendor, the transaction will not be subject to VAT.

Transfer Fee

Transfer Fees  payable to the Land Registry Office just before transfer of title takes place  is usually paid by the purchaser and has currently been reduced from  6% to 3% (A once in a life time use) of the property assessed value.

The Land Registry will view the Contract of Sale before transfer of title to assess the value of the property and will calculate the Transfer Fee on the basis of the assessed value.

Stamp Duty

Stamp duty which is payable to the Tax Office and is calculated on the contract value of the property. Generally  Stamp Duty is payable by the Purchaser, although this can always be varied by the parties by an express clause in the Contract of Sale.

All Contracts of Sale must be registered at the District Lands Office within 21 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.

How we can help?

At E.B Sener Law & Conveyancing Firm and Hugh Jones LLP our English speaking lawyers offer independent and professional services to our clients wishing to purchase immovable property and assist and facilitate secure and efficient transactions from preliminary stages to post completion.

At the initial meeting we will obtain the particulars of the property you have chosen to purchase and look at any informal agreements you have made with the vendor regarding the purchase price, payment schedule and any items included within the sale. We will explain the procedure that you will need to follow including the taxes and fees you will need to pay and may be involved in investigations on your behalf to ensure the transactions are carried out securely and efficiently. 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.

As a result of recent legislation we are also required to establish your identity prior to undertaking work on your behalf.  Identity required are as follows:-  

Please also note that further documentation might be required in compliance with the current Money Laundering Regulations.

The general principles of our Conveyancing services are outlined below:-  

The obtainıng of permission to purchase is a protracted procedure and can take up to two years or longer but this does not mean that you will be unable to take possession of your new property once contracts have been exchanged. At E.B Sener Law & Conveyancing Firm and Hugh Jones LLP our staff will always be available to deal with any queries you may have and we will assist you at every stage of the process to ensure that you have the satisfaction of enjoying your property without having to worry about the legal procedures.

Buying Property in the TRC – 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 taken from the Land Registry, the Immigration and the Military. Please note that  in order to apply for a permission to purchase you will need to produce a Criminal Record Bureau Disclosure Report from the UK.

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. Once the contracts are exchanged between the partied and registered at the Land Registry you will then acquire beneficial interest and contractal rights of the property. Registering the contract ensures that you are protected from the property being sold or transferred to a third party  and from any subsequent liens being placed on the property.

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

This depends on the terms of your contract of sale. We will however 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.

What taxes are payable on the purchase and when are these payable?

Taxes, apart from stamp duty which is payable within 21 days of the date of the Contract, 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: