Property
Property Purchase/Renting Last Updated 3 Nov 2024
When buying a property in the TRNC you should ensure that you are protected by a contract of sale which ensures that all searches of the title to property are completed, you have permission to purchase and been able to conduct any other surveys or enquiries you and your lawyer consider necessary. You should not part with any monies, including a deposit, until and unless you have an agreement in place which properly protects your interests and ensures you that you will receive your Kocan when you pay the purchase price, and that any deposit will be returned if the sale falls through.
The BRS has now prepared a draft sample contract which provides for the holding of the deposit in trust, provides an adequate period of time for purchasers to conduct necessary enquiries into the property and allows for a timely completion when all of these enquiries are completed.
Typically, local advocates have used a contract of sale which provides for the transfer of the full purchase monies without permission to purchase (PTP) having been granted. The reason given for this is that it said to takes 18 months to two years for PTP to be granted and that no vendor will wait that long to complete. This leaves purchasers with possession of a property which they do not have full legal title to and having to find the vendor who in many cases has left the country and can delay renovation works and cause additional costs of architect's fees for building approvals. In fact, PTP applications are being processed in under two months so that a verbal confirmation of permission can be obtained within that time and a completion date set which is no longer than it would be for a purchase in the UK. Further changes to the PTP process are rumoured which may make this process even shorter.
Included in the Property section of this website is a sample contract which we would suggest anyone considering purchasing property takes to their advocate and reviews it with them prior to signing a deposit agreement. We would urge anyone buying a property not to sign a simple deposit agreement provided by an estate agent as these invariable envisage the forfeiting of the deposit prior to any searches of title or permission to purchase application being made. Nor do they provide any protection in respect of obtaining a Kocan in exchange for the purchase price.
If you are renting make sure you have a formal contract agreed by your Advocate or aide which details the maximum rent and period, and who is responsible for which repairs and taxes, or you may end up having to pay for the lot. Also ensure that any deposit is held by a third party agent in trust to avoid forfeiture of the deposit if the landlord refuses to return it. This is a common practice in the TRNC and the cost of taking this type of case to court means there is no effective remedy against unlawful retention of the deposit.
WHAT TO DO IF YOU ONLY HAVE A SIGNED CONTRACT
Following the enactment of the “Real Estate Acquisition Law for Foreign Nationals” on 20.05.2024, you will need to go through the following steps.
Next steps after signing the contract
- The contract must be registered with the Land Registry and Tax Office by November 20, 2024
- During registration, a stamp duty of 0.5% must be paid
- For contracts that are not registered within 21 days of signing, the stamp duty will be 1.5%
Submit an application for purchase permission to the Council of Ministers
- Pay the cadastral fee (6%) after obtaining purchase permission for title transfer
Frequently Asked Questions
What is a title deed, and why is it needed?
The title deed (from English Title Deed) or kochan (from Turkish Tasinmaz Mal Koçani) is a document issued by the Land Registry that confirms property ownership rights.
In what order are property purchase taxes paid?
First, the stamp duty and cadastral fee, then VAT, followed by the title transfer fee. For more details, see our guide on property purchase taxes
For further information go to https://cyprus-faq.com/en/north
Tax On Renting A Property Last Updated 17 Nov 2024
If you are renting your property in North Cyprus, you are obligated to pay taxes.
Any rental contract must be registered with the tax office. Registration incurs a fee of 350 Lira and is conducted directly at the tax office of your respective district.
The tax rate for any rental income is from 10% to 13% subject to the currency shown in the rental contract. When making payment at the tax office, you will also be required to complete the V.D.91 form, which will be provided on-site.
According to the tax office currently the tax must be paid by the 15th of the subsequent month after the contract is signed. Alternatively, for the entire rental period, payment can be made immediately upon contract registration.
***But from the 1st January 2025 onwards, all rental payments for either business or residential premises must be paid via a bank (this includes paying cash into a bank, a cheque, EFT, by card, credit card or through internet banking. ***
You must notify the tax office if any rental contract is terminated before its full term. Otherwise, any unpaid tax will continue to accrue. In addition penalties will be imposed for non-payment.
Copies of both the
1) A Declaration of Rental Income Landlords Details
and or a
2) A VD 91 Form to be completed when making a Tax payment
are available from your local tax office.
