Northern Cyprus Estate Agents Busy Bees Bogaz North Cyprus Villas, Apartments and Land For Sale

North Cyprus Property Costs

 
Cost of purchasing property in North Cyprus
The taxes are calculated based on the contract price and are currently at the following rates:

Tax Payable at the time of signing of the contract, by the buyer
  • Stamp duty 0.5% of contract price.

Tax Payable by the buyer at the time the deeds are transferred into the buyers’ name.
A Land Registry transfer fee of 6% of the contract price. However, every buyer 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 therefore you will only pay 3% of the contract price.

In addition 1% of the transfer fee, not the contract price, is payable to the local council.

If the North Cyprus property vendor is a professional seller (has sold more than 3 properties in any one year) then VAT at 5%.(known as KDV) must be paid on the contract price. The contract should state whether the vendor or the purchaser should pay the VAT, normally it is the purchaser. This is paid on transfer of deeds, but there is at present a suggestion that this may be changed to handover of keys.

The sales process will come to an end when all of the above taxes are paid and the title deeds are registered in the buyer’s name. Those who choose apartments, or villas on large complexes, may find that they receive a Shared Title Deed with their property designated to them on the title deed. This in no way diminishes the value of your title deed and in no way causes you any problems should you one day decide to sell.

So if you buy a property for £100,000 you would pay the following in tax:

  0.5% stamp duty on signing of contract £500
 
  On transfer of deeds into your name:

 5% VAT £5000
 3% Transfer tax £3000
  % council tax of transfer fee £30

Investors get around these taxes by not getting the deeds into their name and just selling on their contracts.
 
There is an annual property tax, equivalent to council tax, depending on size of property, about £100 to £150 per annum.

Fees payable by the Vendor
You should also be aware that the vendor has to pay a 6.25% tax on hand over of deeds, this is sometimes called Capital Gains Tax or Stoppage Tax. This assumes that the vendor is a professional seller.

A question that is often asked is, how much tax will I have to pay if I decided to sell my property? The answer to this is assuming you are not a professional seller then it is 3.5% of the sale price. However, if it is your first sale then you are exempt. So to put it another way, there is no tax to pay at all if you are a private seller and it is your first sale.

ADVICE if you are in intending to sell the property you bought in North Cyprus then by not putting the deeds into your name you considerably reduce your tax liability. You will of course still have security because you will have a contract registered in your name against the deeds of the property.”

  The process of buying property in North Cyprus can be summarised as follows:

  • Find a property that you wish to buy in North Cyprus and agree the sale
  • Instruct a solicitor of your choice in Northern Cyprus
  • Put a deposit on (usually £1000) to reserve your property in Northern Cyprus
  • Sign a power of attorney
  • Agree the exact details of the contract (usually by e-mail over the next few weeks),
  • Sign the contract (your solicitor in North Cyprus can do this on your behalf if you given him/her a power of attorney)
  • Register contract and make agreed payments to vendor
  • Apply for permission to buy, one of the jobs of your solicitor
  • Get deeds into you name once you permission to buy has been granted.

All transaction relate to property in North Cyprus take place using pounds sterling. For more information on Power of Attorney, Deposits, getting the contract stamped and registering the contract please click here

Power of Attorney
If you want to buy a property in North Cyprus you should sign a power of attorney using a solicitor that has been recommended to you and that you are happy with. The power of attorney will allow you to have your contract signed on your behalf by the solicitor or by whoever you have used as your power of attorney even if you are not in North Cyprus. The solicitors do not charge for producing a power of attorney (it takes about 15 minutes) although you signatures have to be authenticated by a notary and this costs about £20.

Deposit
Once you decide on which North Cyprus property you would like to purchase, you will have to pay the reservation fee to secure the property and have it removed from the market. Developers and builders allow you to reserve any property for a fee of £1000 to £2000. The deposit, which is normally non refundable, can be left with the Estate Agent, solicitor or developer/builder. By reserving a property in North Cyprus you will secure it for a period of time, around one month, which allows enough time for the sales contract to be drawn up, agreed and signed. Before signing you should make sure that you have reached an agreement with the developer/builder on the price and the costs of any extras that you may need and that you understand and are happy with the terms of your contract.

In most cases when the purchaser has found a suitable property, the purchaser returns home, the contract is then e-mailed or faxed to the purchaser to review and only once the purchaser has approved it will the solicitor proceed with signing it, in the purchaser’s absence and on their behalf. The purchaser will also receive a final signed copy for their records upon their next visit to Northern Cyprus, or the contract can be sent by courier if requested.

 Getting the contract stamped
All North Cyprus property contracts have to be stamped and stamp duty is payable at 0.5% of the contract value if paid within 1 month upon signing of the contract. If it is not paid within this time, it will increase to 1.5%. This is paid by the buyer. The contract has to be stamped before registration of a property contract in North Cyprus can take place.

 Registration of Contract
According to a new property law in North Cyprus that came into operation in January 2008, all Sale Agreements must be registered at the District Land Registry Office in Northern Cyprus (known locally as the “Tapu”) and the Estate Agent involved in the sale of the property is responsible to do this within 21 days. This has been a major step forward in offering security to the purchaser of any property in North Cyprus. Once a contract has been registered then the seller of the property cannot sell it or mortgage it to anyone else without the written consent of the buyer.

North Cyprus Property Tax
Property in North Cyprus is taxed as follows:

New build properties in North Cyprus are charged a VAT of 15% at the time of transfer of property title.
A purchase tax of 3% is levied upon the transfer of property title and the basis for this is the registration value of property.
Local council tax 1% of 3% is payable to Belediye (Local Council).
There is no Capital Gains Tax in North Cyprus on buyers of property.
If you are selling property for the first time then again you are exempt from Capital Gains Tax, as per Tax Laws of Northern Cyprus. According to the Capital Gains Tax, every individual or a household is exempt of Capital Gains Tax once in lifetime on the sale of one property or land provided it is less than one DONUM ( please refer to North Cyprus land sizes).
If you are not a first time seller of property; local or foreign, Capital Gains Tax in Northern Cyprus is applicable at the rate of 3.5% for property sales. But this tax is valid only for a maximum of 3 property sales per annum.
If you are a professional property vendor and makes sales of more than 3 properties the Capital Gains tax is 6.25% on every property after the first three sales.
No Capital Gains tax is applicable if you resell the property in North Cyprus without the title changing to your name; an example in this case can be Off plan property. But in such a case a stamp duty of 0.5% is levied and is payable within the first month.
For more information on title deeds please refer to North Cyprus title deeds