Northern Cyprus Property SearchFurther Information
Breaking NewsRelated Links |
Buyer's Guide Buying a property in Northern Cyprus whether a villa or apartment, new build or just land is a major investment so good advice is essential. Here is a brief yet informative guide to how the buying process works. Types of Title The issue of title to immovable property in Northern Cyprus is a complex one and arises due to the nature of the political situation in Northern Cyprus. As a result of the troubles between the Turkish Cypriots and the Greek Cypriots which occurred mainly in the 1960s and culminated in the Turkish military intervention of 1974, property on both sides of the island was left or abandoned by its original owners. Turkish Title Deeds Pre-1974 Property which was not owned or abandoned by a Greek Cypriot during this period and which was owned prior to the military intervention in 1974 by a Turkish Cypriot is known as Turkish Title Pre-1974 or Pre-1974 Title. These deeds are internationally recognised. In order for you to take title you require the approval of the council of ministers. This procedure takes approximately 18 months. Foreign Title Deeds Pre-1974 Property which was not owned or abandoned by a Greek Cypriot during this period and which was owned prior to the military intervention in 1974 by a British or foreign person is known as Foreign Title or Pre-1974 Title. These title deeds are internationally recognised. In order for you to take title you require the approval of the council of ministers. This procedure takes approximately 18 months. TRNC-Es-Deger Title (Exchange Title Land) This is land or property originally owned by a Greek Cypriot prior to 1974, with new title deeds issued by the Turkish Republic of Northern Cyprus government for compensation of land or property owned by Turkish Cypriots given up in the South of Cyprus.Those Turkish cypriots who had left land or property in the south were given points calculated on the value of the land or property which they had left behind. These points were then used by the Turkish Cypriot to acquire freehold title to a piece of abandoned immovable property which should, theoretically, be of equivalent value to the land or property they left behind in the south. Immovable property to which title was aquired in this way by a Turkish Cypriot is known as Es-Deger Title Deed. Es-deger Translates as Exchange. These title deeds are recognised under the United Nations "Annan Plan" and are safe to purchase.In order for you to take title you require the approval of the council of ministers.This procedure takes approximately 18 months. TRNC-TMD Title Deeds. This is land or property originally owned by a Greek Cypriot prior to 1974, with new title deeds issued by the Turkish Republic of Northern Cyprus government.The government issued 'points' to other people, not for property which was left behind in the south, but as a reward for military service. These points were then used to acquire freehold title to a piece of abandoned immovable property. Immovable property to which title was acquired in this way is known as TMD Title Deeds. Also after the intervention of Turkey in 1974 there was a shortage of people to farm the land, so the government offered people an incentive. For those who farmed the land for ten years got to keep the lands. Immovable property to which title was acquired in this way is also known as TMD Title Deeds. These title deeds are recognised under the United Nations "Annan Plan" and are safe to purchase providing Significant Improvement is made to the property. In order to reach "Significant Improvement" you must invest 100% of the value of the land in its original state plus Interest/Inflation. In order for you to take title you require the approval of the council of ministers. This procedure takes approximately 18 months. Guide To Purchasing Property In The Turkish Republic Of Northern Cyprus Under the laws of the Turkish Republic of Northern Cyprus (TRNC) non-TRNC citizens are entitled to take title to only one property up to a maximum area of 1 donum per household. 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 1 donum in area, we can give you advice on using trustees or setting up a TRNC company to hold the title to the property for you. The conveyancing procedure followed by Naomi Mehmet & Partners 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 price, payment schedule and included items. 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. We will then prepare a Contract of Sale to safeguard your interests. The Contract of Sale will include all important terms such as plot number, plot size, price, payment schedule, and completion date with penalty clauses for late completion and all floor plans and specification 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. You will be given the option to pay the stamp duty at this point. Under new regulations, the Tax Office are requesting to see a copy of the contract of sale prior to transfer of title with all stamp duty paid. Stamp duty is payable at 0.5% of the contact price if paid within 1 month of the contact date. If it is not paid within this time, it increases until 1.5% if paid after 6 months. You will have the option to pay upfront or pay on transfer of title and pay a higher rate. We will conduct the necessary land registry searches on your behalf to ensure that the vendor is the registered freehold owner of the land and that there are no mortgages / charges, injunctions or other encumbrances on the property. We will also check that the building permission for the construction has been obtained. We will then make the application to the Council of Ministers for your permission to purchase. The permission process can take a long time to complete, the current estimation is around two years. However, this will not prevent you from moving into the property or leasing the property or possibly even selling the property- as standard practice, we always try to negotiate with the vendor the insertion of a clause into the contract allowing you to sell the property before taking title to the property. We can also provide advice on other ways to secure your interest until you receive the title deeds, for example by registering a charge over the property. 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. In the unlikely event that your application for permission is refused, you will be able to nominate any other person to take title to the property on your behalf and hold the property on trust for you. We can assist you with the drafting of the necessary trust deed. Once your purchase permission has been granted, we will notify you and then fill out all of the necessary land registry valuation forms for the valuation of the property. It is usually at this point that taxes will be payable. The taxes are calculated based on the land registry valuation and are currently at the following rates:
The taxes will be paid and the title deeds will be registered in your name. If you have left us with power of attorney, all of this can be dealt with without you being required to travel to the TRNC. We will then collect and keep the title deeds for you until you are ready to collect them. BUYING PROPERTY IN THE TRNC-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 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 permissions 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. 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. Can I sell my property before I obtain my purchase permission? This depends on the terms of your contract of sale. As standard practice at Naomi Mehmet & Partners, 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 also has taxes advantages as taxes are only payable when a transfer of title takes place. What taxes are payable on the purchase and when are these payable? Taxes 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 rate of tax are as follows:
There is also a new regulation governing stamp duty on property purchases. The Tax Office is now requiring the contract of sale to be presented prior to transfer for title and for stamp duty to be paid. Stamp duty is payable at 0.5% of the contract price if paid within 1 month of the contract date. If it is not paid within this time, it increases until after 6 months, it becomes 1.5% of the contract price. For more detailed information on taxes, please ask us for a copy of our guide to the taxes payable on property transactions.
This guide has been prepared by Advocate Naomi Mehmet of Naomi Mehmet & Partners.
Email: naomi@nmplegal.com
Hillcrest Property Consultants |
|
About Us |
Contact Us |
Buyer's Guide |
Northern Cyprus |
News |
Tourism |
History |
Places of Interest |
Maps |
|