North Cyprus Buying Process
1. Once you have thoroughly researched the market place in North Cyprus, you will be ready to make your decision what to buy.
2. The next step is to take advice from a lawyer for all matters from conveyancing to making a will. It is therefore recommended to appoint a solicitor and leave a Power of Attorney so that your solicitor can represent your interests in your property purchase while you are away. This means the lawyer will be able to file documents to the necessary offices on your behalf, sign the contract of sale and other necessary documents upon your approval, pay all the required taxes and fees on your behalf and so on.
We do not favour any particular law firm but we do have a list of those we have used previously and have been impressed by their services. Please ask if you require a copy.
3. After terms are agreed on price, make sure you have secured a written list of any extras and the specifications as well as the agreed payment plan. We will hold your hand to agree maximum discount and we will ensure that the contract and specifications thoroughly cover the full terms and any extras agreed with a vendor.
4. You will normally reserve a property by way of the payment of a non-returnable reservation deposit in the order £1,000. This amount is included in the property price.
5. Your lawyer in North Cyprus will check the deeds and make all searches on your behalf.
6. Your lawyer will also make an application to the Council of Ministers for the purchase permit to be handled on your property purchase whilst you are out of the country. In order to apply for the purchase permit, you would need to provide a police record from the country of your citizenship (in English) (normally applied for in the local police department). You will have full possession of your property whilst your purchase permit is being processed.
7. Your lawyer will then draw or check the contract of sale to be signed by you and the vendor.
8. Normally from the date of your reservation deposit, you will be given around 20 days to approve and sign the contract of sale (via your solicitor) when a more substantial deposit will have to be paid as per your contract, normally around 25 – 30% of the purchase price (or as per the agreement), unless it is a re-sale or existing property when full amount is generally required for payment. We will always negotiate on your behalf to obtain the most favourable payment terms.
9. The contract of sale will stipulate the payment plan for your property and will establish a completion date. Once the contract is signed and the first instalment is paid, you solicitor will register your contract of sale at the Land Registry office (TAPU) as a record of your legal interest in the property. At this time you will pay stamp duty at 0.5 % of the contract price.
10. The time of the property key handover and possession will depend on the agreement reached between the parties, stage of property construction and your timely payment for the property as per the contract of sale. Some of the properties are offered with a payment plan interest free or with a mortgage plan, therefore one should pay attention to what the minimal amount is for the key handover or starting finishing works and preparing the property for the handover (in case the property needs time to be prepared or have interiors fitted).
11. On the day of completion you will be required to settle the remainder of the funds for your property purchase in North Cyprus (as per the contract of sale), together with payment of Title Transfer Tax, currently at 6%, however there is a right for the first time buyers to reduce the Title Transfer Tax to 3%.
When deciding to buy a property in North Cyprus, you must allow for all your Purchase costs.
Such official taxes and fees are as follows:
– Stamp Duty – 0.5% of the contract amount (as described above) is payable at the time of the contract registration ;
– VAT (KDV) – 5 % of the contract price is payable to the vendor when you take occupation of your property (key hand over) or at the time of the title deed transfer (as per the agreement). This tax is only payable on new properties as re-sale properties normally include this tax in their selling price.
– Title Transfer Tax – 3% of the contract price (as described above) is payable at Title deed transfer to the name of the purchaser (within approximately 3 to 18 months after filing application for the permission). This delay is due to the time taken for your purchase application to be processed. At the same you can have full possession of your property and fully enjoy it yourself or rent it out. Once your application is granted then title can be transferred and at this time you will be asked to pay the tax to the Tax office.
Various developments / properties also have the following additional single payments:
– Transformer contribution / Infrastructure fee – for the connection of your property to the communal system of infrastructure on site – approximately £500 – £1,500 GBP depending on the project, property and infrastructure
– Electric and water meters and connections from municipality – about £500 GBP
Solicitor’s Fees are around £1,100 – £1,400 GBP depending on the total package of services offered.