We continue to explain the nuances of buying property in North Cyprus, which remains an unrecognized republic and is causing concern among potential buyers.
For the beginning, Northern Cyprus: growing popularity, questions and answers.
Here is a new series of "Questions and Answers" from the most frequently asked questions to the editorial team.
- If i buy property in the turkish republic of Northern Cyprus (TRNC), what are my rights to the property and to live there?
- What does a residence permit offer?
- Is the residence permit of Northern Cyprus valid in the republic of turkey and vice versa?
- Can one get citizenship in the TRNC?
- How many housing units can one person buy?
- What are the advantages of living in North Cyprus?
- How is a residence permit issued when buying a single property for several people or moving with a family?
- Who does the property pass to when the owner dies - a relative, the developer, or the state?
- What are the taxes and possible loss of payments?
If I buy property in the Turkish Republic of Northern Cyprus (TRNC), what are my rights to the property and to live there?
For the smallest details, you can consult specialists, but in short, "...do not worry about giving away land/apartments acquired in an unrecognized territory:" the European Court of Human Rights has not accepted claims regarding anyone's claims "against" since 2006.
In general, the mechanism is very similar to that in Turkey: after purchasing a residential property, the new owner receives a document confirming the right of ownership (TAPU). If the property is still under construction, the buyer's rights are defined by the sale and purchase agreement, which can be registered at the Land Registry Office: this is the initial ownership document until the main document is obtained (when the property is completed). If someone is very concerned, they can go even further and register a piece of land (!) under their house.
As for the status of the buyer: the owner of the property in North Cyprus receives a residence permit which allows him to enter and leave the TRNC freely, to stay in the Republic as long as he wants without additional documents (while tourists have 30 days, and in some cases, by agreement, 60 days with possible extension, but it involves additional hassle). However, you cannot stay in the TRNC for too long with a residence permit; it can be revoked.
Free health care, free education, and all the other benefits of civilization available in Northern Cyprus. However, you cannot vote or run for government positions because you are not a citizen.
No, the documents are not interchangeable. At least for now, although there are whispers about such a possibility in the future, it is currently unofficial information.
Yes, after 7 years of residence in North Cyprus, and it must be on a work visa (!), with the condition of not leaving the island for more than a few dozen days - the conditions are even more lenient in Turkey. In this case, the residence permit gradually turns into a permanent residence permit, which does not need to be constantly renewed.
In addition, permanent residency can be obtained through real estate investment starting at 2.5 million pounds sterling. As for citizenship, it is not the easiest process: you must pass a language test, a history test, and so on. So, the question is: why do you need it? Unless you have decided to stay here forever.
Here the situation is different from Turkey: now, a foreigner can only buy one property in the TRNC. However, there is a loophole: if the property is registered through a trust fund, then the number is unlimited. This is especially important if you want to buy several apartments in a complex with hotel infrastructure on the first line for rental purposes, and your relatives and friends to whom you can confidently transfer the purchased property are already exhausted. In addition, by using a trust fund, you can significantly save on the 12% property tax, which is an additional bonus. This is very advantageous if you are buying multiple properties for passive investment, quick resale, or anything else.
We could go on and on about this, but let's stick to the basics.
- A beautiful and incredibly safe country, just like South Cyprus. Almost an absolute sense of tranquility, which is very tempting in the current global situation. It is also developing rapidly: we have already talked about electrification, the arrival of 4.5G internet, a new airport and more.
- A warm climate, more than three hundred days of sunshine a year. Considering this, home repairs are much less frequent.
- Low property taxes, almost comical: 3 Turkish liras ($0.1 at the current exchange rate) per 1 square meter.
- The "unrecognized" status of the republic is also advantageous: the TRNC currently has no diplomatic relations with any state other than Turkey. This means: a) European and other Western sanctions simply do not reach here, b) "What happens in Vegas stays in Vegas": no one cares where you got the money to buy real estate. This rule also works in the opposite direction: no one in your country knows how much property you have in Northern Cyprus, accounts in banks, amounts in these accounts, etc. Accordingly, there is no "persecution of real estate purchased in another country."
How is a residence permit issued when buying a single property for several people or moving with a family?
Again, there are differences with Turkey. In terms of family status, it's simpler: all close relatives automatically receive a residence permit for any property - this includes a spouse, parents, and children under 18. If the children are adults or if someone from distant relatives or acquaintances is included in the TAPU, there is a certain gradation in terms of format. For example, a studio (1+0) grants a residence permit to one person, a one-room apartment (1+1) to two people, and so on.
Property documents in the TRNC are usually handled by a lawyer at the time of purchase, so it would be very helpful to draw up a will immediately (often suggested by lawyers themselves). In the will you can name your preferred candidate. By the way, experienced developers and estate agents strongly recommend that such a will be drawn up, even if the buyer is very young: life is unpredictable. If there is no will, i.e., the issue is not legally settled, the priority in terms of inheritance goes to the children (first line of heirs). The second line of heirs is the spouse.
Usually, the property goes to the state only if there is no will and the sale contract is not registered with the relevant authorities: in other words, the buyer has shown unimaginable negligence. By the way, it's negligence, not greed: making a will now would cost about 300 pounds sterling, which is peanuts considering property prices.
Rent: if the lease mentions payments in Turkish lira, it's an 8% tax; if in a foreign currency, it's 13%.
For the resale of real estate, it is 2.8% of the capital gain. However, this can be circumvented by formally stipulating in the contract the same price at which the seller bought the property. Then "no gain - no tax." By the way, this will help the new owner in paying the annual property tax - it is paid based on the value. This means that if you actually paid more (by paying the difference in cash or by regular bank transfer), you pay taxes on the old price. Especially since in the TRNC, unlike in Turkey, there is no mandatory confirmation of the cadastral value, which is now being closely monitored in Turkey.
By the way, profitability is often agreed in British pounds sterling, not Turkish lira (remember, North Cyprus is a former British colony, and significant transactions and property prices are denominated in pounds sterling). Cross rates are easily calculated (pound, dollar, euro); all these currencies are accepted. Moreover, there is no mandatory conversion to Turkish lira, as is the case in Turkey, so you do not lose part of the amount on this conversion when making the same purchase.
More articles about buying a housing, starting a business, etc. in North Cyprus on Turk Estate:
- Northern Cyprus: A new star in the investment sky
- Real estate investment in Northern Cyprus: Why you should choose this destination
- Legal services when buying property in Northern Cyprus
- Advantages of investing in real estate in Northern Cyprus
- Expenses when buying property in Northern Cyprus
- Opening a company in Northern Cyprus: Basic requirements and registration procedure