Northern Cyprus is becoming an increasingly popular destination among investors and migrants. When deciding to buy property in Turkey in this region, you need to know what steps of a sale and purchase transaction you will have to go through.
Content:
- Choosing a residential property
- Sales contract
- Permission to purchase
- Deposit
- Registering the contract with the Land Registry
- Final settlement
- Property handover
- Buying property in Northern Cyprus online
- Transaction safety
- Property in Northern Cyprus
Choosing a residential property
Oftentimes, you get your first look at a property remotely. To do this, the buyer reviews the plans of a residential complex, photos and videos of units. If they wish and have the opportunity to visit the country, then the future owner of the Cypriot property goes on a familiarisation tour and inspects the units they selected online on the spot.
When choosing an apartment or house in Northern Cyprus, you need to check:
- whether the seller has a title deed, which proves real estate ownership, and you need to make sure that the property is registered in the name of the seller;
- whether there are any encumbrances that may cause problems for the buyer in the future, which can be checked in the real estate registry of Northern Cyprus;
- distance to military installations, as a title deed will only be issued to a foreign buyer if the property is located at least 500 metres from military installations.
Once you have made your final choice, the negotiation process begins, during which all the terms of the transaction are agreed upon.
Sales contract
Oral agreements must be secured in a written contract. To do this, the lawyer asks the seller for all the necessary documents, on the basis of which a contract for the sale of a residential property is drawn up.
The sales contract is one of the most important elements when purchasing a property. It protects the interests of both the seller and the buyer. The contract specifies the conditions for the purchase and transfer of the property and other details: the cost of a villa or apartment in Northern Cyprus, the amount of payments, a full description of the residential property, the rights and obligations of the parties, the terms of the transaction, guarantees, conditions for terminating the contract, as well as the buyer’s and seller’s passport details.
The contract is made in Turkish or, if necessary, in dual-language format—with the Turkish version being the prevailing one. The contract is signed once it is agreed and approved by both parties.
If the buyer plans to be outside of Northern Cyprus during the execution of the transaction, then it is necessary to issue a power of attorney for a local lawyer in advance so they can sign documents on behalf of the buyer.
Permission to purchase
Foreign nationals planning to buy a property in the country must request permission to purchase from the TRNC Council of Ministers. To do this, you must submit a package of documents to the Ministry of Interior, which includes:
- an application (you can write it at the Ministry office using a template);
- a passport copy;
- a completed information form, which you will receive from the Ministry’s employees;
- a site plan;
- a title deed copy;
- a police clearance certificate. You need to receive it in your country. The certificate must be notarized and then translated into Turkish;
- a copy of the property sales contract.
Once the permission is granted, the buyer must pay the stamp duty. The rate is 0.5% of the value of the property specified in the contract. The stamp duty must be paid before the registration of the contract with the Land Registry.
Deposit
At the next step, the buyer pays a deposit, after which the seller must withdraw the residential property from sale. The size of the deposit depends on the agreement between the seller and the buyer, but on average, it is from USD1,250 to USD6,250. Some developers sign a contract after a deposit is paid, while others only do so after receiving a down payment, which is usually at least 30% of the property value.
The money can be paid by bank transfer, but in no case should you transfer funds to a third party even if it is a lawyer who represents the buyer’s interests. It is safer to transfer money to the seller’s bank account yourself.
The buyer needs to understand that it usually takes no more than one month from the time of booking, which automatically occurs immediately after making a deposit, until the full payment.
Registering the contract with the Land Registry
Only a registered contract has legal force. If necessary, the document will be able to protect the buyer from the sale of the property to another individual or other illegal actions on the part of the seller. That is why the necessary step in purchasing property in Northern Cyprus after signing the contract is lodging the contract with the Land Registry. By law, the contract must be registered within three weeks from the date of its signing. The property is registered in the name of the buyer by the lawyer handling the transaction.
From January 2023, the transfer tax for overseas buyers is 12% of the price of an apartment or villa.
Final settlement
After registering the contract with the Land Registry, the buyer must pay the seller in full, paying them the rest of the property’s cost.
Property handover
The property can be accepted by a trustee. Most often, this is done by the same lawyer who handles the transaction. When accepting the property, the buyer or their trustee inspects it for possible flaws: whether there is crumbling plaster, a leaking roof or pipes, and so on. If everything is in order, then the buyer’s side signs the property acceptance certificate. If there are flaws that the buyer does not want to put up with, then the seller makes repairs, after which the house or apartment is re-accepted.
After receiving the keys to the purchased property, the new owner pays VAT of 5% of the value specified in the contract.
Buying property in Northern Cyprus online
A remote transaction involves the same steps as an offline property purchase. The only difference is that when purchasing remotely, the buyer obtains a power of attorney for a third party who represents their interests. This third party may be a professional who handles the legal side of the transaction.
Transaction safety
Rules and laws regarding the sale and purchase of real estate are there to protect and ensure the rights of the seller and the buyer. Attempts to independently reach an agreement and register ownership carry significant risks. It is recommended not to skimp on hiring a lawyer who will fully accompany the transaction and ensure its safety.
Property in Northern Cyprus
Let’s look at some examples of property prices in the Turkish Republic of Northern Cyprus. The following houses and apartments are currently for sale there:
- A 49 m2 studio apartment in Famagusta costs USD110,000.
- A 90 m2 apartment in Gaziveren is on sale for USD180,000.
- A 200 m2 villa in Alsancak can be purchased for USD370,000.
- A 410 m2 house is on sale for USD1.36 million.
- A 232 m2 villa in Bahçeli costs USD1.75 million.