North Cyprus Buyer’s Guide

pic_office1

A few days spent visiting the area will give you a much better idea of what living in North Cyprus will be like when you have met the local people and experienced this way of life. The practicalities of moving here to live or to rent out your property and how that could be achieved, will all seem a lot clearer. You will have plenty of time to take in the different investment options and ask us any financial and legal questions that you may have.

Listed below is some information that will help you understand more about the buying process in North Cyprus and answers to some of the questions we are often asked.

Before you view a property

Before arriving in North Cyprus you will have been advised by our team to have at your disposal sufficient funds to cover the reservation deposit on a property. The minimum required is normally £1,000 – £3,000 which can be paid by cash or bank transfer. Most reservation deposits to Vendors are non–refundable so it’s important to have your finances in place before reserving a property.

Contracts will be drafted either by our recommended solicitor or your chosen solicitor and it is expected that your cleared funds are received within 14 days.

When a reservation deposit is lodged against the property, the sale price is fixed and the unit is taken off the market and reserved in the buyer’s name.

Choosing a property in North Cyprus

At C & T Construction & Estates we will try to match your requirements with your ideal property and will arrange viewings at your convenience. First decide what you want from your property and always ask if further development is planned for the area you are interested in:

It is best to establish a budget and remember to add 10% of the purchase price to cover fees associated with the buying process.

Negotiating the purchase

Once you have found the right property for you, the first step is to make a verbal offer. C & T Construction & Estates can proceed on your behalf. They can negotiate the purchase terms and price with the seller until a price is agreed. You may also choose to vary the completion dates or the terms of payment.

Appointing a lawyer

This is a good time to involve a lawyer to help in the negotiation ensuring that your offer meets all the legal criteria. C & T Construction can recommend reliable lawyers who their clients work with on a regular basis, are fluent in your language, do not represent the developer or agent and work solely for you. Lawyers will tell you in advance what their fee will be and this is currently about £1,000 – £1,250.

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 one donum (0.33 Acres) 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.

If you wish to take title to more than one property, or a property over one donum in area, we can give you advice on taking out multiple mortgages, using trustees or setting up a TRNC Company to hold the title to the property for you.

Formalising the offer

The Reservation Deposit

Once you have a verbal agreement we can help you formalize the terms of the offer in writing including a reservation or holding deposit until exchange of contracts. Paying this reservation deposit guarantees the property is taken off the market and is reserved for you at the agreed, fixed price.

This initial reservation deposit will be held in your appointed lawyer’s client account or directly with the developer. The reservation deposit is usually non–refundable, unless it is specifically agreed to be conditional upon certain factors happening e.g. viewing the property, if reserved unseen.

Exchange of private contracts

new_pic_banner

When your offer has been accepted the next step is to exchange private contracts of sale — usually within two weeks of the formal acceptance. The private contract of sale will reflect all the agreed terms of the offer and sale and set out the date for final completion.

The next step is usually for the buyer to pay a 30–50% deposit of the purchase price. The amount of the reservation deposit is subtracted accordingly from the purchase price.

Bank Accounts

One of the first things you need to do when you have decided to buy in North Cyprus is to open a North Cyprus bank account. Developers will usually require stage payments to be made through their HSBC bank account.

You need to note that banks charge a commission to receive funds from overseas, sometimes up to 0.5% of the money being transferred. We would be happy to assist you in setting up bank accounts and can recommend banks in the area.

Property Taxes

There are four main taxes involved in any property sale and purchase transaction generally paid on transfer of title:

Under new regulations, the Tax Office now requires a copy of the contract of sale to be presented to it prior to transfer of title.

Transfer Fee is 6% and is payable by the purchaser to the Land Registry Office. However, every person is given one opportunity to reduce this to 3%. If a purchaser elects to use this option on the purchase, he or she will only pay 3%. Once this option right has been used, the transfer fee payable on all future purchases by that person will be 6%. The Transfer Fee is paid as a percentage of the assessed value of the property which is carried out just before transfer of title takes place.

Stamp Duty is payable by the purchaser to the Tax Office. This is 0.5% of the contract price provided this is paid within 1 month of the date of the contract. If it is not paid within this time, the rate increases in stages until after 6 months it becomes 1.5%. Stamp Duty is based on either the assessed value or the contract value, whichever is the highest.

VAT (KDV) which is payable to the Tax Office or to the Vendor. For property transactions the VAT rate is 5% of either the assessed value or the sale price whichever is the highest.

Capital Gains Tax is payable by the vendor to the Tax Office and the rate will be 3.5%. Capital Gains Tax is based on either the assessed value or the contract value, whichever is the highest.

If you have any questions please feel to view our FAQ’s section or contact us at info@ctcestates.com