Forbes has highlighted Northern Cyprus as a premier real estate investment destination in the eastern Mediterranean, lauding its unique features and promising investment landscape. Renowned for its scenic beauty, North Cyprus attracts global investors seeking holiday homes or lucrative investment properties, as endorsed by Forbes. Beyond economic advantages, the region offers a high quality of life with a pleasant climate, stunning landscapes, and rich cultural heritage. Particularly in the untouched Karpaz region, known for its nature, many visitors are drawn to the island. Cyprus, known for its extensive ecosystem, hosts 422 bird species, and its beaches serve as crucial nesting grounds for future generations of sea turtles

To ensure a tailored property search, provide Monolith Estate with detailed preferences before arriving in Northern Cyprus, allowing us to eliminate unsuitable options. Consider factors like property usage, proximity to airports, schools, rental potential, and long-term investment. Thorough research ensures a stress-free acquisition of your dream home. For prioritising unobstructed views, explore beachfront or elevated properties, and inquire about potential future developments. Establish a budget, including fifteen to twenty percent for additional fees such as Transfer of Title, Stamp Duty, and VAT.

Choosing Monolith Estate ensures peace of mind. We are proud members of the Turkish Republic of Northern Cyprus Estate Agents Union with Registration No: 065. Committed to making your North Cyprus dream home a reality.

All property titles in the TRNC are categorised as TRNC freehold. It is recommended to hire a local solicitor to handle your acquisition. They will verify the legitimacy of your desired freehold and ensure it is free from any outstanding debts.

There are four types of title deeds in total:

Pre. 1974 Foreign Title.

This applies to land or immovable property that was owned by a foreign national before 1974.

Pre. 1974 Turkish Title.

As the name implies, this applies to land or immovable property owned by a Turkish Cypriot before 1974.

TMD Title.

This applies to land given by the government to Turkish and Turkish Cypriot people after 1974 for military service and to encourage settlers. This was to promote and encourage economic progression.

Exchange Title. (Esdeger)

This applies to land or property awarded by the government to a Turkish Cypriot in exchange for land or property they were forced to leave behind when fleeing the south in 1974.

Hiring a lawyer

Monolith Estate, as North Cyprus Estate Agents, can suggest reputable attorneys in North Cyprus proficient in your language, and importantly, they do not have ties to the seller or estate agent. They exclusively work on your behalf. Your chosen lawyer will furnish legal assurances, confirming that the property you are purchasing in North Cyprus is free from encumbrances, charges, liens, or debt, and all local taxes and community charges are up to date. Lawyers usually cost from £1500 to £2000.

Reservation deposit

Upon reaching a verbal understanding between involved parties, a reservation deposit becomes necessary. Following its payment, Monolith Estate will document the offer in writing, providing formal acknowledgment to the buyer, seller, and their respective legal representatives. This deposit ensures the property is withdrawn from the market and set aside exclusively for you at the prearranged and unchanging price. Typically, reservation deposits are non-refundable unless explicitly contingent on specific conditions.

Exchange of contracts

Following the formal acceptance of the offer, the subsequent phase involves the exchange of a private contract of sale, typically occurring within two weeks. Your attorney will have conducted essential property searches, and a draft sales contract will be formulated, encompassing all agreed-upon terms of the offer and sale. The contract will explicitly outline payment deadlines, with the initial stage payment for off-plan properties usually constituting around 30% of the total purchase price. Subsequent payments will be contingent upon the completion of specific construction milestones. Additionally, Monolith Estate is able to finish the property purchase procedure in 3-5 working days.

VAT

VAT (KDV) must be paid to either the Tax Office or the Vendor, provided the Vendor is classified as a professional entity. Since all construction companies are considered professional, VAT is applicable in their case. When acquiring new housing from a developer, VAT must always be paid, and it amounts to 5% of the property’s value. If a client chooses Resale Property, VAT is usually already included; however, if not, it becomes a subject for discussion or potential discount. VAT is typically settled along with the final payment for the property, either according to the payment plan specified in the contract or upon the transfer of title deeds.

Purchaser’s Stamp Duty and Transfer fee

The payment of stamp duty is directed to the Tax Office, with the current rate set at 0.5% of the contract price if settled within 21 days from the signing date. If paid after this period, the rate increases to 1.5%.

The transfer fee is due to the North Cyprus District Lands Office upon the transfer of title. Presently, the fee is calculated at 12% of the valuation determined by the District Land Office. Six percent out of twelve is paid by the buyer simultaneously with the stamp duty (0.5%) at the time of contract registration, and the remaining 6 percent at the time of title transfer. The title transfer will only proceed after obtaining the purchase permit.

Vendor’s Capital Gains Tax

The Vendor is responsible for remitting Capital Gains Tax to the Tax Office, presently set at 3.5% if the vendor is a private homeowner, not affiliated with development or construction. Additionally, each individual has a one-time opportunity to sell a property without incurring any taxes. If the Vendor is categorised as a professional, the Capital Gains Tax rate increases to 6.25%.

In the initial meeting, we will gather information about the North Cyprus property you’ve selected and any informal agreements with the vendor regarding price, payment schedule, and included items. Additionally, there may be a discussion about granting power of attorney to the lawyer, enabling them to act on your behalf for document signing in your absence from Northern Cyprus. This stage involves preparing a Contract of Northern Cyprus Property Sale to safeguard your interests. The contract includes crucial terms such as plot number, size, price, payment schedule, and completion date, incorporating penalty clauses for late completion. Attached to the contract are floor plans, specifications, and the selling agent’s advertising material to ensure the vendor complies with construction and sale terms.

Land registry searches will be conducted to confirm the vendor’s registered freehold ownership, absence of mortgages/charges, injunctions, or other encumbrances. For off-plan or new properties, the lawyer will verify the obtained building permission. The contract is sent to both parties for review, and upon mutual satisfaction, it is signed. Stamp duty payment is required, with a 0.5% rate within 21 days of the contract date, increasing to 1.5% thereafter. Paying upfront is recommended to avoid further complications.

The ‘permission to buy’ process follows, typically taking about 18 months. It’s essential to note that this process doesn’t hinder your ability to move into, lease, or sell the property. Since 2008, signed and stamped sales contracts are lodged at the District Lands Office, providing 100% protection for the purchaser until title deeds are registered in their name.

(Its obligatory for all foreigners to have a police clearence report before a purchase can be made. Usually, this process takes a couple of weeks, therefore its best that you are prepared before your arrival on the island)

While handling your purchase permit application, the Council of Ministers will conduct verifications with the military and immigration authorities. If these checks yield positive results, meaning the property does not overlook a military installation, and you are not a fugitive with a criminal record, the permission will be granted. In the rare instance of your application being declined, you have the option to designate another individual to acquire the property on your behalf, holding it in trust for you.

Once your purchase permission is approved, your lawyer will complete the necessary North Cyprus Land Registry Valuation Forms, calculate and inform you of the applicable taxes, and ultimately transfer the property into your name(s). The tax amounts are determined based on the Northern Cyprus Land Registry Valuation and are presently assessed at the following rates:

Land Registry Transfer Fee – 12%

Value Added Tax (VAT) at a rate of 5% is applied, but it is only payable if the vendor is classified as a professional entity, such as a developer, construction company, or a private individual who has sold more than three properties. It’s important to note that unless you are acquiring a property already registered in a foreign national’s name, the likelihood of paying VAT is minimized.

Stamp Duty is set at 0.5%, with the rate increasing to 1.5% if not settled within 21 days from the date of your Property Sales Contract.

These taxes will be settled, and the title deeds will be officially registered in your name. If you have granted power of attorney to your lawyer, all these processes can be managed without requiring your presence in the Turkish Republic of Northern Cyprus (TRNC). Your lawyer or agent will then collect and securely hold the title deeds until you are prepared to retrieve them.

Currently, Turkish Republic of Northern Cyprus (TRNC) nationals have the option to secure loans for property purchases, typically with a repayment period extending up to a maximum of 10 years.

In recent times, certain banks have extended property loans to foreigners holding title deeds in their name. This arrangement resembles more of an equity release rather than a conventional mortgage.

For those seeking financial assistance to acquire a property, exploring new properties is recommended, as many developers offer flexible payment plans. Initial payments generally range from 20% to 80%, with repayment terms spanning up to a maximum of 10 years.

While some private vendors might agree to staggered payments over a short duration, this is an uncommon occurrence. Therefore, it is always recommended to have your funding secured in advance.