Frequently Asked Questions
How can Foreign Nationals Purchase Real Estate in Northern Cyprus?
Anyone, who is not a citizen of the TRNC, wishing to purchase real estate in Northern Cyprus, shall obtain a “Property Purchase Permit” from the TRNC Government. Foreign Nationals are entitled to purchase 1 (one) house or maximum 1 donum of land per person. Married couples are deemed as 1 person; however if their surnames are different, they may be entitled to purchase 2 real estates. A different procedure applies to foreign companies. Without obtaining the “Property Purchase Permit”, Foreign Nationals cannot complete the transfer proceedings at the Land Registry Office; therefore the contract of sale, which is certified by the Tax Department, will also be submitted to the Land Registry Office, and this will ensure the legalization of the ownership rights.
In addition, an undertaking in respect of the non-transferability of the possession or ownership rights pertaining to the sold property, by no means, to any third parties, will be registered with the Land Office by the seller.
As soon as the payment is made and the purchase permit is obtained, the title-deed of the property will be issued in the name of the buyer. Provided that the buyer and the seller fulfilled their liabilities stemming from their agreements, the seller transfers the ownership of the dwelling house in the name of the buyer, at the District Lands Office where the property is located.
The buyer is responsible for paying the “Title-deed Transfer Fee” of the purchased property. Title-deed Transfer Fee is paid to the Northern Cyprus Land Registry Office at the time of the transfer of the title-deed. Where the buyer is purchasing his/her first property, a discount rate of 3% of the sales price of the purchased property is paid as the transfer fee. This rate will be 6% for all persons who have used their discount right previously.
After the choice of the property to be purchased and the agreement on the price, a contract (agreement) of sale is signed between the buyer and the seller, through an advocate, which will contain information about the price, time, payment and delivery conditions, and particulars about the property. When the contract is signed by both parties, the sales will be realized.
After this stage, a “Stamp Duty” is paid to the Tax Department. According to the current law, the Postage Fee which is payable at the rate of 0.5% of the Contract Price, shall be paid within 21 days after the signing of the contract. In this way, the contract becomes legal financially.
For registering the Immovable Property in the name of a Foreign National, an application shall be made to the TRNC Council of Ministers, and purchase permit shall be obtained from the Council of Ministers.
Which documents are required while purchasing a real estate in TRNC?
Your passport is sufficient for starting the acquisition transactions.
Residing in the TRNC and Permits
In the TRNC, a residence period up to 3 months is allowed for, upon your request or at the discretion of the official authorities, without getting any permits.
Moreover, in the event that you own a property, you can obtain a Residence Permit upon application to the relevant authorities of the TRNC.
In the event that a company in the TRNC wishes to employ you, the respective company will apply to the relevant authorities and obtain a Work Permit on behalf of you. During the time covered by this permit, you can reside in the TRNC.
What are payable taxes upon purchase of a real estate in the TRNC?
0.5 %Stamp Duty on the Contract of Sale (paid by the buyer)
Immovable Property Transfer Fee 6 % (3% one-time only upon the first purchase)
5% V.A.T (Paid by the buyer; may vary depending on the professional status of the Seller. If the seller is not a professional, the Buyer will not pay 5% V.A.T)
Withholding Tax (Paid by the Seller)
Different taxes are applicable where the transfer is made by way of a donation (gift): Donation to a child from parents: 0.2%; donation from one spouse to the other: 0.4%; donation from a grandfather to a grandchild: 0.4% + withholding tax is paid to the Finance Department
What are the land measurement units in TRNC?
In TRNC, when buying and selling lands/ building plots measurement units such as donum, evlek and square feet (f2) are used in general. The corresponding area of 1 Donum in square meters (m2) differs also.
1 Donum = 4 Evleks = 14.400 square feet = 1.338 square meters
1 Evlek = 3600 square feet = 334,5 square meters
1 m2 = 10,76 square feet
What is the difference among the various title-deed types in Cyprus?
Legally, there is only one type of title-deed in the TRNC. These are called as TRNC title-deeds. However; in terms of the origins of the properties, title-deeds are assessed under three separate categories:
1- Properties with Turkish Title-Deeds: These are the properties which, prior to 20 July 1974, were owned by foreign citizens or Turkish Cypriots, who were not Greek Cypriots/Greeks. These title-deeds are deemed legal by both international states and Greek Cypriot Administration of South Cyprus.
2- Title-Deeds of Properties of Equal Value: These are the properties, which belonged to Greek Cypriots before 1974 but which were allocated to the Turkish Cypriot Migrants, who came from the South after 1974, in exchange of their properties abandoned in Southern Cyprus upon their Equivalent Points. According to the Annan Plan, these title-deeds can be valid under international laws, subject to various terms.
3- Title-Deeds of Allocated Properties: These are the properties which used to belong to Greek Cypriots before 1974 but after 1974 which were initially leased to third parties and subsequently issued title-deeds by the TRNC State.
How to become a Licensed Real Estate Broker?
The terms and conditions required for a real estate broker license according to the TRNC Ministry of Interior are as follows:
1- Being a TRNC citizen;
2- Must have turned 21;
3-Being at least a high-school graduate or holding an equivalent degree;
4- Not being sentenced to imprisonment for more than one year or not being convicted of bribery, theft, fraud, counterfeiting, corruption, defloration, fraudulent bankruptcy and similar infamous crimes;
5- Not being subject to a cheque ban within the last two years;
6- Having a document obtained from the Income and Tax Department proving that she/he does not have any tax debts; and
7- Not being married to or a first degree relative of an officer from the Land Registry and Surveys Department.
IMPORTANT NOTE: PLEASE ASK WHETHER YOUR REAL ESTATE BROKER IS LICENSED OR NOT. IT IS A CRIME TO BE AN UNLICENSED REAL ESTATE BROKER!
Establishing a Company in the TRNC
The procedure for establishing a Company in TRNC depends on the planned goal of the company. If the company’s goal is the immovable properties, the Company cannot be inspected by people who are not Cyprus citizens and the majority of the company’s shareholders and directors cannot be composed of foreign nationals.
Rules governing the purchase of immovable property by foreign nationals:
The quota is maximum one donum for each residence, and the requirements for obtaining a permit from the Council of Ministers are established. It applies equally to the companies which are inspected by foreigners. In addition, it must be highlighted that, provided that 51% of its shares are given to TRNC citizens, and that the majority of its Board of Members is not composed by foreign nationals, the Company may acquire more real-estates without making an application to the Council of Ministers for obtaining permit.
Other various companies may be composed of foreign nationals in their entirety, including its shareholders and directors.
In TRNC, companies may easily be established within one or two weeks. The documents which may be required are as follows:
1- Articles of Partnership and Contract document – These are prepared by your advocate in Turkish, and will cover the goals of your company.
2- Certificate of Incorporation MS 1,2,3 – These are also prepared by your advocate.
3- Photocopies of the passports of each shareholder who is a foreign national (The original of the passport shall be seen by the authorized bodies of the TRNC, if this is not possible, a copy of the passport shall be submitted to the TRNC Embassy in their countries)
4- For each director who is a foreign national, the copy of their passports is required as indicated above. At the same time, the directors shall obtain a certificate from the Ministry of Interior or Police Department in their own countries, proving that they have never been involved in a crime. (In England, this service is given by the National Intelligence Department in Scotland Yard). These certificates shall be certified by the TRNC government representatives in their own countries. If there are any directors in your company, who are foreign nationals, you will also be asked to deposit TL 10,000 as bargain money (approximately equals to GBP 4,000) to a bank account in TRNC, and that it will be blocked for 18 months so that your company will not be subject to any tax obligation. When this amount is deposited as bargain money, a certificate will be requested from the bank, and it will be given to the TRNC Tax Department, and again another certificate to be obtained from the tax department, which is equivalent of the previous certificate, will be submitted to the TRNC Companies registration organization. Your advocate will assist you during this process.
According to Cyprus laws, the share capital of the companies with foreign national shareholders shall have been paid up in full on the date of the establishment of the company. The minimum share capital for the companies in TRNC is approximately in the region of $100,000 (US dollars). This amount shall be preserved in a TRNC bank account as bargain money, and shall be blocked until the company is established/merged. When the money is deposited, a certificate will be obtained from the bank, and it will be submitted to the TRNC Registrar of Companies. Your advocate will assist you during this process.
What are the Types of Mortgage (Housing Credit) available in Cyprus?
1. Fixed Interest Rate Mortgage: In the fixed interest mortgage, the interest rate announced during the borrowing of the loan will not differ until the maturity date. Monthly payments are fixed. Payment schedule is once set in the beginning, and it survives during the whole term. Thus, you will not be affected by the fluctuations in interest rates. Since you know how much money you will pay per month, you will be able to arrange your spending easily. Fixed interest mortgage is given for a period up to 120 months in general; however some banks are offering a maturity term up to 180 and even 240 months. In addition, some banks give credit for the whole amount intended to be borrowed but it is general practice that 70 to 75 % of the price of the house to be purchased is allocated credit.
2. Floating (Variable) Interest Rate Mortgage: The starting interest
rate of the floating interest rate mortgage is the same as the fixed interest
rate. However, provided that it is settled in the beginning according to the
options given by the bank, the interest rate is renewed for periods of 3
months, 6 months or per year in line with the inflation rates and other
economic developments. The consumer accepts to be affected by the fluctuations
in interest market, and takes a risk. If the fluctuation is downwards, the
consumer will be positively affected, and if there is an increase, the consumer
will be negatively affected.
There is another version of the floating interest rate mortgage credit which is the Discount/ Diminishing interest rate mortgages. As can be understood from its name, the consumers are affected only by the decreases in the interests. In this case, they are not affected by the fluctuations in the interests. In case the interest rate increases, the set interest rate is preserved, if it decreases, the interest rate will also decrease. However, when using this product, the bank takes a particular amount of money in the beginning under the name of banking services fee, and reduces the risk on its own part. This fee is taken for one time only, and no other fees or charges apply afterwards.
Some banks announce the interest rate to be used for each year beforehand, and it can set the amount of instalments to be paid according to the term to maturity beforehand. In this case, the consumer will not be affected from the fluctuations in the market.
What is the Law on Construction Servitude in Cyprus? How does it protect the Buyer and the Seller?
In North Cyprus the Law on Property Ownership and Construction Servitude has not been enacted, and they have even not been implemented; however, it stipulates the issue of a “Construction Servitude Title-deed” to the buyers who want to purchase a property from the constructions whose permits and licenses are obtained and whose book of real estate registers are open.
As soon as the new law, which protects the building constructor, as well as the buyer and the banks, comes into effect, the “Construction Servitude Title-deed” to be issued for the buyer will ensure a legal guarantee to the property owners before a “Property Ownership Title-Deed” is issued in their names.
With this law, which is drafted by revising the old law, and adding new elements to it, the mode of payment of the buyer will also change. The buyer will be able to take a loan from a bank by giving the building, the construction servitude of which he/she had acquired, as a pledge, and the buyer will be able to complete the construction by giving the money to the constructor, if required. However, the building constructor will not be able to do anything without taking permission from the holders of construction servitude.
In addition, the building constructor will not be able to put the land, on which the construction will be made, in pledge (mortgage). In case the land is put in pledge, he will not be able to sell it. He will not be able to give the Right to Construction Servitude to any other person. Since the lands in pledge cannot be subject to the Law on Construction Servitude, the buyers will be able to purchase properties without any risk.
This law will also control the life in the apartments, and also insurance and appointment of a apartment building manager will be mandatory.
Seasonal Effects in Real-Estate Purchases in Northern Cyprus (Dengiz Kürşat – Avertiss Exclusive Broker/Owner)
We can talk about two seasons or periods during which sales and purchases are high in TRNC Real-Estate market.
In Northern Cyprus, the first period when demands for real-estates increase is the period covering spring and summer months. During this period starting from March and continuing until mid-July, we observe that villa or flat purchases in TRNC are triggered particularly by the youth who are preparing for their weddings.
Although the wedding season in North Cyprus starts from the beginning of summer months and continues until late September, the new weds-to-be starts choosing the new houses or flats where they will establish their new homes, on average two and a half months or three months before their date of wedding. During this period, all reparations and alterations inside the house are made, the furniture of the house is completed, and the house or flat is prepared for moving in until the date of wedding.
This period attracts intense attention from the Turkish Cypriots living in England, during their summer vacations, and this increases the demand for land purchases in Northern Cyprus.
The second period, in which high demand for real-estate purchase is observed in the real-estate market of Northern Cyprus starts after the opening of schools in September, and continues until mid-December (the period before the New Year preparations are made).
This period is the season when the overly high temperatures in Northern Cyprus begin to decrease, when the schools start and when university students are returning to their schools, and also it is the time when foreign real-estate investors are interested in the purchase of property in North Cyprus. In this period, it is also observed that the demand for real-estates such as flats, houses, villas, and building plots that are located in tourism regions such as Girne and Magusa in TRNC increases. Moreover, during this period a serious demand for flats and villas to let (rent) in Girne, Mağusa and Lefkoşa is observed.
Tips for Investing in Real-Estate (Dengiz Kürşat - Avertiss Exclusive Broker/Owner)
In a city, there are several factors which affect and determine the prices of real-estates. The first one is that the city center is always the city center. Sometimes city centers deteriorate, and although the housing becomes shanty and distorted, and although they are not fit for modern life, it is always a city center. What does this mean?
The city center is the point from where you will always reach and have access to social activities, bureaucratic institutions, state agencies, etc. therefore, this proximity in city centers enables saving of time, and it always expresses itself as an attraction center to the people. That is to say that, the city centers or the circle in the immediate outer part of the city centers is the region which is always demanded. For instance, Küçük Kaymaklı is an example to this. Even if the traffic is congested in the center, you will be losing less time because the distance to be covered is less. Suppose that you are given a house which is two times bigger than your house, and it is at the same price, would you go? You would consider. This means that, city center is always a city center.
Apart from this, if you look it traditionally, the cities tend to grow towards the west, and this is very interesting. The cities always grow towards the west. Why? The first reason is that the wind blows from the west, it is breezy. Second reason is that afternoon sun is prevalent in the west. In every part of the world, whichever city you look, you will see that the first point where the city grows is its western part. Just look at our country, where is Lefkoşa growing towards? It is going towards Kermiya, Gönyeli, Yenikent, and Alayköy. When you reach Alayköy, you will see that at this time, Haspolat and beyond will begin to develop. But first, the west will be completed. Look at Girne, which area in Girne grew the first? Alsancak, Lapta, Karşıyaka. When these regions were occupied, the further part of Çatalköy, Arapköy, Esentepe etc begin to be settlement regions. Cities always grow towards the west, and also grow to the south and south-west in some degree. That shows that, one of the parameters determining the differences in prices is the proximity to the center, and the other is the development towards the west. Another issue which emerges as a result of development towards the west is that, as the developments go towards the west, newer settlements and housing emerges when compared to the old ones. This time, the new generation says that, I want to live in the western side, where a more modern life style and newer designs are present. Therefore, everybody wants to purchase a house in Yenikent.
Modernization and trend current is present everywhere. Let’s look at neighborhood culture; neighborhood culture emerges from the nature of humans. The neighborhood means that the human being says that I want to live in a place where people like me are living. Just consider a culture of a stronghold when we refer to the neighborhood. What does a stronghold mean? The stronghold means that “I will live together with people similar to me, and I will keep out the ones who are different”. The neighborhood stems from this point. The neighborhood says that “I want to live in a place where people are like me”. What does this bring about? While the city grows towards one side, whenever a new housing emerges, the new generation says that “Let me go there”. The friends, spouses, fellows of that new generation say that “okay, if they buy, let me go there as well”. This is how trends arise. This is the exact socio-psychological explanation to this case. As the city enlarges towards the west, a trend is born there; as the trend is born, demand increases; when demand increases, the prices also increase. At the moment, Yenikent region is trend here, there are very beautiful houses in Yenikent. As a matter of fact, Yenikent does not have a nature. It is a plain land, and it is totally brown in the summers. Nobody buys a house there due to its nature, they buy because it is trendy. This is a trend. It is new. The houses are wonderful. Since there are wonderful houses, everybody buys a house from the region. They buy because there are new housings and settlements. They buy because the young generation buys. The houses are, indeed, specially landscaped and green, but there is no nature. In fact, let’s do not call this a trend only. Yenikent, socio-psychologically speaking, is a place which witnesses an increase in demand due to the enlargement of the city towards the east.
The point that I want to make clear is that, in consideration of all of the above mentioned factors, it is possible for an investor to have a clearer and more open idea about where to make your investment. That is to say that, if an investor invests in the city center or in the region close to the center, and in the trendy locations, it will not be possible for him or her to lose. The investor will always win. Considering the steady increase in the population...Indeed, making an investment is not very difficult. Let’s continue with the example of Yenikent; where the building plots used to be sold at the price of 9 to 10.000 British Pounds, at the moment they are sold in the range of GBP 80-100-105.000. And all of this increase has been attained in the last 8-9-10 years. Is there another investment tool that would fold in 10? Even gold does not yield such a profit. However, this does not mean that this will continue as such forever. Do not misunderstand me but 10 years ago, who anticipated these developments are now in a very profitable condition. This is how real-estate investment develops. At first, you shall accept the increase in the population, as the population grows, you should anticipate the accumulation in the city centers, and you should accept that the city primarily enlarges towards the west, and as soon as it completes enlargement to the west, you should accept that it will start growing towards the east…If you do these, you will know where you should make investment.
Why do we need real-estate brokers? (Dengiz Kürşat - Avertiss Exclusive Broker/Owner)
Why should people consult a real-estate broker? Why should a buyer or a seller use a real-estate consultant? At first, we should divide the sellers into two groups. The first group is the category that we call the builders of the houses from scratch, and these are the building contractors. The second group is the category that we call for sale by owner, and these are the people who own real-estate but who need to convert this real-estate into cash, and who need to do this as soon as possible.
There is a huge difference between these two groups. When we refer to real-estate in our country, we automatically consider these two groups together. Indeed, this is a very wrong definition. That is because the builder, that is to say, the maker is one thing, and the person who purchase from the builder and put the property on the market again is another thing, they are totally different, and we talk about two distinct sectors here.
I am not referring to the first, in any case, the building constructors also sell their properties, and most of the building constructors have their own sales agencies, and they have their own sale agents. This is a completely different issue. Of course, we also assist the building constructors with our services, in case they seek our help; however they usually have their own sale teams or units. This is completely natural.
Apart from this, the people who we call ‘for sale by owner’ are the people who need to sell their real-estates. In general, these people begin to face difficulties when they are at the selling stage, if they do not have any marketing knowledge. Why do they have trouble? In my opinion, the first and most important reason is that their propensity to err in pricing is very high. Why?
There is a big harm done by Turkish to the real-estate sector, and that is, let’s assume that someone wants to sale his/her flat: GBP 50.000. It belongs to our next-door neighbour Mr. Ahmet. Instantly s/he thinks that “the price of my next-door neighbour is GBP 50.000 or Ahmet sells his flat at GBP 50.000. My flat is more beautiful, there are crown moldings in my flat, and therefore my flat’s value has to be GBP 52.000.”
However, the problem here is as follows: In fact, the next-door neighbor is not selling the flat at GBP 50.000, he is only fancying selling it at GBP 50.000, he is considering doing so, and he is wishing to sell it at that price. Indeed, Mr. Ahmet has already included a 10% discount rate, at minimum. In case Mr. Ahmet becomes pressed for money, he may even increase the 10% discount rate. That means that Mr. Ahmet may be selling his flat at GBP 45.000, 44.000, and even at GBP 43.000. Now, what is wrong here?
The Market does not consist of the prices which the people fancy selling their property, their lands, or in assessing the value of their houses, but it consists of the prices that are actually realized against the real sale prices. That is to say, it is more convenient to say that “Mr. Ahmet sold his flat at GBP 43.000” rather than saying “Mr. Ahmet is selling his flat at GBP 50.000”. This means that a similar flat can be sold approximately at the price. The price at which a real-estate or a house is put on the market is not very important. What is decisive in the market is the actual sale price of that real-estate.
Here we face this problem: In regards to a property for sale by owner, the following assumptions and reasoning is wrong in its entirety: “I searched the internet and houses are sold at his price, my house is more beautiful than those, then my house should be more expensive”. What is the correct thing to do here? You should determine the sale price of a house or a real-estate that will be newly put on the market on the basis of the actual, and realizes sale prices of similar or like with like real-estates that were sold in the market. This is the main reason why some real-estates cannot be sold. You should consider all aspects. Let me be simpler: let’s consider a 4 years old, flat on the first floor of an apartment building with a Turkish title-deed, the area of which is 110 - 120 m², and which is located in Küçükkaymaklı. Instead of thinking that my next-door neighbor is selling his flat at such price or that he is expecting to sell it at that price, if you decide to sell your flat, you should rather learn the actual sale prices of similar properties realized for example within the period of three months. We call this “Competitor Market Analysis”. What does it mean? When we put a property on the market for sale, we should look at it very carefully, like a buyer. The buyer would be interested both in your real-estate and other similar properties. The buyer would say that, you have this house, there is another house next-door, and there is yet another three blocks down… All of them are very similar. Among these similar properties, it is natural that the property with the most affordable price will be the first to be sold.
Why should people use a real-estate broker?
I think, the foremost and most important reason is being able to make the right pricing. Everybody is always inclined to assess the value of his/her property above the market value by saying “I have done this and that…”. This is an emotional approach, and it is a basic error for sales. Obtaining information about the sale price of similar properties and similar information is not an easy task. What can you do? You seek assistance from a real-estate broker working in your region, and who is an expert about that region. You tell him/her: “Dear real-estate broker, I would like to come onto the market. In your opinion, at what price shall I present to the market?”. In return, she/he would say; “Look, that flat was sold three months ago, this one was sold two months ago, and this was sold fifteen days ago…That is to say that, the marketable value of your house is this amount.”
This means that, your house may be sold at a less price while it would have been sold at a higher price. For this reason, I believe that it is necessary to work with a real-estate consultant.