Tax Info
Taxes for Properties in North Cyprus
In Northern Cyprus, property purchase taxes are paid right at the end of your transaction after you have received an approved permit and title deeds are transferred into your name. The construction companies require to get VAT to be paid on the sale price at the date of delivery of possession of the property in North Cyprus
The current taxes for property sale or purchase in North Cyprus are:
Land Registry Transfer Fee – 6%. Every person has once in a life time option to reduce the fee tax in North Cyprus to 3%.
Same possibility applies for a selling of a property, this means you choose the option not to pay stoppage tax for once and otherwise it is 4 %
VAT – 5%
VAT is applicable only in the case where the vendor is a Professional property seller/trader/developer or constriction company. The VAT is payable by the purchaser unless parties agree on different terms in the Contract of Sale.
Stamp Duty – 0.5%
Before the Contract of Sale is registered at the District Land Office in North Cyprus, stamp duty of 0.5% of the sale price is due to the
Tax Office.
Property purchases overseas may have distinct financial and legal ramifications than those in your home country. As a result, you need to
be familiar with ideas like the price of buying a home in North Cyprus. Under the laws of the Turkish Republic of Northern Cyprus
(non-Citizens are entitled to take the title of only one property up to a maximum area of 5 donums per person providing that the property must have only one unit house on maximum 5 donum.)
However, if you wish to buy or invest in more than one property, or a property over 5 donums in area, than you must use trustees, or
you can set up a TRNC L.T.D company to be able to invest in multiple properties.
Also changes were done in terms of how many property can be bought, before the new law only one property was allowed to buy, now husband and wife can buy each a property.
Before the title deeds to the property can be registered in your name, you will need to have permission from the Council of Ministers.
The buyer is protected from the land being sold to a third party after the contract is recorded, and the contract will take precedence over any future encumbrance.
Overview of taxes
What taxes are payable on the purchase – and when are these payable?
Stamp duty:
Which is payable within 21 days of the date of the Contract as I have mentioned above is 0.5%.
Then we have Vat which is 5% on new developments that the buyer is responsible to pay however some resale properties are also due to
VAT
To be payable by new buyers because previous buyers never paid it when they purchase on off plan.
A then for last, buyers have a transfer fee which is 6%.
If its your first purchase in North Cyprus then every person has a once-in-a-lifetime exemption to reduce this tax to 3%. If you decide to use your option right. this is when your purchase permit has been granted (where it takes 11-12 months) and the title deeds are transferred into your name.
Not to forget the vendors, where we agents call them, sellers are responsible for the stopaj (Tax withholding – Wikipedia) tax, which is 3% or for some countries it’s called Capital gains tax.
Also, if the property Title Deed is in the name of a Company, constructor, trader or a Trust Company the taxation rate will be 4.5% for the seller.
The good news is, at present there is a one-time sale option introduced by government where you do not have to pay stopaj tax on your first
sale and you can choose to use that one-time sale option or use it on a further sale.
Overall: if you are buying resale, you will pay TOTAL 3.5% subject to vat if its paid, if not than 8.5%, but if you are buying new development property than you must pay 8.5% total.
