Purchase Taxes
V.A.T.
The Tax Office requires a copy of the Sales Contract to be submitted before the title deed transfer. It will then calculate the VAT based on the contract value of the property, which is currently set at 5%.
Transfer Fees
Transfer fees payable to the Land Registry Office just before the title deed transfer are typically paid by the buyer and have currently been reduced from 6% to 3% of the property’s assessed value.
Stamp Duty
The Stamp Duty, payable to the Tax Office, is calculated based on the contract price of the property. Generally, the Stamp Duty is paid by the buyer; however, this can always be modified by an explicit clause in the Sales Contract. All Sales Contracts must be registered with the District Land Registry Office within 21 days of signing, and payment of Stamp Duty at a rate of 0.5% is now mandatory before registration. It is advisable to consult with a registered official lawyer in Northern Cyprus after selecting a property for purchase.
During your initial meeting with the lawyer, you will receive details about the property you have chosen to purchase, and they will review any informal agreements you have made with the seller regarding the purchase price, payment plan, and items included in the sale. The lawyer will explain the procedures you need to follow, including the taxes and fees you must pay, and can be involved in inquiries on your behalf to ensure that the transactions are conducted safely and efficiently. This stage may also involve obtaining a power of attorney from you, allowing the lawyer to act on your behalf to sign documents in case you are away from Northern Cyprus for an extended period.
General Principles of Legal Services:
The lawyer will conduct a title deed search at the relevant Land Registry Office to verify that the seller is the registered owner of the real estate and that the property is free from any liens, encumbrances, or restrictions. They will review the documents and check that the necessary construction permits, approvals, and consents have been obtained.
To protect your rights and interests, the lawyer will prepare a Sales Contract tailored to your specific requirements, detailing the sale’s particulars, completion dates, payment plan, and the responsibilities of both parties, as well as default penalties and indemnification clauses. The contract will be provided to you and the seller for review, and it will be signed once both parties are satisfied with the content.
Once the lawyer is satisfied with the results of the title search and the contract has been signed and modified, they will begin the process of registering the Sales Contract with the District Land Registry Office. It is mandatory for all sales contracts related to property purchases to be registered at the District Land Office within 21 days of signing the contract, and the payment of Stamp Duty at a rate of 0.5% of the property’s value must be made before registration can take place. The registration of the contract protects you against the sale or transfer of the property to a third party and any liens that may later be placed on the property.
