Legal costs of purchasing property in North Cyprus

Apart from the property cost which is determined by the vendor following costs must be considered while purchasing property in North Cyprus.

• Stamp duty : Stamp duty is paid to the tax office and calculated on the contractual value of the property. Stamp Duty is usually paid by the Buyer, but this can be changed between the parties in the sales contract. All sales contracts must be registered at the regional directorate of the Land Registry and Cadastre Department within 21 days from the time of signing. Stamp Duty must be paid at a rate of 0.5% in order to be registered
• VAT (Value Added Tax):
• VAT is payable at a rate of 5% on new developments, and this cost is usually borne by the buyer. However, for some resale properties, VAT may also be due if it wasn't paid when the property was initially purchased off-plan. The exact timing of this payment depends on when you take possession of the property.
• Contract registration tax : For the contracts not registered before February 10, 2023, the 6% contract registration tax is due at the time of contract registration. This tax is applicable to all contracts signed by foreign buyers, regardless of whether they are purchasing property for the first time or not. It's important for those planning to purchase property in Northern Cyprus to register their contracts promptly to comply with these tax regulations. The timing of this tax payment is closely tied to the contract registration process, which is a crucial step in the property buying journey.
• Certificate of ownership (Title Deed) Fee : This is 6% of the sale price paid when transferring ownership to the buyer's name.
• Landfilling Tax : A new tax introduced in 2023, payable under certain conditions as 2% of the sale price. It is notable that this tax is applicable in certain circumstances.
• Annual Property Tax : This is based on the area of your property and is calculated annually. The rate is about 1.25 Turkish Lira (approximately 0.1 Euros) per square meter of the covered area of your property. You are required to pay this fee once a year at the municipality of your residence. The tax rate ranges from 0.1% to 0.2% of the property value per year​.
• Other possible costs (TRAFO): These can include fees for transformer and services of the maintenance company of the development the property is located in. Additionally, there are costs for connecting utilities like electricity, water, and telephone ranging from £1500 to £2800 depends on the project. These payments are typically paid at the time of or shortly after taking possession of the property
• Capital gain tax: The Capital Gains Tax, often referred to as the 'stoppage tax', is typically payable by the seller at the time of selling their property. The rate of this tax can vary based on whether the vendor is a professional or a private individual. Professional vendors, such as property development companies, are subject to a 4.7% tax. On the other hand, private individuals have the benefit of a one-time tax-free sale right for a house or land not exceeding 1 donum (about 14,400 square feet). If the property size exceeds this limit, a 2.8% Capital Gains Tax is applicable on the additional land​. Private individuals have the option of a single tax-exempt sale, applicable to a house or land within the specified size limit. This exemption can be strategically used for the most beneficial tax outcome. The Capital Gains Tax is due when the property is sold and the transfer of ownership occurs. This tax is calculated based on the difference between the purchase and sale prices of the property.
• Rental Income Tax Rate : The tax rate on rental income varies depending on the currency in which the rent is paid. If the rental payment is made in Turkish Lira, the tax rate is 8%. However, if the rental payment is in any other currency (like GBP, USD, EUR, etc.), the tax rate is 13%. For long-term rentals, income tax is payable by the 15th of the following month. Alternatively, it can be paid in full for the duration of the tenancy upon registration of the agreement. Late payments will attract penalties. For short-term rentals, you must submit a Declaration of Rental Income to the Tax Office, and the same tax rates apply as for long-term rental.