Under the new laws of the Turkish Republic of Northern Cyprus (TRNC), non-TRNC citizens have the right to purchase only one plot of land up to a maximum area of 5 donums per person, provided that the plot consists of only one dwelling (previously this was 1 donum, but this has now been increased by Law 522008 on the Acquisition of Real Estate and Long-Term Leases (Foreigners)). Planning permission for the construction of additional dwellings will not be granted after permission for acquisition has been granted. Under the new provisions, married couples can now each purchase one property in their own name (previously this applied to one property per household, with husband and wife counted as one household, but this has now changed). Before the title deeds for the property can be registered in your name, you will need approval from the TRNC Council of Ministers. This is explained in more detail below. If you wish to acquire title to more than one property or to a property with an area of more than 5 donums, we can advise you on the appointment of trustees or the formation of a TRNC company to manage the title to the property for you.
The conveyancing process is designed to protect your interests as much as possible throughout the transaction. The first step is an initial meeting with you to obtain information about the property you have chosen and any informal agreements you have made with the seller regarding price, payment schedule and included items. At this stage we may also obtain a Power of Attorney from you to ensure that we can act on your behalf and sign documents if you are away from North Cyprus for any length of time.
We will then prepare a contract of sale to protect your interests. The contract of sale will contain all the important details such as plot number, plot size, price, payment schedule, completion date with penalty clauses for late completion and all floor plans and specifications will be attached to the contract to ensure that the vendor is obliged to carry out the building works in accordance with these. The contract will be sent to both the seller and the buyer for review. If both parties are satisfied, the contract is signed.
New regulations since 2 January 2008 require all contracts of sale for the purchase of property in North Cyprus to be registered with the District Land Registry within 21 (twenty one) days of signing and it is now mandatory that stamp duty at the rate of 0.5% is paid before registration can take place. Once the contract of sale is registered, the buyer is protected from selling the land to a third party and the contract takes precedence over any subsequent encumbrance.
The Land Registry in Kyrenia charges a fee of 88.50 TL for registration. The Land Registry in Famagusta charges 91.75 TL for one title deed and a further 13.25 TL for each additional title deed or plot. It may be that your property has several Title Deeds or plots. To register the contracts, the Land Registry will require the original and one copy of the deed of sale, the site and seating plans and one copy of the title deed, a copy of the stamp duty receipt and copies of identification of the parties or, if the vendor is a company, the company documents together with an application form in duplicate and the appropriate fee.
If we sign the forms to register your contract of sale on your behalf, the Land Registry will also charge for additional stamps for the powers of attorney used. The additional stamp charges depend on when the power of attorney was signed and are as follows:
Less than 1 month: 34.50 TL 1 – 6 months for Kyrenia district or 1 – 3 months for other districts: 69 TL Over 6 months for Kyrenia district or over 3 months for other districts: 103.50 TL.
You can make the registration at the Land Registry yourself or you can hire us to do it for you (by paying the appropriate fee). If someone other than yourself is doing the registration, you must issue a power of attorney authorizing that person to act on your behalf.
In addition, in December 2007, the Electricity Authority introduced a new rule whereby buyers cannot apply to have an electricity meter connected to their property unless they can prove that stamp duty has been paid on the contract of sale.
Please request a copy of our guide to tax in property transactions for more information on tax.
Next, we will check the title deeds on your behalf to prove that the vendor is the registered owner of the property and that there are no mortgages/encumbrances, injunctions or other charges on the property. We will also check that planning permission has been obtained for the building. We will then submit an application to the Council of Ministers for your purchase permit.
During the processing of your application for a purchase permit, the Council of Ministers will make enquiries with the Land Registry, the military and immigration authorities and if these are positive, the permit will be issued. The approval process can take a long time; the current estimate is around a year. However, this does not prevent you from moving into the property, renting it out or possibly even selling it – we usually always try to include a clause in the contract with the seller that allows you to sell the property before you take ownership of it. You should note that the TRNC government has made statements to the effect that all buyers should obtain a purchase permit from the Council of Ministers before buying the property so that payment can be made at the same time as the transfer of ownership.
There is a risk that the purchase permit will be denied, and there are further risks if payment is made before title is transferred while the deeds are still in the seller’s name. Therefore, to protect buyers, the government advises that purchase approvals be obtained before the buyer makes any payments. However, since it takes a long time to process the permits, it is not practical for buyers to follow this advice. It is virtually impossible to find a seller who is willing to wait until the buyer obtains the purchase permit before entering into the purchase agreement. Buyers proceeding on this basis must therefore accept that there are risks in buying without first obtaining Council of Ministers approval and making payment at the same time as transferring ownership, and that there is also a small possibility that purchase approval will be refused.
You can mitigate this risk by ensuring that the property you wish to purchase is not located near any military bases. You should also be aware that you will need to prove to the Council of Ministers that you do not have a criminal record. In the event that your application for permission is refused, you can nominate another person to take ownership of the property on your behalf and hold it in trust for you. We can help you draft the necessary trust deeds. If you wish, we can also try to negotiate with the seller to include a clause in the contract stating that the seller will refund the purchase price to you if the purchase approval is denied.
Once your purchase approval has been granted, we will notify you. If you wish us to act for you in connection with the conveyancing, we will then complete all the necessary Land Registry valuation forms for the valuation of the property. Any taxes due on the conveyancing will be paid and the title deeds will be registered in your name (for more information on taxes, see our guide to taxes). If you have given us power of attorney, this can all be handled without you having to travel to the TRNC. We will then collect the title deeds for you and hold them until you can collect them.
Anyone wishing to purchase property in North Cyprus should be aware that, as in many other countries, there are risks. There have been cases where people have had problems due to misleading advertising, breach of contract by sellers/builders, non-completion or late completion of off-plan properties or wrongly levied taxes. The legal process in Cyprus can be very lengthy compared to the UK. You should also note that the Cypriot legal system is not the same as the UK legal system.
Ownership of many properties is disputed across the island, due to the fighting between ethnic groups in the 1960s and 1970s. It is impossible to predict with any certainty what the exact impact of this will be in the future. Negotiations are still ongoing to reach a settlement that addresses the issue of ownership on both sides of the island. Until negotiations are complete and a settlement is accepted by both sides, there can be no definitive answer to this question. Purchasers should be aware of the risk that they may face legal proceedings in the courts of the Republic of Cyprus and attempts to enforce judgments of those courts elsewhere in the EU, including the UK, although no final judgment has yet been given in this regard. Potential purchasers should also bear in mind that any future settlement could have consequences for properties they purchase in Cyprus. Under the laws in southern Cyprus, it is a criminal offense to buy, sell, rent, market or mortgage a property that belonged to a Greek Cypriot before 1974. Its a criminal offence. Documents relating to the purchase of property in North Cyprus may be seized if the Green Line is crossed. It is advisable that buyers follow the advice of their home country’s foreign ministry or local consulate/embassy in Cyprus.