Property Investment FAQ
Buying property in Northern Cyprus present most buyers to a buying process that is different from investing in property in their home country. In our FAQ we have structured the information in order to create the proper overview and understanding, not only the actual investment process, also about the life and culture in North Cyprus.
North Cyprus is the rising star in real estate investment. As in many other Mediterranean countries, education and tourism investments has laid the foundation.
NOTE: The MARKET TREND for new developments is low market entry pricing, which for investors that decide to invest in the early phase of a project gain an instant market value increase. In most projects this increase is between 20-30% and in some cases up to 40% increase in property value for investors that decide early, compared with investments done in the middle or at the end of the construction phase.
But there are other reasons for North Cyprus being so popular for Real Estate investments.
- Constant increase in property values; where real estate prices in the last five years have increased by 10% – 12% annually
- There is also an advantage of property selling in GBP; where the pound appreciated against the Turkish Lira by 65% in the last 5 years. Property investors have made this gain in the currency alone.
- Rental depreciation period; is in most countries 25 years. In North Cyprus it is between 10-16 years, enabling property owners to adjust rental fees more frequently.
- Quality Education Centers; with English-based Cambridge standards, has made North Cyprus an attractive alternative for countries in the Mediterranean region. Currently there are approximately 100.000 local and foreign students in North Cyprus.
- North Cyprus’s Possibility to Enter the EU; the upside to real estate investors to gain 4 times the invested value. This possibility is the single most important reason to real estate investors.
Once we know your scheduled arrival, we can start planning your visit so that you make the most out of your stay. See the sights you want to see and learn about the different areas, which all have its own unique lifestyle qualities.
Based on your preferences we choose projects that fits your needs and make sure that you get access to the best locations
We offer to book your stay at Gillham Vineyard & Hotel (note; that this vineyard and hotel only accept adult guests).
The approximate cost pr. night ranges between EURO 130 and 350. When you have decided to invest in a property, we reimburse the hotel accommodation cost for your stay.
When investing in property in your home country, you are presented with traditional and proven construction methods, and it is easy to determine the quality of a house or an apartment. Buying property abroad on the other hand, can be a difficult task.
At North Cyprus Escapes we put quality first and only select projects of the best quality. We also understand the importance of the finish expected and we never compromise. For us, the most important thing is that your investment is the right investment for you and that the property meets your quality requirements.
IMPORTANT – Engage only with trustworthy companies
There are approximate 900 illegal or registered companies and persons that carrying on the real estate business.
At North Cyprus Escapes we only work with companies that are members in the TRNC Real Estate Association. Each member company are insured up to €100.000 securing clients for any loss or deprivation during the purchase process.
When you through the North Cyprus Escapes screening process have found a property that meet your requirements it is time to meet and appoint a solicitor. We will assist you to find a solicitor who can act on behalf of you. You issue a Power of Attorney to the solicitor, so he will be able to follow your instructions and act on your behalf.
The meeting with a solicitor is arranged as soon as you are ready to initiate a buying process. Often such meeting is arranged during your first visit, so that you then have legal representation in North Cyprus to assist when you are not here – just like we at North Cyprus Escapes will assist in any way you need.
NOTE: that it is necessary for all foreign citizens to present a “Police Approval Report – issued in English language” in their home country, before a purchase permit can be applied for. Such Police Approval Report normally takes a few weeks, so we recommend applying in good time prior to your arrival to North Cyprus and bring the report with you.
It is also important to know that there is a limitation for foreigners to purchase property, which currently is limited to 1 house with a plot of maximum 920 m2 or a land field of 4600 m2.
Foreign nationals who purchase a residential house in TRNC can apply to obtain a residence permit. Individuals that apply for permanent residence in TRNC, can open a bank account and benefit from public services.
Your solicitor will investigate and confirm the title deeds and based on the deeds, draft a sale contract or approve the contract presented to you from the seller. Such contract includes payment terms and the date of compilation.
Before you can invest in a property you also have to have a Purchase Permit. This permit is issued by the Council of Ministers before you have the right to request that the purchased property be transferred to your name.
NOTE: It will take 1-2 years for the new title deed with your name to be issued.
This does not prevent you from using the property, rent it out or sell it to another buyer.
Your solicitor will continuously inform you about the stage of your application with the Council of Ministers. When your application for Purchase Permit has been granted, the solicitor is following up with the Real Estate Register of the district where the property is located.
When the necessary documents are issued, the solicitor also needs:
- Power of attorney: that allow the solicitor to make a transfer on your behalf
- Passport copy: make sure the passport is valid
- Property documents: documents of this specific property
- Municipal Tax Certificate: of the property tax rate valid for the year of the transfer is place
- VAT invoice: issued by the seller
Once the agreed completed monies are paid to the seller, the process of changing the title deed to your name will be initiated. The solicitor will follow up with the Real Estate Register of your district and inform you as soon as the deeds are changed to your name – and issue this document to you.
Always consider these important pre-cautions before purchase any property:
- Only sign your contract accompanied by your solicitor. Contracts can be prepared for 2 or 3 persons to sign.
- Your contract will be valid in all government offices as soon as the 0.5% contract stamp duty has been paid to the TRNC Tax Office.
- As your solicitor to investigate the property at the Land Registry Office to verify whether the property have any hypothec loans, BEFORE your contract is registered to the Land Registry Office as an addendum to the title deed. This prevent the seller to sell your property to others.
- In order to secure payments, we recommend to ONLY make payments through your appointed solicitor. Hence the importance of hiring your own solicitor and exclusively work with him/her in all matters regarding your investment.
- After all permissions is received your solicitor arrange an appointment for Deed Transfer. The parties meet at the Land Registry Office and complete the transfer. If there are any residue payments, these should be completed prior or during this appointed meeting.
Solicitor charges a fixed fee between GBP 1,000 and GBP 1,250. This fee depends on the property type and are always agreed upfront between you and the solicitor.
Property investment fees for the buyer:
- Stamp duty; 0.5% of the property value + administration fee of GBP 25.00
- Property VAT; 5% of property value
- Title Deed Transfer fee; 3% based on the purchase value
- Municipal property tax; annual 0-1% of the purchase value
- Currency exchange rate; at the time of purchase/payments
- Local bank fees; 0.12% of transferred amount
- Power Distribution Fee; normally ranging from GBP 1200-2500*
*Power Distribution Fee: For new projects there is a Power Distribution Unit Fee that needs to be paid. If you are buying a property that is a part of a housing project; electricity, telephone, water and other infrastructures are provided by the developer, but will be paid by the buyer(s). The developer normally adds all costs for establishing the infrastructure and divided the cost equally to to buyers as a part of a turn-key process.
For new properties there is a 6.25% tax on the agreed and contracted amount. This tax is paid by the project developer.
Once you have bought your new home in North Cyprus, we would recommend you purchase a house insurance. Prices are quite reasonable. There are many insurance companies offering a choice of policies to meet your needs for house, car, and medical insurance. In your search for insurance in the TRNC, you should search for “Sigorta” which is the Turkish word for Insurance. At North Cyprus Escapes we of course will assist you to connect with any of the insurance companies – You just need to let us know.
Since many properties in North Cyprus has foreign owners, there is a need for services. These services span from rental services to full property management, including repairs, renovations, pool maintenance and house cleaning. Let us know what your need will be and we can assist you in searching a reliable provider for the needed service.
Cypriots are friendly, educated and tolerant people. The people of North Cyprus are nationalist, democratic and social people. They love to help, and they meet their guests with sincerity and friendliness without discrimination. Since it’s an islandand a small community, people protect social values, and their reputation.
Cypriots are also very sociable and like to go out. All towns have local cafes where people sit and chat in a warm atmosphere. We recommend visiting some of the many festivals, especially in the beginning of summer.
Amongst the many delights of North Cyprus are the cultural differences. Their language, although Turkish, is of the Cypriot variety. Many of their customs are from a mix of the cultures which have swept through the island over the centuries. Although Cypriots are Muslim, their religion is important to them but they don’t feel the need to necessarily visit a mosque on a regular basis. ‘My religion is inside me’ is a regular comment.
Cypriots will not feel offended if visitors don’t necessarily understand basic rituals on visiting someone’s house, but you will gain more respect by having made some effort. When meeting someone it’s usual to shake hands, smile and look them in the eye then later say a separate goodbye to each guest.
Remove shoes before entering a house or mosque as people used to sit on carpets on the floor. Take a small gift of cakes or sweets and, if flowers, don’t take funeral lilies. On a brief visit you may be offered tea or coffee and offered ‘macun’, preserved fruit. If someone suggests reading coffee grains at the bottom of your coffee cup, turn the cup upside down onto the saucer to be read. Tavli, like backgammon, is the usual game played in coffee houses.
According to the legend of North Cyprus, it’s the birthplace of the goddess of love, and home to numerous heroes and saints.