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Additional Information for Investors and buy-to-let clients of Northern Cyprus

Due to a law, which was enacted in Northern Cyprus in 1997, the most profitable investment opportunity currently exists for the buy-to-let properties. This law prescribes that gross rental income is taxed monthly at 10% and that there are no more taxes to pay with regards to income derived from rental activity. If the owner of the property is a local company (rather than an individual), even the dividends distributed at year-end, if any, are tax-free .

We, as Distinctive Properties, always advise our clients to get independent advice from Letting Agents available in the market with regards to letting out their properties, however, the information included in this section is fully dependent on our past experience.

It is a fact that it is a lot easier to find long-term tenants for apartments in Central Kyrenia than any other property type situated elsewhere in Northern Cyprus. In fact, there is a backorder for rental apartments in Central Kyrenia due to demand from expats and university students. For villas, short-term rental income might look more attractive, however, nobody can guarantee tenants in the wintertime.

Hence, we as Distinctive Properties prefer to build primarily in central Kyrenia not only because it is such a charming town, but also because our experience has proven to us that central Kyrenia is where our clients get the most value for their money, both in terms of capital appreciation and rental income. Our clients are enjoying 20-30% capital appreciation of their properties in less than a year and also 8-10% net rental returns per year (after maintenance costs and taxes on gross rental income):

  • I- Rental Returns : Our experience has proven to us that our clients are able to rent their flats for long-term periods for 400-500/month (depending on whether white goods and furniture are available):

    Apartment Sale Price = 60,000
    Yearly rental income: 500/month x 1 months = 6,000
    Taxes on gross rental income: 10% x 6,000 = 600
    Maintenance fees: 30/month x 12 months = 360
    Yearly Net Rental Income after taxes and maintenance fees = 5,040
    Net Rental Return/Year = 8.4%

  • II- Capital Appreciation: We have sold a penthouse off plan at 75,000 and before the project is completed (10 months after the sale contract is signed), our client got an offer to sell his penthouse at 95,000. This corresponds to 27% of capital appreciation in less than a year!
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