Guide To Purchasing Immovable Property in Northern Cyprus
Buyer’s Guide to Property in North Cyprus
When purchasing property in Northern Cyprus, it is important to ensure that you have a good understanding of the legal processes involved as the conveyancing procedure is somewhat different to that in the UK.
Make sure that both the estate agent and the vendor are reputable. If purchasing a new construction, make sure the builder is experienced and if possible, try to view some of the properties previously built by the builder to get an idea of his standard and quality of work. Carefully check the specifications to ensure that all essential items are included and that there are no hidden costs or extras.
Next, it is important to find a good impartial solicitor who has adequate knowledge of English and who is experienced in dealing with land sales to foreign purchasers. As standard practice, the solicitor should carry out Land Registry searches on the property to make sure that the vendor is the registered owner and has selling rights over the property and that there are no mortgages, charges or other encumbrances affecting the property.
For new constructions, the solicitor should also check that the relevant building permissions have been obtained and that the plans have been stamped and approved by the City Planning Office.
The solicitor will draft a contract of sale and the terms of this should give you maximum protection. With new constructions, payments should generally be made on completion of the construction stages and it is advisable to keep a small amount back until title to the property is transferred into your name. Also, ask your solicitor about possible ways to protect yourself in the event of the bankruptcy of the builder.
The next stage is the purchase permit application. All non TRNC citizens who wish to purchase property in Northern Cyprus must obtain permission from the Council of Ministers before the property can be legally registered in their names. The application for the permission will usually be made on your behalf by your legal representative. The process is slow and involves searches being carried out by the Land Registry, Immigration and the Military. Currently, foreign purchasers are entitled to have only one property (which must not exceed 1 donum in area) per household registered in their names. Husband and wife are classed as one household for this purpose. It is estimated that at present, purchase permits are taking between twelve and twenty four months to come through.
With new constructions, it is often the case that the construction of the property is finished before the purchase permit has been granted. When the construction is finished, before making your final payment under the contract, it is always best to consult with your solicitor to ensure that when you take possession of your new home, all the relevant safeguards are in place, all documents are in the possession of the solicitor, any items of snagging are dealt with and in some cases, that a supplementary contract is prepared to reaffirm and clarify the remaining obligations between you and the builder.
Once the purchase permission has been granted, your solicitor will fill in the relevant Land Registry transfer forms on your behalf. The Land Registry will then value the property and based on that valuation, the taxes will be payable. The Land Registry transfer fee which is almost always paid for by the purchaser is currently at 6% of the Land Registry valuation. However as the new regulation stands purchasers now have the option to pay %3 of the Land Registry valuation. This option can only be used once in a life time.
The VAT which is usually paid for by the purchaser is currently at 5% of the Land Registry valuation. Once the taxes are paid, the transfer of title will take place. If you have given your solicitor a power of attorney, your solicitor will sign all the forms on your behalf at the Land Registry.
From the date of transfer, the property is legally registered in your name. However, the Land Registry usually requires at least one month to issue the new title deed to the land in your name.
Akan Gurkan LLB (University of Warwick)
Gurkan and Gurkan Advocates and Legal Advisers
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