North Cyprus Investor's Guide

Villas in Northern Cyprus for Sale

Villas in North Cyprus offer the best value for money in the whole Mediterranean region. The prices for villas have at least doubled in the past year and are expected to grow strongly, which is always good news for the existing and prospective investors. A three bedroom villa with a private swimming pool in a nice location, close to Kyrenia would cost from around £100,000. Villas for sale in Northern Cyprus still represent excellent value for money, capital growth potential and promising investment returns.

Land and Property Purchase

With regard to the purchase of land or buildings, we will first look at the different types of property, and the title deeds which one is likely to be offered.

• Clean freehold title - British or other foreign ownership pre-1974, with title deed (kocan), clearly stating that this is the case. Internationally recognised deeds.

• Clean freehold title - Turkish Cypriot owned pre-1974. These deeds are 100% safe, but before the property can be registered in your name, an application must be made to the Council of Ministers for approval. Foreigners are limited to purchase one house or one dönüm per person (husband and wife count as one person unless they have different surnames). The procedure to obtain approval will take about six months or so.

• TRNC - kesin tasarruf - absolute possession document - title deed. This is property or land that was in Greek Cypriot ownership pre-1974. When the Turkish Cypriot refugees came to the safety of the north after July 1974, they left all their possessions behind in the south. Accordingly, the Government then assessed on a points basis, the value of the refugee's forsaken assets in the south. With these points, the Turkish Cypriot refugee could take a relinquished Greek Cypriot house or land in compensation for his lost properties. He would then sign over his properties in the south to the TRNC government, who would then hold them pending a negotiated settlement between the north and south Governments. The refugee would then be issued with a title deed for his newly recompensed property. Until he received this title, he would not be in a position to sell. Our feeling is that as the island is heading, albeit slowly, for some sort of solution, whether it will be a negotiated settlement or annexation to the Motherland, then the TRNC title deed properties can be considered safe to purchase.

• Land or property - Greek Cypriot pre 1974 - no title deeds - yet un-issued. Some people offer for sale, for relatively nominal sums, these properties without deeds. They are sold for "air money" or "goodwill" usually, these need the purchase of additional points before the title deeds will be issued. It is our opinion that agreements should not be entered into for property that does not have a title deed issued by the relevant authority.
  
  Regarding the actual mechanics of property or land purchase, the following procedure must be adhered to: The validity of the title deed is checked and confirmed by Royal Estates via Notary Public. Contracts of sale are drawn up by Notary Public, with the purchaser paying a 10% (10 or 25% for new constructions) deposit, and a completion date is set. The contract consists of all agreements between Vendor and Purchaser i.e. payment plans, extras, inventories etc. In many cases, the purchaser returns to the UK or wherever, and the chosen Power of Attorney attends to the completion in the purchaser’s absence. If the property is registered in the name of a local person, then an application must be made to the Council of Ministers; allow 4- 6 months. The Land Registry values the property for Stamp Duty purposes. On the day of completion, the monies are paid by the purchaser, Royal Estates, the Public Notary or the Power of Attorney to the vendor and the Land Registry respectively; the name of the purchaser is entered into the Land Registry's record books, and the new title deed is subsequently issued. Application for purchase permit and legal fees will cost £500 (most of our competitors charge ₤1000) including fees for Public Notary. Or you can opt for a solicitor which would cost from £1200 upwards. Stamp Duty is 6% of the value levied by the Land Registry Office for the concerned property (The value Levied by the Land Registry Office is usually lower than the actual agreed sale price). Professional new developments also have a 5% VAT to be paid at the Land Registry Office. Application for building permission fee to be paid is 2.5% of the value of the building project. During the Purchase procedure, Purchasers have the opportunity to employ a solicitor to manage legal bureaucracies for them. We would be obliged to strongly suggest a number of English speaking solicitors but then again we as Royal Estates recommend that our clients work with a Notary Public. There is no rating system in the TRNC at the present time. The legal system here is based on British law.

  
  
  

Summary for buying a freehold property:

1. • Property is chosen and a price agreed.

2. • Contracts will then be drawn up by a Public Notary, setting out the terms of sale: price, timescale, purchaser and vendor details and any other relevant conditions including the payment plan for new-build properties.

3. • Contracts are signed by vendor and purchaser.

4. • Purchaser pays agreed deposit.

5. • Purchase permit is applied for from the Council of Ministers.

6. • Once the purchase permit has been issued, the remaining balance is due from the purchaser.

7. • The vendor will then sign the title deed into the name of the purchaser, stamp duty will be paid and this is known as transfer of title deeds.

THIS COMPLETES THE SALE

Construction & Planning:

For the client who wishes to purchase land and build a house or villa, the laws are as follows:

a) Outside the Municipal boundaries, there are restrictions on the area that one can build on (20% of the land area), and a height restriction of two storey.

b) There are good architects and engineers who will plan and design your villa at reasonable rates. We are pleased to be able to recommend reliable practices for interested clients. Once the plans have been lodged with the District Office, work may commence.

c) Land in North Cyprus is measured in dönüms. 1 dönüm consists of 4 evleks. 1 evlek = 3600 ft², 1 dönüm = 1388 m² or 14400 ft², 3 dönüms = 1 acre. Building costs vary, dependent upon finishing, from £250 per m² upwards. Most buildings are constructed in the reinforced concrete frame system that is prevalent in the Mediterranean countries. Buildings tend to be over-specified, but this can only be an advantage to the buyer. Materials are readily available from Turkey, Spain, Italy, Germany and UK. There are good architects and engineers who will plan and design your villa at reasonable rates. Our associated construction companies can help with planning, designing and building. Once the plans have been lodged with the District Office, work may commence. We would be glad to arrange the meetings with several reputable construction firms and architects to provide you the best quote possible, when you come over to Northern Cyprus.

In addition we are happy to direct clients to excellent suppliers of all household items, antique furniture and electrical equipment, guidance is also available for services such as landscape gardening, AC installation, pool maintenance and interior design services. We have a property management section who will attend to all your requirements should you wish to rent your property or have the villa managed in a professional manner. Please Contact Us for further information.

Investment Incentives:

The government of Northern Cyprus actively encourages Foreign Investors and has introduced a number of incentives to aid foreign investors. North Cyprus is a tax haven. There are exemptions on income tax, some import duties and corporation tax. There is also little or no council tax. Many grants are offered by the government to help with the setting up of business generally but particularly tourism. Government statistics say that from 1999-2002 there were over 6000 foreign investors. Property prices have risen more than 120% in the last 3 years making North Cyprus one of the best places in the Mediterranean for property investment.

• Foreign investment is actively encouraged, and those willing to invest in Northern Cyprus can be sure of a positive Government attitude.
• Leasing of land for extended periods at favourable rates.
• Import duty exemptions for goods concerning the project.
• Government contribution to charter risk.
• Contribution to brochure/advertisement expenditure up to 75%.
• Exemption from income tax and corporation tax for a period of ten years in the case of investment in tourist accommodation units. For public companies which have shareholders in excess of 50, tax exemption can be extended.
• Annual interest and principal instalments of foreign loans enjoy a transfer guarantee.
• Tourism establishments or hotels may deduct each year 20% of their annual foreign exchange gross earnings from taxable income.
• Free transfer of proceeds in case of liquidity of investments.
• Repatriation of profits without restriction or limitations.
Employment of foreign personnel who are not available locally.
• Transfer of net income earned by foreign personnel is free.
• Exemption of constriction license fee.
• Also deductible when calculating annual taxable profit are all travel expenses related to promotion and marketing, plus all kinds of advertisement, promotion and marketing expenses.

Investment Procedure:

With reference to the registration of a company, the legal form widely used for business undertakings in the TRNC, both by foreign investors and by local businessmen, is the private limited company. The provisions concerning the limited company are set out in the Company's Law, Cap 113, which is almost identical with the UK's Company Act of 1948. Permission is obtained from the Council of Ministers for foreign ownership of TRNC registered companies, usually within two or three months of application. The foreign ownership can be up to 49%, with the main share holder(s) being of TRNC citizenship owning at least 51%. A business permit is also required, which may be obtained from the Immigration Office - this is dealt with later on this page.

Visas, Permits and Licenses:

The TRNC is encouraging a policy of attracting foreigners to come and live and work in North Cyprus - in particular, to invest in businesses, especially within the tourism sector. This, of course, opens up a multitude of trades and businesses, from travel agencies, transport companies (whether land, sea or air), hotels, bars, restaurants, holiday villages, tourist related services such as water sports, recreational land sports such as tennis, golf, horse riding etc.




A foreigner coming to N. Cyprus to live and/or work must apply for the following permits; firstly, a temporary visitors permit from Lefkosa, which involves the completion of a form and the supply of three or four passport size photographs. A full permanent resident’s permit is not usually issued until the recipient has been in residence in the TRNC for five years.

Operate Business in North Cyprus:

If you wish to operate a business in TRNC, the following procedure must be adhered to: If you are to form a limited company, then you instruct an accountant to make the necessary applications on your behalf to the Council of Ministers, outlining the trading intentions of the company, share capital, directors etc. The foreign ownership can be up to 49%, with the main share holder(s) being of TRNC citizenship owning at least 51%. A full foreign limited company may also be formed though this is at a higher cost and can take longer. A further application has to be made to the Immigration Department for an annually renewable business or employment permit, which is given once the Council of Ministers has given their approval. You must also have a medical examination for clearance of TB and HIV. Finally, you register yourself and your company with Social Security for health insurance payments, the tax authorities, and the provident fund. Once all this has been done, you may commence trading.

For retired persons, the residents permit is all that is required. Retired persons may bring into the country a full household of furniture. These are virtually tax free - a nominal 2 - 3% tax is levied.

All foreigners should carefully examine the importation of vehicles from overseas, as cars are valued (Glass's Guide) and import tax is levied on the basis of the value, engine capacity and age. In most cases, the tax assessment is high. Second-hand vehicles are in abundance, but prices for reliable cars rarely drop below £2000 sterling, no matter the condition. Car road tax is approximately £40 annually (more for larger cars/jeeps etc.), and third party insurance in the £30 region. Most applications for licences, visas, permits etc., do require an inordinate amount of patience.

Finally, there are opportunities to enter into long-term loose or joint venture projects with an organisation here that owns many seashore and inland tracts of land and properties. Any interested companies or individuals who are looking for investment opportunities in the tourism sector, for hotels, holiday villages, villa or apartment projects in superb locations please Contact Us for more information about our investment services.