When choosing real estate, potential buyers often assume that by multiplying the price per square meter by the total area of the property, they will receive the amount necessary to buy real estate, but this is not entirely true. When buying a home on the primary or secondary market, it is necessary to be prepared for additional costs, due to which the initial amount may increase several times.
Today we will explain in detail all the additional expenses when buying real estate so that you have the opportunity to evaluate them and prepare in advance.
Property in Northern Cyprus, as in other countries, is subject to additional taxes upon purchase. There are purchase taxes (one-time payments) and maintenance (annual/monthly payments).
The taxes on the purchase of real estate in North Cyprus are:
- Stamp duty is a state duty for registering a sales contract with the Land Committee of the TRNC. Paid to the tax office within 21 days from the date of signing the sales contract. The fee is 0.5% of the amount of the object under the contract.
- VAT (Value Added Tax) is 5% of the property price. Payment is made three months before receiving the keys or within a year after receiving the keys.
- Transformer fee – varies depending on the purchased object and its infrastructure. It includes the connection of electricity and water supply communications and a telephone line.
- Transfer of title is payable to the District Land Committee approximately 12-14 months after the approval of the Council of Ministers is issued to transfer title to the purchaser. The fee is 6% of the total value of the property. In addition, every foreign investor, upon the first purchase of the real estate, can take advantage of a one-time benefit for paying this fee at a reduced rate of 3%. All subsequent purchases are taxed at a rate of 6%.
The taxes on property maintenance include:
- Real estate tax – is 1.25 lira per 1 m2 of the covered area of housing. It is paid twice a year, in April and September.
- Cleaning Services – the tax is 100 Turkish liras, regardless of the type of housing and residential complex. The list of services for maintaining cleanliness includes road cleaning, garbage removal, treatment of plants from insects, etc.
- Utility payments.