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Taxes Related to Property Acquisition
There are extra costs that one shall take into consideration when purchasing property in TRNC.
Taxes
When buying property in North Cyprus, there are four basic fees:
- Transfer of title deed – confirms ownership and is issued by a land registry office.
- VAT – payable to the tax department.
- Stamp duty – payable to the tax department.
- Capital gains tax is also payable to the tax department.
Final price can vary (especially in cases of a resale): it depends on who pays the fees – seller or buyer. Usually, the former owner pays capital gains tax, while the buyer pays VAT, stamp and transfer fees.
If the seller is an individual, the transaction is not subject to VAT, if it is a legal entity, it is taxed. If the transaction has a commercial basis, the value-added tax is also paid.
Tax amount
Title deed transfer, VAT and capital gains fees are calculated based on the assessed value of the property. Thus, a buyer needs to provide the tax department with a copy of a sales contract.
Percentage ratio:
- Transfer of title deed – 12% of the real estate total value (6% is paid during the contract registration, and 6% is paid during the actual title deed transfer)
- Stamp duty – 0.5% of the sales price. It must be paid within 21 days after the contract signing.
- The value-added tax – 5% of the sales price.
- Capital gains fee – if the former owner is registered as a legal entity, the percentage is 4 of the total amount, if an individual is 2.8.
Other payments
Starting from 21/05/2024 after the contract registration one shall apply for the permission to purchase, which is needed for title deed transfer, and costs approximately 17 000 Turkish Lira to be paid online after all the forms have been filled out.
There are also payments related to maintenance:
- Annual property tax is 3 lira per square meter, and it is payable twice a year: April and September.
- Municipality tax – approximately 450 liras per month. It is used to clean roads, take care of plants and collect garbage.
Thus, when buying a property in Northern Cyprus, taxes are paid by both seller and buyer. Our company will help to calculate all payments and expenses associated with property purchase and maintenance.