Legal Provisions of Home Buying Process
Legal Provisions of Home Buying Process
The process of buying and formalizing real estate in Northern Cyprus is far easier than in other Mediterranean countries, such as Spain or Greece. Despite this, during the property purchasing process in Northern Cyprus, we advise that you employ the services of a licensed and reputable lawyer to ensure that your interests are protected.
Northern Cyprus uses British common law. However, there are certain peculiarities within the legal system in Northern Cyprus which may present challenges for a foreigner lawyer who wishes to oversee property deals. In our opinion and from our experience, it is better that you work with a local lawyer to oversee the process.
The lawyer’s responsibilities include the following:
- Preparing a Contract of Sale
- Facilitating transaction legitimacy verification
- Facilitating contract registration at the Land Registry
- Verifying and certifying Title Deed before purchase
- Representing the purchaser in a situation where the purchaser is unavailable and obtaining specific documents and permissions during the purchaser’s absence
- Obtaining Permission to Purchase(P2P) from the Ministry of Internal Affairs
- Transferring Title Deed to your name and finalizing the deal
In general, remuneration for these services is about £1200 (approximately 1500 EUR) and is paid in full at the time when the contract is signed.
Preparing a Contract of Sale
As a foreigner, you can easily buy property in Northern Cyprus in your own name. During the contract preparation process, you will need to submit your passport to the lawyer so that he can use apply your details to the contract of sale. Also, the contract of sale is prepared in three copies (for you, for seller and for the lawyer) in Turkish and in your native language. All copies have equal power i.e. they are all equally legally binding. Before contract is prepared, the buyer and the seller should have negotiated and reached some agreement about all the conditions of purchase, the payment terms, etc. Generally, a buyer may be required to make a down payment in order to reserve the property. The down payment ranges from £1000 to £5000 (1200-6300 EUR) and depends on the property price. The down payment is also specified in the contract.
Registering a Contract of Sale
Registering your Contract of Sale is a critical step in the purchase process. This is because it serves to secure your property rights and blocks any further transactions regarding the property. This essentially protects you from dishonest sellers. Furthermore, once you have a registered contract of sale in your name, you can apply for a residency permit in Northern Cyprus and subsequently for Northern Cypriot citizenship. You can read about residency permit application in our article Visas and residency permit in Northern Cyprus. The contract is registered at the Tax Office. At the tax office, you will be required to pay a Stamp Duty based on a rate of 0.5% of the property price. Afterwards, the contract will be transferred to the District Lands Office where it is eventually registered. This costs about 15 EUR. The contract of sale has to be registered within 21 day after it has been signed by the buyer and the seller.
Payment on contract
There are two ways to pay for your new house in Northern Cyprus. The fastest one is by making a direct and complete payment with your own funds. Money can be transferred via bank in your home country to the lawyer’s account specified in contract. Otherwise, you can pay with your credit or debit card and/or by cash. Usually, money has to be transferred in 15 days after purchase.
Also, the construction companies in Northern Cyprus provide easily provide property loans to legitimate buyers. Some of these loans take form of interest-free installment payment plans, while other are similar to mortgages. The documentary process is not rigorous and the loan is generally approved quickly.
Finalizing the deal
The law in Northern Cyprus mandates that the purchase of property within the country involves the purchase of the land on which the property sits. Therefore, the government supervises all property deals and carries out buyer’s background check. For this procedure, you will be required to provide a police clearance certificate, obtained from the police office in your hometown. On the basis of this certificate, the Ministry of Internal Affairs will issue Permission to Purchase and then will transfer the Title Deed to your name. The entire process generally takes 6 to 12 months.
Finalizing the deal is a core responsibility of your lawyer. When transferring the Title Deed, you will be required to pay VAT and tax on transferring title deed. VAT will be charged at 5% while the other tax will be charged at 3% of the full property price. You can find step by step recommendations regarding the preparation of the contract in our article about buying and formalizing property in Northern Cyprus.