Purchasing property in North Cyprus off-plan is highly recommended, which means buying it before it is constructed or finished. During the initial stages of construction, prices are significantly lower, ranging from 30% to 60% cheaper compared to post-completion prices. This makes the early decision to invest in such properties particularly advantageous for potential investors.
By making an early purchase, you have a wider range of options within a specific project. Given the high demand, it is uncommon to come across readily available properties for immediate occupancy.
When considering off-plan projects, you evaluate both the region and the property itself, along with the developer’s plans and visual representations such as animations. It is ideal to have completed projects by the same developer as references, as they provide insight into the construction techniques and overall quality.
• Registration Fee: A registration fee of 0.5% of the contract price is required upon registering the sales contract.
• Value Added Tax (VAT): Upon completion of the transaction, a VAT of 5% of the contract price is payable. Some developers may calculate this in advance and include it in the total price.
• Real Estate Transfer Tax: The real estate transfer tax is 12% of the contract price. It is divided into two parts: 6% is paid at the time of registering the stamped purchase contract at the district land registry, and the remaining 6% is paid upon transfer of the title deed to the buyer’s name. It’s worth noting that the option of “Title Deed Transfer” including the 6% tax is discretionary. To determine if this option is beneficial in your case, it is advisable to discuss it with your lawyer. Another option to consider is purchasing the property through a trust, which can also provide tax savings. For more information on this option, consult your attorney.
• Solicitor’s Consultation Fees: Expect to pay approximately £2,000 as solicitor’s consultation fees.
• Transformer Contribution: On completion of the transaction, there is a one-time payment for water and electricity connection known as the Transformer Contribution. This fee typically amounts to around £3,000.
• Real Estate Tax: The annual real estate tax is approximately 2 TL per square meter (e.g., 200 TL or around 10 EUR for a 100 m2 apartment).
• Rental Income Tax: Rental income is subject to a tax rate of 13%. In many cases, large property developers already include this tax within the rental service booking fee, which is usually around 30% of the income.
Typically, when it comes to off-plan ventures, you can benefit from interest-free instalments spanning multiple years, at least until the project reaches completion. However, if you require extended financing options, it is advisable to get in touch with your financial advisor or consult your local bank in your home country. It’s worth noting that securing financing in North Cyprus can be quite costly, with interest rates ranging around 10-12%, and it may pose challenges for foreigners to obtain.
An alternative option commonly seen in the real estate industry is to place a deposit ranging from £2,000 to £10,000 when expressing interest in a property. This deposit acts as a reservation fee, effectively removing the property from the market for a period of 2-4 weeks and securing it at a fixed price, regardless of any subsequent price increases. Please note that this deposit is non-refundable and will be credited towards the total purchase price at the time of completion. Additionally, after consultation, it is possible to transfer this deposit to another property within the developer’s inventory, as many developers provide this flexibility to prospective buyers.
When purchasing a property in North Cyprus, the process involves engaging a solicitor who will provide comprehensive legal advice beforehand. By granting the lawyer power of attorney, they will handle all aspects of the property acquisition on your behalf. Your passport is the only document required.
Your solicitor will take care of various tasks, including drafting the contract, overseeing the purchase application, conducting a legal examination of the property, and facilitating the property registration process.
With the power of attorney, you have the ability to instruct your lawyer to proceed with purchasing a property from abroad whenever you wish. Once you have made the payment for the property and the solicitor completes the registration process, the property officially becomes yours, even if you have an ongoing payment schedule.
The answer to your question relies on factors such as the property and its location. Our team would be more than willing to offer you personalized advice directly at the site. In my own experience, I have observed a significant 75% surge in the value of two of my properties situated in North Cyprus within a span of 8 months.