and Construction
PUBLICATIONS
PURCHASING PROPERTY IN THE
TURKISH REPUBLIC OF NORTHERN CYPRUS
Stamp duty– the tax, which is paid while registering the contact of sale to the Tax Office. The tax should be paid and the contract should be registered within 21 days from the date of signing of the contract of sale. The fee is 0.5% from the sale price stated in the contract of sale. VAT– The amount payable to the Vendor is 5% of the value of the purchased property, stated in the contract of sale.
Transformer charge– the amount depends on the purchased object. It includes the provision of electricity and water communications.
Annual property tax – It is calculated, basing on the rate of 1.25 Turkish Lira per 1 sq.m. of the covered area of the property. It is payable to the municipality.
Costs and Taxes payable during Transfer of Title Deeds
3 main taxes involved in any property sale transaction (different taxes apply to gifts of
property). These taxes are:
– The transfer fee which is payable to Land Registry Office
– The capital gains tax which is payable to the Tax Office
– The VAT which is payable to the Vendor
The Capital Gains is usually payable by the vendor and the transfer fee is usually payable by the purchaser (although this can be varied by the parties in the Contract of Sale). VAT, however, is subject to the terms of the Contract of Sale agreed between the parties (i.e. whether or not the sale price includes or excludes VAT).
The amount of tax levied depends on whether or not the vendor is a ‘professional vendor’ (i.e. whether the transaction is of a commercial nature or for profit). The table below indicates the percentages levied accordingly. The percentages for all three types of tax are percentages of assessed value of the property which is carried out just before transfer of title takes place. The valuation assesses the property in the state it is in at the date of the valuation i.e. if there is a new construction on the property, this will be included in the assessment of the value of the property.
Transfer Fee
The total transfer fee payable is 12% upon Land Registry’s valuation of the property purchased; with 6% paid during the contract registration and 6% paid during the title deed transfer. However, the amount to be paid for Turkish and TRNC citizens are different, where the purchaser must pay 6% of transfer fee, with the option of 3% exemption.