Buying Property in North Cyprus. A guide to procedures and taxes

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Current Percentages for tax calculations.

 

Transfer Fee

The transfer fee is 6%. It should be noted however, that all persons have an option that can be used once only which reduces the percentage to 3%. Once this option has been taken up, all further transfer fees on future purchases will be at the full rate.

 

Capital Gains Tax.

This tax, as indicated above, is normally paid by the vendor and as such the percentage used for the calculation will depend on his/her status as a vendor. A private vendor will pay tax based upon currently 3.5%. A professional vendor will pay based upon a percentage figure of currently 6.25%. There is one exemption whereby a private vendor selling a house and land of not more than about one donum has a once only option for a tax free sale. When this option has been used the standard rate applicable at the time will apply. If you sell more than 3 properties in a year you will be deemed to be a professional vendor and taxed accordingly.

 

Stamp Duty.

The percentage is based upon a sliding scale according to date of payment. Currently this is:

0.5% of the contract price if paid within one month of date of contract.

Thereafter the rate increases in stages until after 6 months when it becomes 1.5%

 

VAT. Currently the rate of VAT for property transactions is 5%. Your Contract of Sale document should state if the vendor requires payment of VAT on the sale price on the date of completion. Check with your solicitor.

 

Summary.

Whether or not you have to pay VAT on your property purchase depends on whether or not the vendor is deemed to be a professional vendor or a private vendor. Also any requirement to pay VAT will be specified in your contract if applicable.

Normally Capital Gains Tax is not payable when you purchase your property as this is paid by the vendor. When selling, you can exercise your one off tax free option. For future sales as a private vendor you will pay the full private vendor rate. Professional vendors have no reductions rights and all sales currently attract the rate of 6.25%.

Normally the Transfer Fee and Stamp Duty are payable by the purchaser at the rates currently applicable. Check with your solicitor for any clauses that may vary this.

 

The Busy Bees Guide to procedures and taxes is intended to assist our clients and those having an interest in buying or selling land or property within the TRNC. To the best of our knowledge the information that we have assembled is correct at time of this publication. This information does not constitute any form of legal or professional advice and all parties engaging in property transactions are strongly recommended to engage a professional and independent solicitor before proceeding. Any liability for damage, harm or loss as a result of persons using this information is specifically excluded.