In order to avoid any mistakes, there are important issues to take into consideration within the framework of law when real or legal persons of foreign nationality purchase a land and/or house and/or long-term lease in the TRNC.
As the legal representative of the construction sector, our institution underlines some of the important issues which are summarized below to guide those planning to invest in TRNC.
Under the framework of Property Acquisition and Long Term Lease (Aliens) Law 52/2008 which was adopted at the 10 November 2008 TRNC Republican Assembly Meeting, real or legal persons with foreign nationalities shall be entitled to purchase immovable property pr long-term lease in our country upon the approval of Council of Ministers provided that official procedures and legal applications are carried out.
Foreigners who intend to buy or lease an immovable property in the TRNC must apply to the Ministry of Interior in order to purchase the immovable property and to be legal right owner of the property and obtain the approval of the Council of Ministers on the basis of the investigations made by the Ministry. The approval process varies depending on the applicant’s status and is usually completed within 6 to 12 months.
Real persons or legal entities of foreign nationality have the right to own real estate or lease for a long term (Articles 8 and 9 of the relevant law) provided that they comply with the legal limitations and fulfill necessary legal procedures.
For long term leasing;
- The lease period can vary between minimum 10 (ten) and 99 (ninety nine) years;
- In the case that there will be a building construction on immovable property acquired through long-term lease, the relevant conditions must be included in the long term lease contract with the all the details;
- If the immovable property to be leased is a vacant land, its areameter cannot be more than 1 (one) donum (14,400 square feet or 1,338 meters). If there is 1 (one) property (dwelling or an apartment flat) on the leased land, the areameter of the land cannot be more than more than 5 (five) donums and a second dwelling cannot be built on.
- A foreign national is entitled to purchase a land not exceeding 1 (one) donum (14,400 square feet or 1338 square metres) provided that the land is vacant.
- They are entitled to purchase one property up to a maximum area of 5 donums providing that the property only consists of one dwelling. If the 1 (one) property to be purchased is in a building complex, there is no area limitation for the land in question.
- A foreign national is allowed to purchase only 1 (one) property or apartment flat. A husband-wife with the same surname are treated as 1 (one) person and their right to purchase is also limited to one.
- A foreign national is entitled to purchase only one private vacant land, land with a property or property within a building complex and not allowed to build or purchase another property/flat.
- A foreigner can transfer the ownership of a property he/she owns or rents to persons who are first or second degree blood relatives either by selling or mortaging, by acquiring informed consent following Ministry inquiry.
Foreigners who intend to purchase or lease immovable property in the TRNC must apply to the Ministry of the Interior in order to purchase an immovable property or to be legal right owner of the property and obtain the approval of the Council of Ministers following the investigations made by the Ministry.
It is obligatory that the contracts made with the foreigners who buy or lease immovable property in the TRNC apply to Land Registry and Cadastre Office of the district where the immovable propery is located not later than 30 days.
TRNC legislation does not allow foreigners to buy or lease immovable properties in certain areas (eg military territories) for security reasons. The legally acceptable distance for obtaining this right is 300 (three hundred) meters, provided that other legal requirements are also in compliance. It is therefore recommended that interested parties investigate the location of the immovable property before making any commitment and/or signing a contract.
In accordance with the Law, the Council of Ministers has the authority to limit the acquisition of immovable property by foreigners in special circumstances.
Again, in accordance with the law, the above-mentioned conditions regarding the acquisition or long-term lease of immovable properties by our foreign nationals are not applicable when they are in a partnership with a TRNC citizen who owns the %51 share of the company and they will also be exempt from restrictions and implementations.
Important Issues to Consider
It is recommended that foreign people to be careful in the following matters;
- The ownership status of the goods to be purchased must be learned and it should be known in advance whether the immovable property is self-contained or joint share.
- The issues such as whether there is a restriction on the immovable property like mortgage, levy etc. or whether there is any personal statement or circumstance obstructing the sale of the immovable should be checked from the relevant Deed and Cadastral Office.
- It is not recommended to work with people who are not reliable or specialist or companies that are not registered in related sector they are affiliated with. It is recommended that the structures built by contractors registered in the KTİMB (Turkish Cypriot Contractors Association) and construction Committee should be preferred.
- It is suggested that the contract should be approved in a registered Notary office and legal opinion should be obtained from a lawyer office before signing the contract in order to protect the legal rights of the persons involved in the contract between the property owner and the buyer.
- It is recommended that all technical specifications and details of the project related to the immovable property to be purchased first be learned and then the contract is signed. It should be noted that the contract is binding on both sides after the contract is signed.
- If the immovable property to be purchased is still in the construction phase, it is recommended that the contractor find out whether they have the construction license permits for the project.
- If the immovable property to be purchased is a ‘completed land’ property, it should be learned whether the property is a self-contained property and the transfer conditions should be learned. If the immovable property is still a ‘parceling project’, it should be ensured that the contracting firm has the permission of the construction license for the project.
- It should not be forgotten that in case of disputes between the parties regarding the immovable property, only if a contract is made in an accurate, comprehensive and legal manner, the situation can be transferred to the judicial authorities on the legal and healthy conditions and the buyer cannot be a victim.
- It should be understood clearly what the total sale price of the immovable to be purchased is included, and all applications and figures should be clearly stated in the agreement to be made between the parties. Everything promised to the buyer must be included in the contract and all fees related to the contract must be paid and the official application must be made within 30 days to the Deed and Cadaster Office.
Taxes and Fees
- 0.5% stamp cost according to the sales contract. (Paid by the buyer).
- 6% Immovable Goods Transfer Fee according to immovable property value. (Paid by the buyer).
- 5% VAT according to the immovable property value. (If the seller is a professional, VAT is paid by the buyer. VAT is not paid if the seller is not a professional).
- 4% Stoppage according to the immovable property value. (Paid by the seller).
The above suggestions, conditions and practices are indicative information and there is no binding on behalf of KTİMB. Please contact the TRNC Ministry of Interior and/or the Deed and Cadastral Office for detailed information.
( source Cyprus Turkish Building Contractors Association)