PROCEDURES FOR BUYING A PROPERTY

Once you decide on the property you would like to buy, make sure to pay the reservation fee to secure the property and have it removed from the market. If you are out of North Cyprus and would like to reserve a property from abroad, it is necessary to complete a wire transfer of the funds, as foreign cheques take a few weeks to clear. If you are present in North Cyprus, it is possible to pay via credit card or cash. By reserving a property in North Cyprus, you will secure it for a period of one month, which allows enough time for the sales contract to be drawn up, agreed and signed. Before moving on to the next step you should also make sure that you have reached an agreement with the Developer on the price and any extras that you may need.

It is essential to hire a North Cyprus-based solicitor to buy property in North Cyprus. There are a number of reputable solicitors to choose from. The solicitor’s role is to advise you, release payments upon your approval to the Developer you are buying from, apply to relevant Government Offices for your permissions to buy a property in North Cyprus, act on your behalf in your absence with the Power of Attorney, confirm title deeds including all governmental documentation, and ensure that a proper Contract of Sale is drawn up and made between you and the Developer. Solicitor fees may vary but are roughly around 1500-2000 GBP.

A contract of sale is then drawn up by your solicitor, setting down the terms of sale, i.e. property details, specifications of the property, site plan of the property, governmental site plan of the land in North Cyprus, floor plans, price, payment terms, timescale, vendor, purchaser and any extra requirements. In many cases, the purchaser returns home, the contract is then e-mailed or faxed to the purchaser to review and only once the purchaser has approved the solicitor will proceed with signing it in your absence and on your behalf. The purchaser should also receive a final signed copy for the records.

Once the contract is signed the purchaser pays the first installment to the Developer. Both parties are expected to then follow the payment schedule recorded in the contract of the property sale. Note that any reservation deposit made before the signing of the contract is deducted from the first installment.

A permit to purchase from the Council of Ministers in North Cyprus is then applied for by your solicitor. This may take around 12-18 months to be clarified.

Once permission is granted, the purchaser is entitled to register his or her name at the Land Registry as the registered legal owner of the North Cyprus Property. Again, in the absence of the purchaser, a Power of Attorney will allow the solicitor who will, on the client's behalf, to deal with all these formalities. Most likely the solicitor will notify you when permission has been granted and he/she will then fill out all of the necessary land registry valuation forms for the valuation of the property that you have purchased.

It is usually at this point that taxes will be payable. The taxes are calculated based on the land registry valuation (usually the open market value of the property on the date the transaction took place) and are currently at the following rates:

• Land Registry Transfer Fee at 12% (%6 will be paid on registration of contract and %6 will be paid on transfer of title deed)

• VAT at 5%

• Stamp Duty at 1.5% (stamp duty is payable at 0.5% of the contract value if paid within 1 month upon signing the contract. If it is not paid within this time, it will increase to 1.5%. You will have the option to pay upfront or pay during the transfer of the title deed with a higher rate).

The sales process will come to an end when all of the above taxes are paid and the title deeds are registered in your name.