On 21st May 2024, the TRNC Government passed new legislation affecting the purchase of immovable property in North Cyprus. The law affects both new purchasers intending to purchase property in the future and existing purchasers who have already purchased a property prior to the law coming into force.

On 21st May 2024, the TRNC Government passed new legislation affecting the purchase of immovable property in North Cyprus. The law affects both new purchasers intending to purchase property in the future and existing purchasers who have already purchased a property prior to the law coming into force. Below is a summary of the main provisions of the law:

 

 

Provisions relating to purchasers who have already purchased property prior to the new law coming into force

 

1. Purchasers who have signed a Contract of Sale, but who have not registered their Contract of Sale at the Land Registry:

Foreign purchasers who entered into Contracts of Sale prior to the new law coming into force and who have not registered their Contracts of Sale at the Land Registry are required to register their Contracts at the Land Registry within six months of the date of the new law coming into force. In the event that the Contract of Sale is not registered within this period, the vendor commits a criminal offence and is liable to a fine of up to 500 times the gross monthly minimum wage. 

 

If you purchased a property through us after approximately May 2008, we would normally have completed the registration of the Contract of Sale on your behalf as standard practice as part of the purchase process and, in this case, no further action is required in relation to this point. 

If you purchased a property through us on or before approximately May 2008, we would have attempted to contact you in 2008 when the legislation enabling the registration of Contracts of Sale at the Land Registry came into force. If we did not receive the necessary paperwork and instructions from you to register your Contract at that time, your Contract of Sale might not be registered at the Land Registry. In this event, you will need to arrange for your Contract of Sale to be registered at the Land Registry within the six-month period stipulated in the law.  

 

1. Purchasers who have not yet applied for Permission to Purchase:

Foreign purchasers who purchased a property prior to the new law coming into force, but who have not applied for their permission to purchase, must apply for permission to purchase (up to the maximum entitlement which they are permitted to acquire under the law) within six months of the date of the new law coming into force. In the event that application for permission to purchase is not submitted within this period, the purchaser commits a criminal offence and is liable to a fine of up to 500 times the gross monthly minimum wage. 

If you have purchased a property, but your permission to purchase application has not been submitted or you have received emails from us reminding you to provide your police certificate or any other paperwork in order for us to submit your application for permission to purchase, please contact us urgently in order to ensure that your application is submitted within the stipulated period. 

 

1. Purchasers who have applied for Permission to Purchase and who are currently waiting for this to be granted:

Under the new legislation, foreign purchasers must complete their transfer of title within six months of their permission to purchase being granted by the Ministry of the Interior. In the event that a purchaser does not complete their transfer of title within this six-month period, their permission to purchase will be void. 

However, if, at the time that the permission to purchase is granted, there are still ongoing payments to be made by the purchaser under the terms of the Contract of Sale, the six-month period will start to run from the date on which the final payment is made. In this event, both the purchaser and the vendor are required to pay their transfer of title taxes within sixty working days of the permission to purchase being granted in order to avoid the permission to purchase becoming void.

In the event that permission to purchase becomes void as a result of the purchaser not having completed the transfer of title within the six-month period, then, if the purchaser wishes to re-apply for permission to purchase, the purchaser will be liable to pay a re-submission fee which will be double the amount of the normal application fee. If the purchaser fails, once again, to take title within six months of this second permission to purchase being granted, a third application by the same purchaser(s) in respect of the same property will not be accepted by the Ministry. 

If you have already purchased a property through us and have registered your Contract of Sale at the Land Registry, but are currently still waiting for your permission to purchase to come through, we will notify you once we have confirmation that your permission to purchase has been granted and provide you with information and instructions in relation to the transfer of title. 

 

1. Purchasers who have received Permission to Purchase, but who have not yet taken title

Purchasers whose permission to purchase was granted prior to the new legislation coming into force, but who have not yet taken title must take title within six months of the date on which the new law came into force. Failure to do so will result in the permission to purchase being void and the registration of the Contract of Sale at the Land Registry will also be void. In addition, the purchaser and vendor will commit a criminal offence and are liable, upon prosecution, to a fine of up to 500 times the monthly minimum wage.

However, in the event that it is not possible for the transfer of title to be carried out within this six-month period due to the fact that the final approval of the property has not been obtained or the individual title deeds have not been issued, both the purchaser and the vendor are required to pay their transfer of title taxes within sixty working days of the permission to purchase being granted in order to avoid the permission to purchase becoming void.

If you have already received your permission to purchase and you have made all of your contractual payments and your property has individual title deeds, you must contact us urgently to discuss the arrangements for completing your transfer of title within the stipulated period. 

If you purchased your property from a construction company and have received your permission to purchase, but are unable to take title due to the fact that you still have ongoing contractual payments to make and/or your property does not have final approval and/or individual title deeds, you will need to contact the construction company to arrange with them for the taxes payable by both parties to be paid within the stipulated period of sixty working days. 

If you purchased your property from a private individual and have received your permission to purchase, but are unable to take title due to the fact that you still have ongoing contractual payments to make and/or your property does not have final approval and/or individual title deeds, please contact us to make arrangements for the taxes to be paid within the stipulated period of sixty working days.  

 

1. Purchasers who have purchased more than one property in their name

Foreign purchasers who, prior to the new legislation coming into force, had purchased more property than they are entitled to purchase under the new legislation must notify the Ministry of this situation within six months and must pay a fee upon notification of 1% of the Contract price. 

If the Ministry is not notified within this period, the fee payable on notification after this date will be 3% of the Contract price. 

Such purchasers will then have twenty-four months from the expiry of the six-month notification period to transfer these Contracts of Sale out of their names. 

Any Contracts of Sale which are not harmonised with the law within this period will be void. 

On the transfer of any Contracts of Sale in this way, a fee of half of the amount of the capital gains tax (stopaj) payable by the seller will be payable.  

In the event that such Contracts of Sale are not transferred or harmonised with the new law in this way within this period the purchaser and the seller commit a criminal offence and are liable to a fine of up to 500 times the gross monthly minimum wage. 

If you have purchased more properties than you are entitled to purchase under the new law, please contact us to discuss the arrangements for notifying the Ministry and for transferring the excess properties.

 

Provisions relating to Trust Agreements

 

From the date of the new legislation coming into force, non-citizens are no longer permitted to enter into trust agreements to purchase more properties than they are entitled to purchase under the law. In the event that a trust agreement is entered into in order to enable a non-citizen to acquire more property than they are entitled to acquire under the law, the parties to the agreement commit an offence and are liable to a fine of up to 500 times the gross monthly minimum wage. 

Any trust agreements which were entered into before the date on which the new legislation came into force must be registered at the Land Registry within 75 days of the new legislation coming into force. Any such agreements which are not registered within this period will be void. In addition, the purchaser and seller commit a criminal offence and are liable to a fine of up to 500 times the gross monthly minimum wage. 

If you purchased a property using a trust company, you must contact the operators of the trust company to discuss the arrangements for registering the trust agreement at the Land Registry within the stipulated time period.

If you entered into a private trust agreement with a family member/friend, please contact us to discuss the arrangements for registering the trust agreement with the Land Registry. 

 

Provisions relating to new purchasers 

 

Purchasers intending to purchase property in North Cyprus after the introduction of the new law are now subject to the following rules:

From the date of the new legislation coming into force, non-citizens can purchase the following:

 

-       In the case of vacant land one single plot up to a maximum area of 1338m2

 

-       In the case of an apartment, one single apartment (or three apartments in the case of citizens of the Republic of Turkey)

 

-       In the case of an individual house, one single house with a plot size of no more than 3300m2

 

Foreign purchasers cannot purchase agricultural or forestry land. 

 

Anyone who carries out any procedure in excess of the acquisition rights set out in the law commits a criminal offence and is liable to a fine of up to 500 times the gross monthly minimum wage.

 

From the date of the new legislation coming into force, non-citizens are no longer able to purchase properties which have shared title deeds. However, if the property is an apartment or individual house, this can be purchased by up to three co-owners on a shared title basis. 

 

In addition, the sale and transfer of any properties which do not have individual or storey easement title deeds (known as ‘Kat ?rtifak Koçan?’ in Turkish) is no longer possible. Contracts of Sale for any such properties would be considered void.

 

Anyone who sells property which has shared title to a non-citizen or anyone who makes a Contract of Sale in relation to a property which does not have an individual or storey easement title deed or anyone who carries out or assists in the carrying out of the sale or transfer of a property which does not have an individual deed or storey easement deed commits a criminal offence and is liable to a fine of up to 500 times the gross monthly minimum wage. 

 

In the case of new developments which do not already have building permits in place or in respect of which building permits have not already been applied for prior to the law coming into force, a minimum of 20% of the units must be sold to nationals of the TRNC or the Republic of Turkey and no more than half of the units can be sold to first degree foreign purchasers who are first degree relatives of each other or to foreign purchasers of the same nationality. 

 

No more than 7% of the land area of each area and no more than 3% of the land area of the whole country can be sold to non-citizens. 

 

The Ministry of the Interior has the right in situations where there are any concerns around national security, public interest and public order, to publish a directive in the Official Gazette, declaring that non-citizens cannot acquire (other than by way of inheritance) property in a particular area stipulated in the directive.  

 

Previously, it was the case that companies which had a majority of TRNC citizens as the shareholders and directors were considered ‘local companies’ and were not subject to the restrictions on the purchase of property. However, under the new legislation, any company in which any shares are owned by non-citizens and/or in which the majority of the directors are non-citizens and where the majority of the voting rights are in the hands of persons acting on behalf of foreign nationals are now considered to be ‘foreign companies’ and are subject to the restrictions set out in the new law in relation to the acquisition of property.

 

All new Contracts of Sale entered into after the date on which the new legislation came into force must be registered at the Land Registry within seventy-five days, otherwise they will be void.