The Republic of Northern Cyprus invites foreign citizens to participate in the permanent residence program for an apartment purchase and investment. Real estate costs are not limited to just its value. When making a sales contract, you must pay state taxes.
DUTIES AND TAXES
When buying an apartment in North Cyprus, a foreigner must pay four basic fees:
- Transfer of title deed – confirms the investor’s object ownership, is introduced to the committee of land plots.
- VAT – payable at the tax service. Stamp – levied by the tax service. Capital gains tax is also paid to the tax service
- Stamp – levied by the tax service.
The real estate final price can vary: it depends on who pays the fees – the seller or the buyer. These issues are coordinated in the contractual relations registration process. Often the former owner pays capital gains tax, while the buyer pays stamp and transfer fees.
If the seller is an individual, the transaction is not subject to VAT, if it is a legal entity, it is taxed. If the transaction has a commercial basis, the value-added tax is also paid.
WHAT PERCENTAGE IS
The tax service calculates the fee amount for transfer of title deed, VAT and capital gains tax concerning the contractual property assessment. This requires providing the inspection with the sales contract copy. The tax office will calculate the fee amount at the contractual or assessed value.
- Transfer of title deed – 6% of the real estate total value. Each investor is entitled to a one-time rate reduction of up to 3%.
- Stamp payment – 0.5% of the price of the object under the contract. It must be paid within 21 days after the transaction is completed.
- The value-added tax – 5% of the price. Most sellers charge fees based on the apartment actual appraisal.
- Capital gains fee – if the former owner is registered as a legal entity, the percentage is 6.25 of the total amounts, if an individual is 3.5.
There are payments in the country for object maintenance:
- The annual fee is a fixed figure of 1.25 lira per square meter, payable twice a year: April and September.
- to maintain cleanliness – a fixed amount of 100 liras. For this price, roads are cleaned, plants are taken care of, and garbage is removed.
Thus, when buying a property in Northern Cyprus, the investor shares the duties’ payment with the seller. Our company helps to calculate payments and all expenses associated with the real estate purchase and maintenance.