Property Tax Advantages in North Cyprus
North Cyprus is the most preferred real estate investment source of recent times with its affordable but luxurious housing sector and low property taxes. It is called a popular tax haven among international investors now.
The Guide to Taxes for Property Transactions in North Cyprus
As we said, the property tax in North Cyprus is relatively low, and when the exchange rate is taken into account, real estate investment becomes even more profitable.
To provide general information, there are two types of taxes when buying real estate in Cyprus; the fixed taxes paid at the time of property purchase and the annual tax.
The real estate taxes in North Cyprus when you buy a property:
It is a 0.5% tax paid to the tax office at the contract stage for the stamping and formalization of the contract. It is based on the contract value of the property. In most cases, buyers pay the stamp fee determined by the terms of the sales contract. The contract must be registered with the Land Registry Directorate within 21 days from the signing, and this fee must be paid first in order for the contract to be registered.
Value Added Tax (VAT)
In new housing projects, you pay 5% VAT over the price determined by the builder. You can get a chance to buy a house without paying VAT on resales.
Title Deed Transfer Fee
The citizens of North Cyprus and Turkish citizens pay a 6% title deed transfer tax when purchasing real estate in North Cyprus. On the other hand, if you are a North Cyprus citizen and you are going to buy real estate for the first time, you will pay a title deed fee of 3% once.
All other foreign citizens pay a 12% title deed transfer tax. A sales contract is made for 6% of this total fee, and the remaining 6% is paid after the title deed is received.
The property valuation is made by the relevant authorities in North Cyprus, regardless of the sale price or the value to be stated by the construction company.
Capital Gains Tax
It is selling property in North Cyprus tax paid by sellers. A tax of 4% is paid if the seller is a for-profit firm, and 2.8% if the seller is a non-profit amateur seller. Non-profit sellers are exempt from this tax for once in their lifetime.
Transformer Contribution, Infrastructure, and Connections
It is requested for new residences’ telephone, electricity, or water infrastructures, ranging between £1500 - £2500. It is offered to be paid before the home delivery.
After Buying a Property: The Annual Tax
The annual immovable property tax in North Cyprus is very cheap as it is calculated on the minimum square meter. It can be paid in two installments per year (in April and October).
The tax per square meter of residential properties up to 120 m² is 1.85 TL. In other words, the annual tax for a 100 m² property is 185 TL.
The tax per square meter of residential properties over 120 m² is 2 TL but the calculation is a little different.
For example, 120 m² of an apartment of 150 m² is calculated from 1,85 TL. The remaining 30 m² is calculated from 2 TL. In other words, the annual tax for a 150 m² property is 282 TL.
120 x 1,85 = 222 TL
150 - 120 = 30 x 2 = 60 TL
222 + 60 = 282 TL
* This fee is determined by the municipality. It may change every year.
How Much is Commercial Property Tax in North Cyprus?
It is pretty profitable that business owners pay only a 1% fee on corporate income. To add:
- There is no fee on dividends paid by international companies to their shareholders, VATs, or customs duties.
- Northern Cyprus does not support the Automatic Exchange of Information (AEOI) for tax purposes. So you do not need to provide account information to other countries.
- There is no withholding tax on dividends paid to offshore companies in Northern Cyprus.
- The minimum paid-up capital is 20.000 €.
- The only cost is to renew the business license for 5.000 € each year.
- An offshore company in Northern Cyprus can open any number of bank accounts in foreign currency.
- North Cyprus is not a member of the European Savings Tax Directive. You can legally hold your money in offshore accounts and bring what you need.
- There are no restrictions on the movement of capital.
You can double your income by buying a house and starting a business in Northern Cyprus.
Is it Worth Buying a House in Cyprus?
Yes, because, as you can see above, the costs are very cheap compared to many countries. Moreover, many housing projects offer easy payment plans, considerable discounts, and great deals.
After you buy one, you can use the house, and during this time, you can renovate your house and increase the value of your home added by the market. Thus, when you decide to sell your home, you can get the highest offers in the market.
Another profitable idea is to rent out your house via Airbnb or Missafir. It will help you boost your rental income, and you do not need to worry about whether you can find a tenant easily. It is an island visited by thousands of tourists every season. You will definitely have a tenant in both summer and winter.
In addition to the gain, it is one of the ideal locations in the world whether you want a summer house, a place to live or retire in the future. There is definitely a city on this island that is ready to maximize whatever your motivation is; peace, profit, happiness, or just living a good life.
There are 6 cities in total; Lefkoşa, Girne, Gazimağusa, Güzelyurt, Lefke, and İskele. To find out which city is more suitable for you, you can check Where to Buy a Property in North Cyprus?.
It is a beautiful island full of sandy beaches, historical monuments, and scenic beauties. Each city is also famous for its entertainment facilities, different types of social amenities, and lively nightlife. Here the world of fun reigns, where you can escape from reality.
If you want to be a part of this fun and lucrative investment world, you can call our experts to learn more about the buying process and North Cyprus’ property taxes in detail.