An Overview Of the Legal Aspects Of Buying Property in North Cyprus
When purchasing land or property – including investments regarding a North Cyprus property development business – important decisions must be made. So for all of our properties and our clients, we recommend the input of a properly qualified and reputable local lawyer. The British High Commission in Nicosia has a list of preferred lawyers. The Customer Service Team at Fraser Meridies also holds a list of recommended lawyers.
Please email us at at info@frasermeridies.com
Title deeds for North Cyprus Property
In relation to the purchase of land or a house, the first issue which has to be clarified is the type of title deed, called a koçan (pronounced ‘kojan’), which relates to all legitimate North Cyprus properties in sale to foreign investors. Within the North Cypriot legal system there are various types of title deeds, the differences essentially arising from past events and legal changes in Cypriot history. The property alternatives with different deed types are as follows:
a) British or other foreign ownership pre-1974 title deeds. These deeds were in force before the partition of the Republic of Cyprus and North Cyprus. Such titles are highly sought after as they are in short supply and consequently are expensive. Purchase requires permission of the Council of Ministers.
b) Turkish Cypriot owned pre-1974 title deeds. These are often referred to as Turkish Title, and non Turkish Cypriots are limited to the purchase of one donum of land each. A married couple counts as one person. Purchase of such a property requires the approval of the Council of Ministers.
ci) Exchange Title deeds (Esdeger) relating to Greek Cypriot properties owned pre-1974. Such property was awarded on a points system to Turkish Cypriot refugees from the south in compensation for the (approximately equivalent) property they had left behind in the South of Cyprus after partition of the island into North Cyprus and the Republic of Cyprus in 1974. The deeds of the abandoned southern properties were retained by the government of the Turkish Republic of Northern Cyprus (TRNC) for use in future settlement negotiations with the south, so that any properties in North Cyprus with such deeds have a tantalizing historical resonance.
c ii) Title deeds relating to points-based Greek Cypriot properties (mainly land) owned pre-1974 and awarded to Turkish Cypriots and mainland Turkish immigrants by the TRNC government.
c iii) Exchange Title deeds with no owner pre-1974. Such agricultural land has been registered since 1974 as exchange title deed status.
Based on the 1983 TRNC Constitution, all such deeds were amended and named as TRNC Title Deeds, and this applies to all properties in North Cyprus with deeds of this type. Such deeds are freely transferable to non-TRNC citizens, but Council of Ministers approval is required and the ‘one donum’ land rule applies.
Purchasing North Cyprus property – Legal Tips
Prior to purchase ALWAYS:
Ask for a copy of the title deed, and ask to see the original from which the copy has been taken. Take advice on the type of Koçan you have. Check the sheet plan – plot references and the site plan, look at the site plan and ascertain that it relates in shape and boundaries to the property.
If you are intending to build, you should check the construction availability (from the State Planning Office), make a land search to ascertain if there is a deed, what kind of title deed it is, and whether there is any encumbrance on it (from the Land Registry Office).
Always make and sign a contract before making any payment. Do not necessarily accept the wording of a contract presented to you – have it checked out by your lawyer and amend if necessary before signing.
Once a Property Has Been Selected
After deciding on a property you wish to buy, a land search should be made and subsequently an acceptable contract should be signed with the vendor. This may include the payment of a deposit.
It should be noted that according to Property Purchase (Foreigners) Law and the related regulations (Law No. 109), purchase by non-TRNC citizens is limited to one donum (which is a measure of land equivalent to 1600 square yards, 1,338 sq. meters or 14,400 sq. ft., 0.336 acre) of land (unless you form a company or constitute a trust with a local person).
A permit to purchase from the Ministry of the Interior is then applied for. This is usually done by your solicitor. Make sure you receive the application number for this permit, as some solicitors are very tardy in making this essential application. This permission may take between six and eight months – and sometimes longer – before the Council of Ministers approves it.
Once this permit has been issued, the purchaser and the vendor are entitled to transfer ownership. The purchaser can register his/her name at the land registry as registered legal owner of the property. The purchaser would need to be in Cyprus to sign the relevant papers on the change of ownership and of course to pay (the balance of) the purchase price to the vendor. In the case where the purchaser is not in Cyprus at the time of the transfer, a power of attorney may be issued in favour of the purchaser’s local solicitor and the property transfer may be executed in this way.
A purchase tax is applicable on all freehold property at 6% of the value of the property as assessed by the Land Registry Office, payable before the new title deed is issued, and in addition a charge of 1% of the 6% is payable to the municipality where the property is located.
