Title Deed Transfer Tax

Title Deed Transfer Tax update in North Cyprus: In Northern Cyprus, the TDT rate is currently 3%, but it may vary depending on the type and value of the property. The tax is usually paid by the buyer, and it is one of the expenses that must be covered during the property transfer process of immovable property, such as land, buildings, and apartments.

On 27 January 2023, the TRNC Legislative Assembly passed amendments to the law on Transfer Tax, which will affect those buying property on the island. In accordance with the amendments, foreigners, except Turkish citizens, are now required to pay a 12% transfer tax in order to get title deeds transferred into their names.

What is Title Deed Transfer Tax?

Title Deed Transfer Tax is a tax paid by the buyer when purchasing a property. In North Cyprus, this tax is calculated based on the value of the property, and it is typically paid at the Land Registry office during the transfer of the title deed and is paid in addition to other fees such as stamp duty and legal fees. The Title Deed Transfer Tax is a one-off payment and is not an annual tax.

This payment will be regardless of whether it is the first purchase or not. However, foreign buyers who are purchasing property for the first time may be eligible for a reduced rate of Transfer Tax, as part of the government’s incentives to attract foreign investment to the island.

What is the New Tax Rate?

Should the contract be canceled before the title deed is transferred into the name of the purchaser, the 6% transfer fee which was paid upon registration would be non-refundable. The new tax rates are expected to come into effect from 1st May 2023 and will result in an increase in the overall cost of purchasing property in North Cyprus.

The current Transfer Tax rates in North Cyprus are based on a sliding scale, ranging from 3% to 6% of the property purchase price. However, the new rates will increase the lowest tax bracket from 3% to 5%, and the highest bracket from 6% to 7%. This means that property buyers in North Cyprus can expect to pay more tax on their purchase depending on the purchase price.

The decision to increase the Transfer Tax has been made in order to generate more revenue for the North Cyprus government. The government has stated that the increase will help to fund infrastructure projects and improve public services on the island. The Transfer Tax is a significant source of income for the government, and the increase is expected to generate additional revenue of around 20 million Turkish Lira per year.

Impact on Property Buyers

It is important for property buyers in North Cyprus to be aware of the new Transfer Tax rates, and to factor this into their budget when purchasing a property.  The increase in Title Deed Transfer Tax will impact property buyers in North Cyprus in a few different ways. Firstly, buyers will need to factor in the additional tax when budgeting for their property purchase. This means that the overall cost of purchasing a property in North Cyprus will be higher than before.

Buyers should also ensure that they have obtained accurate information regarding the taxes and fees associated with purchasing property in North Cyprus, and should seek professional advice from a lawyer or property agent. Additionally, the increase in tax could make it more difficult for some buyers to qualify for a mortgage.

Banks and lenders typically require buyers to have a certain amount of money saved for the down payment and closing costs, and the additional tax could make it harder for some buyers to meet these requirements. Please contact Senilk Real Estate to be assisted in buying property in Northern Cyprus. Email: info@senilkrealestate.com or WhatsApp: +905338502662.