There are three main taxes involved purchase transaction these taxes are :
The Tax Office requires a copy of the Contract of Sale to be presented prior to the transfer of title. It will then calculate the VAT based on the Contract value of the property and is currently 5%.
Transfer Fees payable to the Land Registry Office just before the transfer of title takes place is usually paid by the purchaser and has currently been reduced from 6% to 3% of the property assessed value
Stamp Duty which is payable to the Tax Office and is calculated on the contract value of the property. Generally, Stamp Duty is payable by the Purchaser, although this can always be varied by the parties by an express clause in the Contract of Sale. All Contract of Sale must be registered at the District Land Office within 21 days of being signed and it is now compulsory for the Stamp Duty to be paid at therate of 0.5% before registration can take place After you have selected a property for purchase, recommended to meet with official registered in North Cyprus Solicitor. At the initial meeting with Solicitor, he will obtain the particulars of the property you have chosen to purchase and look at any informal agreements you have made with the vendor regarding the purchase price, payment schedule, and any items included within the sale. He will explain the procedure that you will need to follow including the taxes and fees you will need to pay and may be involved in investigations on your behalf to ensure the transactions are carried out securely and efficiently. This stage may also involve taking a power of attorney from you to ensure that Solicitor can act on your behalf to sign documents if you are away from North Cyprus for long periods of time.
The general principles of Solicitor services are as follow:
Solicitor will undertake a land registry search at the relevant Land Registry Office in order to confirm that the seller is the registered freehold owner of the immovable property, that the property is free from any liens, charges, or encumbrances. He will analyze the documents and check that the relevant building permits, construction permissions, and approvals have been obtained
In order to protect your rights and interests Solicitor will prepare a Contract of Sale tailored to your specific requirements identifying the particulars of sale, the completion dates, payment schedule, and any fixtures and fittings, responsibilities of both parties, and default penalties and compensation clauses. The contract will be given to you and the vendor for review and if both parties are satisfied with the contents the contract will be signed
Once Solicitor is satisfied with the results of the search and the contract has been signed and exchanged he will proceed to register the Contract of Sale at the District Land Registry office. It is compulsory for the registration of all contracts of sale for the purchase of immovable property at the District Land Register office within 21 days of the contract being signed and for the stamp duty to be paid at the rate of 0.5% of the property value before registration can take place. Registering the contract ensures that you are protected from the property being sold or transferred to a third party and from any subsequent liens being placed on the property