If you’re considering buying a home in northern Cyprus, it’s important to understand that feelings run high on both sides of the Green Line.
Turkish Cypriots and those selling property there (many of them British) will welcome you and often play down the potential problems. Property sales to foreigners benefit the ailing Turkish Cypriot economy and increase international acceptance of Turkish controlled northern Cyprus. On the other hand, Greek Cypriots, perhaps understandably, point out the illegality and immorality of buying property or land that’s rightfully owned by Greek Cypriots. There are many Greek Cypriots living in the south who are refugees from the north and who believe that even visiting the north while it’s still under Turkish control is morally wrong.
Morals aside, if you decide to buy property in northern Cyprus, you must ensure that you will have legal ownership of the land and property that’s being sold to you, even if Cyprus is reunited.
It’s essential to check the title deed of a property before buying it. When Greek Cypriots were forced to leave their homes in the north, their properties and land were taken over by the Turkish authorities, who used them to house Turkish settlers from the mainland and Turkish Cypriot refugees who had moved to the northern Cyprus after the invasion of 1974.
It’s vital that you make absolutely sure you aren’t buying property or land that was appropriated from a Greek Cypriot. If you do so and Cyprus is reunited, the original owner could reclaim the property or land and you could be left with nothing.
The European Court of Human Rights has ruled that Greek Cypriots are the ‘only true and lawful owners’ of their appropriated land and will never lose their legal title. In a highly publicised case, a British couple has been ordered to knock down the house they built on land owned by a Greek Cypriot before 1974. According to EU law, the owners of the land could have the judgement enforced in the UK and the couple could lose their home there too.
As well as having the status of the title deed confirmed by an independent lawyer before you agree to purchase, you should do so yourself by asking to see the deed at the Lands Office in North Nicosia. There are three possibilities: the property has no title deed; it has a deed with a number prefaced by the letters ‘TRNC’; or it has a deed with only a number. The status of each of these types of property is explained below.
TRNC Title Deed
A TRNC (referring to the Turkish Republic of Northern Cyprus) title deed (called in Turkish a kesin tasarruf or ‘absolute possession’ title deed) is the one most commonly found in northern Cyprus. It relates to property or land which was in Greek Cypriot ownership before 1974. When Turkish Cypriot refugees came to the north after the invasion, the authorities assessed the value of what they had lost in the south and awarded them a certain number of points. These points often allowed them to take possession of a Greek Cypriot house as a form of compensation. In return for the points, they had to sign over their properties in the south to the TRNC government, who held them pending a negotiated settlement between the two sides. Properties may have also been ‘given’ to settlers from the Turkish mainland and it’s also believed TRNC properties were issued to military servicemen as a reward for their services on Cyprus.
If the number on the deed has TRNC in front of it, you should be very wary of proceeding with a purchase.
The authorities and many estate agents may advise you that properties with a TRNC title deed are safe to purchase. However, these title deeds are recognised only by Turkey and by the government of northern Cyprus, and their purchase is considered illegal by all other authorities.
No Title Deed
If there are no title deeds for the land or property that you intend to buy, it could have been Turkish- or Greek Cypriot-owned before 1974. However, the absence of title deeds mean that its ownership is questionable. Properties without title deeds are often available at ‘bargain’ prices, but a bargain could turn out to be an expensive disaster if the real owner returns to claim after Cyprus’ reunification!
Purchasing a property without title deeds is illegal and is considered very unsafe, even by those estate agents who consider TRNC titles safe.
‘Clean’ Title Deed
The only type of totally secure title deed (known as a clean freehold title deed) is one issued before the Turkish invasion, which won’t be prefaced by the letters ‘TRNC’. These are internationally recognised deeds, but unfortunately they’re virtually impossible to find.
Once the price of a property has been agreed, a lawyer will draw up a sale contract detailing the terms of the purchase and any conditions, and both parties must sign it. It’s likely that the contract will be in Turkish so (unless your Turkish is fluent) you will need to get it translated so that you understand exactly what you’re signing. If you’re using one of the many British estate agents in northern Cyprus, he will usually arrange this for you.
You will be asked to pay a 10 per cent deposit on signing, and your lawyer will then apply to the Ministry of the Interior for permission for you to buy the property. This can take several months but, once permission has been granted, the balance is payable and the transfer of the title can take place.
Normally a buyer pays 6 per cent of the purchase price in tax and the seller pays 3 per cent (on a first sale) or 6 per cent (on subsequent sales). Generally, the purchase price is under-declared to reduce tax liability although this is illegal. VAT isn’t charged on house building as it is in the Republic of Cyprus, although in February 2005 there was a report in a local newspaper that the government was planning to charge foreign buyers VAT at 15 per cent on new properties. Check this carefully before you commit to purchase a property.
If you decide to buy in northern Cyprus, it’s advisable (although no guarantee) to use an agent who has long-standing experience of the property market in the Turkish Republic of Northern Cyprus and knows the possible pitfalls facing foreign buyers. There’s no shortage of estate agents and more and more have been setting up business in the north as the property market has shown increasing signs of potential growth, but estate agents in northern Cyprus aren’t licensed by law as they are in the Republic of Cyprus. Exercise extreme caution and check the credentials of any estate agent you use. Talk to other expatriate house buyers and get their recommendations.
This article is an extract from Buying a Home in Cyprus from Survival Books.