North Cyprus Property Taxes
Northern Cyprus is a separate entity from the Greek Republic of Cyprus and has its own taxation regime with respect to property.
Tax is primarily levied at the time of transfer of property, and there is no inheritance tax. There is a tax on the income from property rental at 10%.
There are 4 taxes that relate to property transfers and they are considered in the order in which they need to be paid.
Firstly, Stamp Duty is payable on exchange of Contracts of Sale. This is payable by the purchaser and is levied at 0.5% of the sales price. The tax should be paid within 21 days of exchange of contracts. If it is paid later, then it rises to 1.5%. Once Stamp Duty has been paid, then the purchaser can register the contract at the TRNC Land Office. This is done in order to safeguard the interests of the purchaser and prevents the vendor from double selling the property to someone else. Stamp Duty is payable for both off plan and resale property transactions.
Secondly, KDV or VAT usually falls due when a purchaser takes occupation of a property. The rate is 5%. The liability for KDV depends on the status of the vendor. If the vendor is a company or a professional person, meaning someone who appears to deal in property, then KDV is levied. If the property is a resale from a private owner, then there is no KDV liability.
Thirdly, when the vendor or his lawyer is ready to transfer the title deeds to the purchaser, Transfer tax is due. This has been 3% of the contract price for a first purchase and then 6% for any subsequent purchase by an individual. However, the rules were changed on 1 November 2011, and 6% is levied on all purchases by non TRNC nationals.
Fourthly, Capital Gains tax or Stopaj needs to be paid before the transfer of title deeds. This tax is due from the builder or developer with respect to off plan purchases. If the property is a resale from a private person, there is no Capital Gains tax liability. The calculation of this tax is complex, but it is around 5% of the contract price.
However, there are complications.
Before a title deed can be issued or transferred to a new owner, that owner needs to be in receipt of Permission to Purchase from the TRNC administration. This process can take up to 2 years, although a favourable outcome is normally expected, and is a requirement for all expatriate buyers.
The TRNC tax office has normally accepted the price as stated in the contract of sale since 2008. Recently, they have begun to make their own valuation of a property, based on location, build area, and plot size. This practice appears to be prevalent in the case of 4 bedroom villas, and larger properties.
This valuation exercise seeks to place a realistic valuation on a property for tax purposes. Several builders and their lawyers are in the habit of having two contracts of sale. There is often a main or official contract of sale, and a second or addendum contract relating to extras. This is a form of tax avoidance that the authorities wish to discourage.
by: Leslie Hardy The Oberoi, New Delhi - A Premium Luxury Business Hotel In New Delhi by:Sumana samuk Estimating Survival In Metastatic Breast Cancer My PERSONAL Experience With a Famous Medium Learn Hindi Online - Get The Original Taste Of Tourist Visit In India Get Back Your Ex Girlfriend: 5 Successful Tips Laser Spas Aren't Just For Women Anymore What Is Forex Trading Nanny Tax Information Anabolic Cooking Guide Review - Is It Worth The Money? Celebrating Christmas In Varied Parts From The World The Definitive Tourist Destination Guides For Acquiring A Cool Journey In Mexico City You Can Succeed With Christian Home Based Business Opportunities Find Out What Type Of Contractors Insurance Coverage Your Construction Company Needs