Taxes and Expenses When Buying Real Estate in Northern Cyprus

Investing in real estate in Northern Cyprus can be profitable.

But it is essential to consider all taxes and expenses associated with buying, owning, renting, and selling property.

Property prices in Northern Cyprus vary significantly depending on the type of property and its location. For example, apartment prices start from €50,000.

While villas can cost from €150,000 or more, depending on the quality of finish and proximity to the sea.

• Property Transfer Tax: This tax is 3% of the property’s value and is paid by the buyer upon registering the title deed in their name
• Title Deed Registration Fee: This fee is approximately 0.2% of the property’s value and is charged for the official registration of property rights in the land registry

• VAT (Value Added Tax): When buying a new property in Northern Cyprus, a VAT of 5% of the property’s value is also charged. This tax is paid in a lump sum at the time of the transaction registration

Property owners in Northern Cyprus are required to pay an annual property tax. This tax ranges from 1 to 1.5 Turkish Lira per square meter, depending on the location and type of property. 

The tax is calculated based on the property’s area and is paid to the local municipalities.

If an owner decides to sell their property in Northern Cyprus, they must pay capital gains tax. 

For residents, the capital gains tax is 3.5% of the difference between the purchase and selling price of the property. For non-residents, the tax rate is 7%.

• Utility Bills: These include payments for electricity, water, gas, and waste disposal. The amount of these payments depends on consumption and can vary seasonally
• Property Insurance: While not mandatory, it is recommended to insure property against fire, flooding, and other risks. The cost of insurance depends on the type and value of the property

• Maintenance and Repairs: These costs include regular maintenance, minor repairs, and upgrades. Owners of properties located in residential complexes may also have to pay fees for the upkeep of common areas

Property owners who rent out their property in Northern Cyprus are required to pay tax on rental income.

The tax rate is 10% of the gross rental income. This tax must be declared and paid annually.

The return on investment (ROI) from renting out property in Northern Cyprus can be quite high. The average rental yield ranges from 5% to 8% per year.

It depends on the property's location, condition, and demand in the rental market. High returns are typical in popular tourist areas where there is consistent demand for rental housing.