North Cyprus Land/Property Buyers Guide

Quick Buyers Guide

The location of the TRNC at the eastern end of the Mediterranean is fast becoming the 'In' place to buy due to its excellent weather, friendliness and all-round good value. However, the buying of property in the TRNC has been dealt several hard blows by the international media in recent times. Contrary to popular belief, it is not difficult to purchase property. Indeed, it is important to note that the current checks in place actually serve to protect and benefit you, the customer.

Purchasing a Property

The processes involved in the purchasing of property depend entirely upon which type of property you decide is right for you.
In general, the process for freehold properties is as follows:

Decide upon a property and agree a price.
The validity of the title deed is checked and confirmed by a solicitor, who then draws up contracts setting out the terms of sale.
The contracts are then signed with the purchaser paying an agreed 10%-25% deposit, and a completion date is set.
Having been given Power of Attorney, the solicitor then attends to the completion in the purchaser's absence, including the application for the purchase permit from the Council of Ministers.
The Land Registry values the property for Stamp Duty purposes.
Once the purchase permit has been obtained, the remaining balance is due.
The vendor then signs the title deed into the name of the purchaser, stamp duty is paid.
The title deed is transferred and the sale is complete.

The process takes around six months to complete. Leasehold properties are also available, owned by the Ministry of Tourism, which grants long term leases of 49 years. The process of obtaining such a property is much the same as that for obtaining freehold property, but the purchaser must apply instead to the Ministry of Tourism for approval to buy.

Ownership

Properties in the TRNC fall into different categories of title deeds. It is imperative that you as a purchaser are familiar with them in order to assist you in the decision making process. We at Landmark will be happy to provide you with more information upon request.

Land Title Categories

Pre-1974 Clean Freehold title Land in Northern Cyprus which was owned before 1974 by Turkish Cypriots, English Expatriates and other nationalities is regarded as having 'clean freehold title' and therefore attracts a premium, when sold for re-development or as part of a completed development project.
Exchange Land. Many Greek Cypriots fled south in 1974 and Turkish Cypriots fled North, though in lesser numbers, both leaving behind them homes, land and buildings. The TRNC government have for many years operated an 'exchange' system (known as 'Esdeger' pronounced 'eshtare'), whereby Turkish Cypriots who left land and property behind in the South could register their 'loss' with the TRNC, and were instead awarded points enabling them to take over land and property in the North which was abandoned by Greek Cypriots fleeing south, on an 'exchange' basis.
Turkish Mainland Deed (TMD) Land. After the conflict, the TRNC awarded land which was unoccupied to war veterans or their families and invited citizens of mainland Turkey to re-settle in the TRNC in order to boost the population.
49 Year Leases. Some property has been offered by the TRNC on 49 year leases

Assessment

Pre-1974 Clean Freehold title Properties. Bought on this category of land will be preferred by buyers wishing to have no concern about potential liability whatsoever, in the event of there being a settlement between North and South. However, only a very small proportion of properties are being built on this category of land, so there is a premium built into the prices of these properties. This has a two fold impact - firstly it is a higher price to pay, but perhaps more importantly there is less potential for price growth, compared to those properties built on 'exchange' land.
The point to bear in mind is that once a final settlement has been reached the justification for the price differential currently relating to Pre-1974 Freehold Title will no longer apply. All land and buildings will all have the same status other than the short leasehold land, as above. The price of properties built on all 3 categories (a) (b) and (c) will therefore tend to rise to the same level, which will of course amount to a larger amount of growth where a property has cost less from the beginning.
Exchange Land. Should any Greek Cypriot wish to lay claim to a property in the North, after a political settlement has been reached, he or she would not be allowed to claim the property or the land back. Instead it may be appropriate for a claim for compensation to be made, against the person currently holding the land, or the building standing on it. However, all such claims will be handled by the TRNC government and no owner of Exchange land or property in Northern Cyprus will be approached by, or have to deal directly with. The Greek Cypriot claimant.
As a result of there being a settlement, property values in the North are expected, over time, to equate with those in the South, where they are currently 100% higher, or more. It has been estimated that any such compensation payment would not amount to more than 10% of the value of the property at the time.
For example, a typical villa in the North, currently costing £100,000 may attract a compensation payment of £10,000 but may well have risen by say £60,000 in value, as a result of the settlement. A similar property built on pre-1974 Freehold land may well have cost £130,000 and will have risen to the same approved value (£160,000) but will only have gained £30,000.
TMD Land . Whilst this should prove to enjoy similar status to (B) above once a settlement has been reached, it is generally regarded as less desirable than exchange land. This is because it does not carry the same 'moral value' attached to land for which an 'exchange' has been made under the current arrangements, or could be, under the terms of settlement.
49 Year Leases. This category of land should be avoided altogether, other than where its use would relate to a commercial enterprise.

Your guide to buying off plan

With the current dynamic market most new developments are sold well before constrution is completed, many buyers making their decision at an early stage even before construction starts. Buying off-plan in this way can provide a valuable investment opportunity. The prices of new developments will normally increase in stages as more of the development is completed and interest in the project grows. The earlier you buy during the construction of adevelopment the greater the potential returns. There's normally no need to pay all the money for off-plan up front. A deposit of £1000 is usually sufficient to reserve a property. Future payments are made in stages as more of the development is completed. Landmark Estates is able to advise you on the most suitabe projects to meet your investment needs.

Buying off-plan

Buying off-plan means reserving a property as much as two years before building is due to be completed and often before a single brick has been laid. The advantage to you, the investor, is that you secure the property at a discounted price, well below the market rate - and as the property is built, its value increases.
If you sell your property during construction you can expect a return on your investment that reflects an increase in the overall current market value of the property while having only ever tied up 30 or 40 % of the original discounted price. This is the usual route taken by investors to achieve maximum gains on investments and to free up capital to buy their next off-plan property.
As with all investments, timing is important and identifying the best units in the earliest phases of a high quality development in a good location is key to making a sound investment. Buying in the early days leaves ample time for optimum price increases as interest from other investors and homebuyers rises with the brickwork. Upon completion of the show home, your property will become saleable to all those buyers who will only buy a tangible product.

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