What are Title Deeds and how does it work in Cyprus?

Some time ago Ilya had already planned to obtain a new migration status for his family in Cyprus and now turned to us for a Cyprus residence permit. North Cyprus was chosen in favor of us for several reasons:

1. quick processing of the application;
2. possibility to include family members in the application (Ilya planned to move with his wife and minor daughter);
3. favorable taxation conditions (Ilya owns his own business and expects to take advantage of tax optimization opportunities).

Another argument in favor of obtaining a residence permit in Cyprus - quality medicine and education, as well as the widespread use of English, which simplifies adaptation after the move. 

 Ways of obtaining a residence permit in Cyprus

You can get a residence permit for Northern Cyprus in several ways:

• through the purchase of real estate;
• through employment in a local company;
• by registering your business;
• when studying in local educational institutions.

In this case, we have chosen to obtain a residence permit in Cyprus through the purchase of real estate, because in this case, the cost of time is minimized: registration of a residence permit takes about two weeks after the transaction. In addition, the legislation does not require a minimum amount of investment and the characteristics of the object, which means that the client has more freedom of choice.  

Buying real estate in Cyprus

However, buying real estate in Northern Cyprus has its own peculiarities. In particular, the country has a system of “titles” of objects (title deeds), which determine whether a particular object or plot of land can be sold and who can be its buyer. Until 2013, Cyprus had restrictions for non-residents, which made it difficult for foreign buyers to obtain full title to land that would allow them to lease, sell or inherit the property.

The restrictions were lifted in 2013, but it is not easy to understand the process of obtaining an individual title on your own. Our lawyers have taken on this task, as this is not the first time they have bought a property in Cyprus and they can carry out this procedure in a short time.

The procedure for buying real estate in North Cyprus is as follows:

1. Having chosen the object, the investor executes a preliminary contract, which fixes the basic conditions of the transaction.
2. After that, a deposit is made, the amount of which usually ranges from 2000 to 10 000 euros, depending on the amount of the transaction.
3. The investor pays stamp duty (0.5%) and registers the transaction with the tax and cadastral authorities of Northern Cyprus.
4. Then the buyer pays the part of the sum agreed in the contract (down payment in case of buying the object on credit).
5. Also from the transaction is paid VAT in the amount of 5%. 
6. Within three weeks, the buyer receives the title deed - a document confirming the ownership of the property.

Thus, when buying real estate in Cyprus, taxes are paid as follows: the buyer pays stamp duty and VAT, and the seller - capital gains tax (4%).

After studying the information collected by our consultants about the housing market in Northern Cyprus, Ilya chose a house in the administrative district of Tricomo. Housing here is somewhat cheaper than in Nicosia or Famagusta, which attract a large number of tourists. In addition, the area has a large number of British residents, good schools and a variety of leisure activities.

As a result, the client was able to receive the keys to his own home in Cyprus just a few months after his application. Ilya plans to contact us again in the near future to purchase an apartment in one of the tourist areas to generate rental income.