Law No. 39/2024 on the Acquisition of Immovable Property and Long-Term Leasing (Foreigners) (Amendment) Law, which entered into force on May 21, 2024, brought radical changes to the process of foreigners acquiring immovable property in the Turkish Republic of Northern Cyprus (TRNC). So, what do these changes mean for individual foreign buyers? In this article, we will discuss the articles of the new law that directly concern individual foreign buyers. Let’s discover together what has changed and what these changes mean for foreigners who want to invest in real estate in the TRNC.
New Immovable Property Acquisition Law: Changes for Individual Buyers
Purpose and General Scope of the Law
This amendment aims to protect the economic and social structure of the country by regulating the process of foreigners acquiring immovable property in the TRNC. The amendments to the law include important rules that are especially important for individual foreign buyers. Designed both to protect the rights of the local population and to balance the interest of foreign investors in the country, these amendments have brought many new regulations.
1. Initial Application and Registration Process
The law entered into force on May 21, 2024 and requires the application and registration of foreigners within a certain period of time:
- Application and Authorization: Foreign buyers must register the sales contract with the relevant land registry office before applying to the Ministry to purchase immovable property. This process must be completed within 6 months. This registration process is of great importance for the legal security of the immovable property.
- Construction License: Foreigners can apply with a construction license if the immovable property does not yet have a condominium or a condominium easement. This is a great advantage for projects under construction.
2. Immovable Property Acquisition Restrictions
Among the most significant changes for individual buyers are restrictions on the acquisition of immovable property. These restrictions determine the type and size of immovable property that foreigners can acquire:
- Land Acquisition: Foreign real persons may purchase a piece of land of no more than 1338 square meters (1 acre) and build one dwelling on this land. This restriction was introduced to prevent large land purchases.
- Apartment: Foreigners can purchase a maximum of one apartment. However, citizens of countries that recognize the TRNC can purchase up to three apartments. This is due to bilateral agreements with certain countries.
- Detached House: In order for foreigners to purchase a detached house, the area of the land must not exceed 3300 square meters (two and a half acres). This prevents larger detached houses from being owned by foreigners.
3. Taxes and Fees
The taxes and fees to be paid by foreigners in the process of purchasing immovable property have been subject to an important regulation:
- Service Fee: Foreigners must pay a service fee of 50% of the applicable gross minimum wage when applying for the purchase of immovable property. This fee is used to cover the financial burden of the application process.
- Security Investigation: A criminal record and security investigation are conducted at the time of application, and if the results are positive, the process is carried forward. The security investigation is of great importance for the security and public order of the country.
4. Right of Acquisition and Notifications
The law provides certain rules for foreigners who wish to purchase immovable property in excess of their acquisition rights:
- Acquisition Right Notification: Foreigners wishing to acquire immovable property in excess of the right of acquisition must notify the Ministry by paying a fee of 1% of the sale price. This notification includes half of the fees to be paid per immovable property during the sale process. This practice has been introduced to ensure the control of excess purchases.
- Notification Period: Those who fail to make this notification within 6 months must pay a fee of 3% of the sale price if they make a subsequent notification. This is intended as a deterrent measure for late notifications.
5. Special Cases and Exceptions
Some exceptions and exceptions are also provided for under the law:
- Investment Purchases: Foreign real and legal persons must deposit 20 million Euros in any bank operating in the TRNC in order to purchase immovable property for investment purposes. This amount must be used within 2 years. Investment purchases should be in the fields of tourism, education, health, industry, agriculture, technology and RD.
- Stub Transfers: Acquisitions of immovable property made before the date of entry into force of the law must be notified to the relevant authorities within certain time periods. These transfers must be carried out in accordance with the old and new provisions of the law.
6. Acquisition of Immovable Property by Foreign Companies
The purchase of immovable property by foreign companies is also subject to certain rules:
- Stub Transfers and Notifications: When foreign companies purchase immovable property, they must notify the Official Receiver and Registrar’s Office of the immovable property purchased within 6 months from the date of the stub transfer. In addition, the Ministry of Interior must be notified in case of a change of company director or shareholder.
- Investment Restrictions: Foreign companies must invest a certain amount in any bank operating in the TRNC. These investments must be used in the areas specified in the law.
The new law, which introduces many important rules and regulations, contains articles that should be considered for individual foreign buyers. Acting in accordance with the new law is of great importance in order to avoid potential legal problems. By complying with the law, it is possible to ensure that the immovable property acquisition process proceeds smoothly and safely.
Advantages of Investment with Özyalçın Construction
Özyalçın Construction’s wide portfolio and expert staff offer solutions for all the needs of investors. While exploring investment opportunities in Northern Cyprus, simplify your processes and maximize the value of your investments with the expertise and guidance of Özyalçın Construction. You can make safe and profitable investments by working with Özyalçın Construction to make the most of the opportunities provided by the Law No. 39/2024 on Immovable Property Acquisition and Long Term Leasing (Foreigners) (Amendment). You can review our projects on sale via this link, and for comprehensive information about the benefits of the law, you can read the circular article here.
