The circular includes provisions on the application of Law No. 39/2024 on the acquisition of real estate and long-term rental by foreigners, which was published in the Official Gazette on May 21, 2024. These provisions apply to the Ministry and all district departments of the cadastre.
If, at the time of the entry into force of the law, the transfer of real estate has already begun in any district department of the cadastre, it will be completed according to the previous rules, without taking into account the provisions of the new law.
Purchase and sale agreements concluded before the entry into force of the law, but not completed, can be registered together with the parcel permit and the project.
According to temporary article 3, foreign individuals or legal entities who have not completed the registration of ownership or shared ownership rights before the law comes into force can apply to the Ministry with a construction permit within one year.
Purchase and sale agreements and applications for building permits submitted before the law came into force will be registered in the cadastre along with projects submitted to the Department of Urban Planning. This also applies to trust management agreements, which must be registered with the Department of Revenue and Taxes.
Foreigners can register purchase and sale agreements in the cadastre within six months from May 21, 2024.
If a foreigner has been denied a purchase permit, a repeat application will cost twice as much. A third application for a permit is not allowed.
Foreign individuals and legal entities cannot acquire equity rights to land plots. However, up to three foreign individuals can jointly acquire equity rights to apartments or private houses.
The eighth paragraph of article 8 of the law states that foreigners cannot buy more than half of the apartments on one site if they are in the first degree of kinship or have the same nationality. At the same time, at least 20% of residential projects in built-up areas must be sold to citizens of the TRNC or states recognizing the TRNC.
According to temporary article 4, foreigners who have already purchased real estate or transferred it to a company before the law came into force do not need permission from the Council of Ministers, but obey the rules of paragraph 8 (10).
To obtain a purchase permit for investment purposes, real estate must be used in the fields of tourism, education, healthcare, industry, agriculture, technology and research. Investors are required to place 20 million euros in the TRNC bank and use these funds within two years.
By decision of the Council of Ministers, the purpose of using real estate is entered in the cadastral register and cannot be changed. The property cannot be sold or transferred within five years.
If the Council of Ministers determines that the funds are not being used for their intended purpose or have not been used for two years, the permit will be revoked.
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A source: northcyprusinform.com
Any company registered in the TRNC can purchase up to 60 donums (80,280 m2) of land for investment purposes if the company has foreign shareholders.
Companies acquiring real estate under this law are required to notify the Public Office and Registration Service within six months from the date of transfer of ownership rights. Changes in the management or the composition of shareholders of the company must be immediately notified to the Ministry of Internal Affairs. These rules also apply to companies registered outside the TRNC if their shareholders are citizens of the TRNC.
Persons who have made equity sales under purchase and sale agreements before the law comes into force must register transactions in the cadastre and notify the Ministry.
Persons who have concluded purchase and sale transactions exceeding their purchase rights are required to notify the Ministry and pay a fee of 1% of the sale amount within six months.
The amendments made to Law No. 39/2024 on the acquisition of real estate and long-term lease (by foreigners) are as follows:
- The sale of agricultural and forest lands to foreigners is prohibited.
- No more than 7% of the area of the district and 3% of the country's area can be sold to foreigners.
- Foreign persons can purchase only one real estate object.
- The area of the land plot cannot exceed 1,338 sq.m (1 donum), and only one house can be built on the site.
- Foreigners can only buy one apartment. Citizens of countries that recognize the TRNC are allowed to purchase up to three apartments.
- The area of the land plot for a separate house cannot exceed 3,300 sq.m (2.5 donums).
- When applying for the purchase of real estate, foreigners must pay a fee of 50% of the current minimum wage.
- If there are positive results of the security check and a certificate of non-conviction, the transaction can be completed. In case of a negative verification result, the application is rejected.
- If the transaction is not completed within 6 months from the date of publication of the decision of the Council of Ministers in the Official Gazette, the decision is canceled.
- The buyer and seller are obliged to pay all taxes and duties related to the transaction within 60 working days from the date of publication of the permit in the Official Gazette.
This circular, added in addition to the order on the application of the rules specified in Law No. 39/2024 on the acquisition of real estate and long-term lease (by foreigners), includes the following paragraph:
From the date of entry into force of the law, contracts for the purchase and sale of real estate concluded by foreign citizens in accordance with the rules of this law must be registered with the Tax Service.
Purchase and sale agreements registered with the Tax Service can be submitted to the relevant district cadastral office within 6 months for registration of property rights.
After registration at the district cadastral office, an application must be submitted to the Ministry within the specified period to obtain a permit to purchase real estate.
During the registration of purchase and sale agreements at the district cadastral office after the entry into force of the law, if they have applied for a construction permit, they can submit projects submitted to the Department of Urban Planning, along with acceptance documents and purchase and sale agreements.
• If the shares of a foreign company are transferred from a foreigner to a citizen of the TRNC, it is necessary to obtain permission from the Council of Ministers to conduct construction and investment operations.
• Foreign individuals and legal entities cannot enter into trust agreements for the purchase of real estate exceeding their acquisition rights.
• Foreign individuals and legal entities that concluded purchase and sale agreements before the entry into force of this (Amended) According to the Law, they are obliged to register contracts with the relevant district cadastral office within 6 months after its entry into force and submit an application to the Ministry for obtaining a purchase permit.
• Persons who have concluded purchase and sale agreements exceeding their purchase rights are required to notify the Ministry within 6 months and pay a fee of 1% of the sale amount. When transferring rights to real estate, it is also necessary to pay all taxes that the seller owes to the Tax Service.
• Persons who have not notified the Ministry within the specified 6-month period will have to pay a fee of 3% of the sale amount upon subsequent notification.
• Contracts that will not be brought into line with the rules of this (Amended) If they are not registered in the cadastre within 24 months after the end of the 6-month period, they will be considered invalid.
• Trust agreements concluded before the entry into force of this (Amended) According to the Law, they must be registered with the relevant district cadastral office within 75 working days from the date of entry into force of the law, and exceeding the rights to purchase parts must be notified to the Ministry.
A source: alliance-cyprusproperty.ru
