Like many locations with a warm Mediterranean climate, beautiful natural landscapes, and affordable property prices, Northern Cyprus has seen enormous influxes of foreign buyers and investors in recent years. Many are keen to relocate, buy a holiday property, or invest in the market as a long-term investment or retirement strategy.
However, in line with the reforms made in many destinations, the Turkish Cypriot administration has needed to react given the lack of availability for local residents, combined with the potential misuse and exploitation of previously relaxed rules.
The real estate specialists at Property Turkey explain the changes, why they have been introduced, and their impacts on you if you are planning a property purchase in Northern Cyprus in the near future.
Understanding the Reasons Behind Stricter Rules for Foreign Buyers
Changes to the rules for Northern Cyprus property purchases were finalised earlier this year due to gaps in the former legislation that had been easy to use for nefarious purposes. The old rules enabled foreign buyers to purchase up to three properties, albeit subject to permission being granted.
The spikes in buyers sidestepping the rules by setting up trust structures through local lawyers mean that affluent investors and criminals using the real estate market for money laundering could snap up numerous plots of land and properties while concealing the owner's identity.
The discovery that as many as 50% of all transactions were not being recorded, combined with the prevalence of undisclosed buyers operating behind a screen, prompted swift and sweeping changes to clamp down.
Another core aspect is that the lack of controls had made it easy for illicit funds to be filtered into Cyprus, with reports of considerable transfers of capital, often hidden through property transactions, originating from Russia to safeguard wealth from sanctions.
To try and correct this ongoing misuse of the freedoms previously found within the local market, the authorities have stated that any property in Northern Cyprus that has not been registered appropriately with the land registry must be sold or transferred within 24 months, including real estate assets purchased above the new maximum.
New Rules for Property Buyers Purchasing a Northern Cypriot Home
In reality, the changes are unlikely to significantly impact legitimate buyers and those who fully intend to register their ownership properly—but they could be meaningful for investors who may have wanted to purchase multiple homes or rental units as part of an overseas portfolio.
The intention is to limit foreign national property investment and to close loopholes. The main changes mean that citizens of countries that recognise Northern Cyprus as a Turkish Republic—notably only those from Turkey—retain the right to purchase up to three properties, which could mean a greater proportion of properties will be bought by Turkish investors.
Other foreign nationals from any other country can only buy a maximum of one property.
Any real estate transactions concealed through a legal representative, particularly multiple property purchases, will be void and invalid unless the property transfer is completed and recorded with the land registry within six months.
Further, overall foreign property ownership will be capped at 7% in any Northern Cypriot district and a 3% maximum across the north.
The latter rule could be relevant for buyers considering a property in one of the highest-demand locations or resorts since there is a far higher likelihood that international real estate ownership will already be close to, or at, the 7% threshold.
In this case, multiple up-and-coming areas and coastal towns offer exceptional value for money, high-quality homes, and new developments where contractors and resort builders have recognised the need to pivot to manage the potential knock-on impacts on their businesses.
Key Areas in Northern Cyprus for New Foreign Property Acquisitions
One of the original requirements unaffected by the recent reforms is the need for all foreign buyers to request permission from the Council of Ministers.
International buyers worried about whether their transaction might fall at the final hurdle due to high levels of foreign property ownership in the region can check with us as their agent or their legal representative to verify that there is a good chance of approval to avoid disappointment.
Another strategy is to look for hidden gems and areas that are not yet crowded or overdeveloped and where the levels of overseas ownership are low.
Popular cities and regions like Famagusta, Iskele, and Kyrenia, for example, have fairly established expat communities and hotels and resorts aimed at the tourist market that are partially or fully foreign owned.
Destinations to Consider for Your North Cyprus Home-From-Home
Looking a little further afield could be a fantastic way to purchase a beautiful Cypriot property somewhere quiet and peaceful and to ensure you easily comply with the new property ownership rules.
Bellapais is one standout example, as a small, stunning mountain village just four miles from Kyrenia. This beauty spot has a unique heritage and history, having been formed in the 13th century, and with cobbled streets, small eateries, and traditional stone buildings that are packed with charm.
Bahçeli is just as appealing as a village on the east coast close to Kyrenia, and a tranquil area with gorgeous landscapes, and plans for several new housing developments in the region.
Lapta is another option and an emerging tourist destination. Its pristine coastline is offset by the mountain ranges behind, and there is growing interest in investment due to the potential for the town to become a high-demand resort.
We’d also highlight Esentepe, which is a semi-rural area with astonishing views from the hills down towards the sea. It is an enormously popular place for high-end properties, with several golf courses and resorts and spacious luxury villas far from the noise and bustle of the towns.
Read more about Property Turkey – All You Need to Know About Buying Property in Turkey as an Expat
About Property Turkey: With 20+ years experience in the Turkish real estate market, team Property Turkey are your experienced, friendly and independent overseas real estate consultants. Our head office is located in London, UK with regional operational offices in Bodrum, Fethiye & Kalkan, Antalya and Istanbul.
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Source Company: https://www.propertyturkey.com/
