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We will support you during legal procedures on the acquired property.   The following information will help you familiarize yourself with the main types of taxes involved in the purchase of real estate transactions in Northern Cyprus.
 
 There are four main taxes involved in any property sale and purchase transaction these taxes
are:
• Capital gains tax
• VAT
• Transfer fee
• Stamp duty
 
Capital Gains Tax
Capital Gains Tax (Stopaj) which is payable to the Tax Office is generally payable by the Vendor although this can always be varied by the parties by an express clause in the Contract of Sale.
The Tax Office requires a copy of the Contract of Sale to be presented to it prior to transfer of title. It will then calculate the Capital Gains Tax based on either the Assessed Value or the Contract value, whichever is the highest.
 
VAT
The Tax Office requires a copy of the Contract of Sale to be presented to it prior to transfer of title. It will then calculate the VAT based on either the Assessed Value or the Contract value, whichever is the highest. VAT is currently 5% of  Assessed Value or the Contract Value.
 The payment of VAT depends on whether or not the transaction is subject to VAT. This depends on whether the Vendor (the person who has title to the property not simply contractual ownership or possession of the property) is deemed by the Tax Office to be a ‘Professional Vendor’ (i.e. whether the transaction is of a commercial nature or for profit). If the Vendor is deemed to be a Professional Vendor, the transaction will be subject to VAT.
If the Vendor is a private individual, not a Professional Vendor, the transaction will not be subject to VAT.
If the transaction is subject to VAT, who will actually pay the VAT depends on the terms of the Contract of Sale.
 
Transfer Fee
Transfer Fee which is payable to Land Registry Office just before transfer of title takes place  is usually paid by the purchaser and is is currently 6% of the property assessed value or the contract price whichever is the highest. Everyone is entitled to a once in a lifetime exemption to pay 3%.
The Land Registry will view the Contract of Sale before transfer of title to assess the value of the property and will calculate the Transfer Fee on the higher of either the assessed value or the Contract price. The Transfer fee is generally payable by the Purchaser, although this can always be varied by the parties by an express clause in the Contract of Sale.
 
Stamp Duty
Stamp duty which is payable to the Tax Office and is calculated on the contract value of the property. Generally  Stamp Duty is payable by the Purchaser, although this can always be varied by the parties by an express clause in the Contract of Sale.
All Contracts of Sale must be registered at the District Lands Office within 21 days of being signed and it is now compulsory for the Stamp Duty to be paid at the rate of 0.5% before registration can take place.
 

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