Land Registry system for payment of taxes under new legislation up and running
On 21st May 2024, the TRNC Government introduced new legislation under which all purchasers who had received their permission to purchase prior to the new legislation coming into force are required to take title to their property within 6 months of the new legislation coming into force.
Under the new legislation, in situations where it is not possible for a purchaser to take title to their property within this 6-month period due to the fact that the separate, individual title deeds or the interim individual deeds (known as ‘Kat İrtifak Koçanı’ in Turkish) for the property have not yet been issued, both parties (vendor and purchaser) must pay their transfer of title taxes within 60 working days of the new legislation coming into force.
According to information obtained from the Land Registry, the new system for making payment of the taxes in accordance with the new legislation is now up and running.
The final date for making payment of the taxes or registering your intention to do so with the Land Registry is 19th August 2024.
According to the Land Registry, in order to make payment of the taxes, the Land Registry valuation forms which are used for Contracts of Sale registrations, rather than the Land Registry valuation forms which are used for transfer of title, must be filled in and submitted to the Land Registry, together with the following documents:
- Stamped Contract of Sale
- A copy of the Council of Ministers’ decision confirming that the purchase permit application has been granted (your lawyer can provide you with the decision number and the copy of the decision can then be obtained from the Land Registry using the decision number)
- Passport/ID card copies for all parties and powers of attorney for all parties as applicable
Once the valuation has been carried out by the Land Registry, the vendor must first pay the capital gains tax (stopaj) at the Tax Office. If the transaction is subject to VAT, the VAT must also be paid or the VAT invoice (known as ‘fatura’ in Turkish) must be presented to the Tax Office at the same time as the payment of the stopaj tax.
Once this has been done, the purchaser can then visit the Land Registry to make payment of the Land Registry transfer fees.
The Land Registry transfer fees in all cases, regardless of when the Contract of Sale was signed and/or registered at the Land Registry are now 12% of the Land Registry valuation. In the case of purchasers who purchased after 10th February 2023 and who have already, therefore, paid 6% towards the Land Registry at the time of registering their Contract of Sale, only the remaining balance of the Land Registry fees, after deduction of the 6% paid at the time of the registration of the Contract of Sale, will be payable.
The Land Registry has confirmed that, in situations where it is not possible for the payment of the taxes to be completed by 19th August 2024, provided that the purchaser visits the Land Registry by 19th August 2024 together with the above documents and registers their intention to pay the taxes, the Land Registry will add them to the list and give them a number.