Important considerations for North Cyprus property investment


What are the points to consider for North Cyprus property investment?

Because foreigners cannot buy several homes in North Cyprus, most Europeans buying for investment are individuals hoping to supplement their income through the rental of their own property or a small portfolio of properties. In North Cyprus, there are two main rental options: long-term rental ( more than 6 months) or short-term holiday renting. Some people buy in order to profit from capital gains. Housing prices in North Cyprus are rising on average, however, the rate of increase varies greatly depending on the location. If you wish to buy property for investment purposes, such as long-term rental with asset capital appreciation, the ideal place to buy is in a city like İskele, Kyrenia, or Famagusta, or in the surrounding villages.

Read our previous blog post to assist you in making informed decisions if you would like to own a North Cyprus property for any purpose!


You have greater options in terms of location if you want to rent your property for short-term vacation rentals throughout the year or for a period of the year. Most European visitors to North Cyprus are looking for a ‘sun, sea, and sand’ type of vacation, so keep this in mind when deciding where to acquire a property for the purpose of renting out for a short period of time.

If you plan to buy a property purely for use as a short-term rental, choose one that is either in a large or small complex, where your occupants can meet other visitors and where the beach and restaurants are easily accessible. Many tourists do not want to rent a car during their vacation because it increases their expenditures significantly, therefore looking into public transportation (mainly dolmuses) possibilities. The market for rural retreats or boutique rentals in North Cyprus is extremely small, and you are unlikely to obtain significant occupancy rates.

Many people who own a vacation property think about renting it out for short periods of time when they are not using it. This can provide you with additional income, but there are drawbacks. You must be able to store your personal belongings outside of the home or lock off a storage place within the property. You will need someone trustworthy in North Cyprus to manage your property. A number of property management companies in North Cyprus will take care of this for you, but you must include it in their fees when calculating the potential rental returns.

Keep in mind that the peak tourist season spans from April to October when assessing your potential rental income. It is unlikely that you will be able to rent your property outside of the peak holiday season if it is on a holiday complex a long way from a large city. There is a market for ‘Winter Breaks’ in North Cyprus,’ however, tourists who take this type of vacation prefer to stay near the main towns, where utilities are open and winter activities, such as Christmas festivals, are available.

If you wish to rent out your home, try buying in major tourist areas like İskele, Famagusta, or Kyrenia, where there is a huge rental market of international employees, primarily Turks, Asians, and Africans, who want apartments close to their workplace. In North Cyprus, there is also a considerable student population looking to rent properties close to their university or in towns with social amenities.

Some European tourists are hesitant to rent their homes to non-Europeans due to concerns about problematic tenants. To protect yourself from such problems, engage a property management company or an estate agent to arrange and manage the rental. They will make sure you have a proper rental contract in place, collect the rent, pay all taxes to the Tax Office (Vergi Dairesi), and aid you if a tenant does not pay on time. If you opt to handle the rental yourself, make sure you have a detailed contract signed and filed with the tax office.

It is standard practice in North Cyprus for an agency to accept a one-month deposit to secure a rental, and then the renter pays two months’ rent in advance. Some people need students to pay for a year in advance to assure that there will be no problems with rent payments.

If you wish to rent a property to other Europeans for a long period of time ( more than 6 months), you have more flexibility in terms of location. Once again, you must have a written contract signed by all parties, registered with the tax office, and the tax due paid. Rental revenue is subject to a 10% tax. However, this is subject to changes.

You can also check out some of the Frequently Asked Questions about purchasing a North Cyprus property!


Costs of purchasing a North Cyprus property

The cost of buying a home in North Cyprus varies based on the location and type of property you want to buy. If you buy a new home, you will have to pay taxes and connection fees, which you won’t have to do if you buy a ‘used’ home where the previous owner has already paid these charges. There are three categories of costs to consider when purchasing a home:

A “secondhand” or “resale” property purchased from a private seller. The title deed is in the names of the individuals, and the VAT has been paid.

A “resale” or second-hand property purchased from a private seller who has not transferred the title deed to their name. This could be due to the fact that the title deed is pending or remains in the developer’s name. Even though the seller has already paid VAT, the buyer is normally responsible for it in this scenario. This form of acquisition is referred to as a “professional sale” by the government.

A developer-built, key-ready or under-construction property that is being acquired. A 5% VAT is ALWAYS due to the tax office on all new properties.

If you are purchasing a ‘second-hand/pre-owned’ property, you need to budget an additional 5% for purchase expenditures on top of the property price. Additional charges could be up to 16 percent of the property value if you buy a home where the seller has not taken the title deed or a brand new property.

Note that the Transfer of Title fee is not due until your authorization to purchase is granted, which might take up to 12 months after you sign the Contract of Sale.

There may be additional charges involved with taking out a bank mortgage, depending on whether you are a cash buyer or purchasing the house with a mortgage.

The cost of living is often cheaper than in other Northern European countries. This link provides useful information about an estimate of some of the usual costs of living in North Cyprus.


Loans & mortgages

So, how can a foreign buyer or investor acquire a home if they don’t have all of the necessary funds? There are three primary choices:

Re-mortgage your home in your home country to free up funds that you can utilize to buy in North Cyprus.

Many European countries have lower interest rates, making this a viable alternative.

Take advantage of one of the “developer payment plans” for non-status people. The buyer takes out a loan from the construction company and repays it over a period of up to 12 years. When choosing a property, keep in mind that each developer has a different interest rate, minimum deposit percentage, and time period for complete payment.

If you are looking to buy a new home, take advantage of the mortgage choices offered by North Cyprus institutions to help you buy a home. Many Turkish Cypriot and Turkish banks are already providing mortgages to foreigners interested in buying property on the island.

In most cases, they demand that 50% of the property’s worth be paid. You will need to show that you have enough monthly income to cover the repayments, which are normally spread out over a 5- to 10-year period.

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