20 Reasons to Invest in a Real Estate Property in Northern Cyprus

Людмил Лесичков 17 March 2021 2866

Turkish Republic of Northern Cyprus (TRNC) is the new Mediterranean property hotspot! With buyers from the UK, East and West Europe, Scandinavia and the Middle East increasingly lining up to buy a North Cyprus villa or apartment.

North Cyprus is gradually becoming one of the most popular areas of investing in real estate. Especially attractive Northern Cyprus is to residents of those countries, whose national currencies in recent years became weaker. In connection with the currency crisis has appeared an urgent need to save the remaining part of the capital, to protect assets from future risks.

This article explores the top reasons for this – so read on for news about how YOU can benefit from a secure, low-cost yet fast-rising North Cyprus property investment in this unique non-Euro-zone economic area with an international population of residents from all over the world.

 Northern Cyprus is a non Eurozone area.

The non Euro-zone status of Northern Cyprus, previously seen as a DIS-incentive to many, has recently become a huge bonus and sales point for overseas property buyers. All North Cyprus property prices are linked to the stable pound sterling which is the de facto international currency in the TRNC, where shops and restaurants also widely accept the pound as well as the Turkish Lira. By contrast, many other Mediterranean property destinations (such as Spain, Greece or South Cyprus) are all priced in euros which have fallen in value recently. In addition, the unstable nature of the Greek banking system which obviously affects both Greece and southern Cyprus is putting investors off from investing generally in those countries. In North Cyprus, investors and lifestyle property buyers have “the best of both worlds” – getting their property value fixed to a stable currency whilst also gaining a low cost of living (due to favourable exchange rates against the Turkish Lira), which makes eating out, shopping or furnishing a new North Cyprus property extremely affordable.

Climate.

North Cyprus offers on average 340 days of sun per year and the warmest winter temperatures of anywhere in the general European area, being also warmer than Turkey.

Communications.

There are two major airports in Cyprus: Ercan (Lefkosa) in the Northern part and Larnaca Airport in the south of Cyprus. Any property seeker with either a European or Common wealth passport, or Schengen visa is free to enter via the global hub of Larnaca airport, which offers fabulous connections all over the world. Ercan airport in the North of Cyprus requires no advance visa and is therefore ideal for those non-Schengen nationals who can easily and affordably arrive via Turkey.

Safety and Low Crime Rate.

A recent research carried out by ValuePenguin has confirmed that Cyprus is one of thbe safest countries in the world. Cyprus is proud to hold the 5th place worldwide out of 106 countries that were analyzed during the research about the safest countries in the world. Moreover, Cyprus is the number 1 safest place to live and travel among the countries that have population under 5 million.

You are ALL welcome.

Yes that’s right, almost every passport holder in the world can enter or live in North Cyprus with no advance visa required. Not only that, but almost every national can also buy property in the TRNC! Once you have an address, you can easily apply for North Cyprus Residency, (it takes 21 days to be ready) which is renewable annually as long as you can prove your ability to support yourself financially and that you have no communicable or serious diseases.

Easy to Grant Residence Permit.

Happy owners of property in North Cyprus can apply for the residence permit in the country. However, if in the southern part of the island there is a minimum investment amount of €300,000, but in the North there is no such requirements. The procedure is free, takes about 3 weeks. Homeowners aged 60 years, can live on Northern Cyprus without a residence permit. To process the residence permit, the property owner must open a Bank account and fund it by a certain amount (based on $10,000 for each family member) in order to prove their solvency. The residence permit must be renewed every year. After 7 years of living in TRNC can apply for citizenship.

Real Estate Prices are Lower Compared to Southern Cyprus.

North Cyprus property is far more affordable than Turkey and many other Mediterranean locations for the same standard of property. It is also more exclusive, offering a unique island atmosphere. Nevertheless, it is still very far away from the level of Southern Cyprus. In Southern Cyprus in the cities of the "first tier" (Limassol, Paphos) ordinary studio apartment at the sea are costs at least €130,000.

(If you reach Northern Cyprus, over the same object you will pay just €50,000! The average price per m2 — from €1,000 to €1,200. The average sum of real estate transactions in Northern Cyprus is €75,000. Traditionally in new buildings, about 80% of the apartments are sold out already on the early stage of construction).

The Rising Investment. 

Over the last few years property prices in North Cyprus has increased significantly. Every year the cost of square meters increases by 10%.

(North Cyprus property prices are rising by up to 10% p.a. in key investment zones. In other areas, prices have been extremely stable. This is in sharp contrast to falling prices in other Eurozone areas. The reason why North Cyprus property prices have stayed so stable is that property in Northern Cyprus has been built with private capital and NOT with loans from the international banking system. Hence the North Cyprus property market was insulated from the global banking collapse).

The most profitable resale strategy is the purchase of an object at the zero stage of construction, when the developer sells it at the lowest price. After the construction completed (as a rule, this period is in 1,5-2 years after the beginning of the construction), the object is resold at the market price of the completed projects. The properties value goes up to 30% in capital increase from off-plan to final project realization.

         The change of prices * for a studio apartment, GBP (Northern Cyprus)

2014

2015

2016

2017

2018

2019

2020

22,600 £

24,900 £

27,900 £

32,900 £

37,900 £

42,900 £

47,900 £

         * The prices are given at the initial stage of construction, GBP

Low Tax rate.

Tax on real estate in the Northern part of the island of Cyprus is quite low. In the table below, we mentioned taxes and other payments that a foreign owner has to pay for the real estate.

Taxes for the purchase of the real estate

Tax amount

Stamp duty: The payment when signing of the contract of sale.

0.5% of the property’s cost.

Value Added Tax – VAT: The payment by the time you receive the keys from the builder.

5% of the property’s cost.

Transformer charge: (the provision of electricity and water communications). The payment by the time you receive the keys from the builder.

(1,200 – 2,000 GBP) depending on the property’s type.

Other Payments

Services of the lawyer

1300 GBP

Transfer fee, the title obtaining

1% of the property’s cost.

Installing the electricity meter

1100 Turkish Liras

Installing the water meter

400 Turkish Liras

Annual property tax*

1.25 Turkish Lira (about 0.15 euros) per 1 sq.m.

Annual tax on cleanliness*

100 Turkish Liras

Annual payment for the maintenance of the complex*

from 40 to 60 GBP (monthly), depending on the residential complex.

    Note: * means that this payment is annually payable.

Higher Rental Yields.

Commercial real estate of Northern Cyprus (shopping, offices), as well as in any other country, brings more income than the housing. On the other hand, risks are higher, and it will require pretty solid investments. Not every investor can afford it.

Residential property in North Cyprus every year becomes more expensive. In addition, offering holiday homes for rent the owner may get 10% return per year. The most popular are studios and apartments with 1 or 2 bedrooms.

The maximum profit is currently yielding short-term rental. In condition of effective management the owner of such property earns up to 15% per annum.

North Cyprus is Unspoilt Nature.

The unspoilt, natural charm of the traditional countryside villages and the lovely welcoming nature of the Turkish Cypriot people are very appealing to property buyers. Many North Cyprus villa and apartment complexes have as a backdrop the rapidly rising Besparmak (Five Finger) mountain range which sweeps down to the north coast beaches beyond. TRNC property investors have the choice between city properties with easy access to the charming Kyrenia Harbour with its “Monte Carlo”-style nightlife, restaurants, casinos and yachts, or a beachfront or mountainside property in a village or the countryside surrounded by fields, olive or carob groves and local character yet with many only 20-30 minutes’ drive from the buzzing city. Even many town-centre properties in North Cyprus have views to the mountains and can enjoy the floodlit St. Hilarion Castle at night, perched on the mountaintops behind Kyrenia. Unspoilt natural beauty is never far away for a North Cyprus property owner, whether you choose the north coast, east coast or west coast as your preferred location. The popular east coast near to Famagusta and the unspoilt more distant Karpaz Peninsula offer long stretches of sandy North Cyprus beaches, whilst the less developed west coast is great for water sports and kite-surfing, fuelled by the favourable winds on that side of Cyprus. Whatever type of environment you love, you will find it in North Cyprus.

 North Cyprus is a Rich Culture.

 Northern Cyprus offers a unique blend of history, fabulous cuisine, Turkish culture and classical music and other festivals. Where else in the Mediterranean can you find, in such a close proximity, annual classical music festivals against the backdrop of the hauntingly beautiful Bellapais Abbey, a unique Turkish Cypriot cuisine with a wide selection of world-class North Cyprus eating places, traditional craft and other local festivals, and a rich history of ancient castle, tombs and sites thousands of years including Greek temples, Roman cities, Persian Palaces, Crusader castles and much more! In addition, the natural beauty of the Karpaz wilderness and the Besparmak mountains which rise up behind Kyrenia, “the jewel of the Mediterranean” leave most first-time visitors to North Cyprus realising they have unwittingly started a love affair which will become a life-long passion. It is this passion which leads many North Cyprus property seekers to buy their little part of heaven and come back year after year to their North Cyprus home.

 Significant Increase in the Number of Universities and Active Students.

Northern Cyprus has long been a country where the education sector has been a very important place with its advanced universities and number of students in the field of education. In recent years, the number of universities actively teaching has increased to 18 with newly opened universities. With universities whose permits have been completed and are expected to start training soon, this number will rise to 26. Today, the number of active students in TRNC has exceeded 100,000, and this number increases by 12% to 15% each year. This creates serious opportunities in both real estate and investment areas and is growing the economy of the country.

North Cyprus Tourism Increase.

New TRNC government statistics have seen North Cyprus tourism increase significantly in the last 12 months – with increased numbers arriving from diverse areas including Europe (France and Germany both up by 25%), North America (Canada and USA up by 10 and 20%), Scandinavia (Finland up by 50%) even  new arrivals from China (up by 18%)!

 No More Coronavirus (COVID-19) in North Cyprus!

North Cyprus could become the first country in the world to eradicate coronavirus COVID-19. On 10th of March, TRNC  announced the first case of COVID-19 and On 11th May, the last coronavirus patient has been discharged from hospital and there are no active cases left.

Life Style Cheaper than Southern Cyprus.

Generally Northern Cyprus is cheaper than Southern Cyprus. The main reason for this is that Northern Cyprus uses Turkish Lira which is better value when compared to the Euro (which is used in Southern Cyprus). The Turkish Lira currency benefits tourists and people living in Northern Cyprus as it makes it cheaper than Southern Cyprus. Due to the currency benefits, it is not only cheaper while you are spending on restaurants, beach clubs, car hire etc. North Cyprus also often offers better value and cheaper priced quality hotels, when compared with hotels south of the South of the border.

No Information Disclosure about the Source of Money.

Because of international sanctions and the lack of recognition of the “TRNC,” the banking sector is largely isolated from international financial institutions. Banks operating in the area do not have access to the SWIFT system and have almost no correspondent banking relationships outside of Turkey. Also, any information disclosed to the Ministry of Finance, including the names of beneficial owners (properties or companies) and financial or other information about the properties or companies and its owners, remains strictly confidential.

Cyprus’ beaches have the best water quality in the EU.

Cyprus had the highest proportion of bathing sites with excellent water quality in the European Union with 99.1.%, according to a report by the European Commission and the European Environment Agency (EEA) published on 08th of June 2020. The survey covered 113 bathing sites in Cyprus of which 112 were found to be of excellent quality. According to the report, in five countries 95% or more of bathing sites were found to have excellent water quality: Cyprus (99.1% of all sites), Austria (98.5%), Malta (97.7%), Greece (95.7%) and Croatia (95.6%), it said.

New ERCAN Airport will take Direct Flights from Europe.

The tourism minister of TRNC, Unal Ustel, said that when the construction of a new terminal at Ercan Airport is completed, campaigns will be launched to start direct flights to Northern Cyprus in Europe and the UK. New Ercan will operate at the same level as other modern international airports, ensuring passengers’ safety, flight safety and high-quality service. Northern Cyprus Prime Minister, Ersin Tatar, said that the work on the new runway and terminal at Ercan airport has been completed and the opening date has been set for 29 October, 2020.

Since some of the world’s largest gas reserves were discovered in Cyprus, the island has been coveted by fossil-fuel giants. 

On 31 October 2018, Turkey launched its own hunt for oil and gas off Antalya, a race which could stir up new tensions in the region. Over the last decade, exploratory drilling has uncovered vast reserves of natural gas and oil near the coasts of Cyprus, Egypt, Occuiped Palestine and Lebanon. The Mediterranean, the Mare Nostrum, is rapidly becoming the focus of tensions linked to maritime borders and economic exclusion zones (EEZ). Two regional disputes exacerbate the problem: the Israel-Palestine conflict and discord over Cyprus itself, the island being divided since 1974.

Neither has Ankara ratified the 1982 UN Convention on the Law of the Sea (Unclos) because of its misgivings about article 87 of part V. Following Ankara’s line, TRNC claims co-ownership of the island’s natural resources and opposes attempts by Nicosia to make unilateral contracts for drilling at sea. In September 2011 the Turkish Cypriots signed an “accord of delimitation of the continental shelf” with Turkey. On this basis the separatist regime declared an “economic exclusion zone” comprising half of the Cypriot EEZ and including blocks 1, 2, 3, 8, 9, 12 and 13.

This map shows Cyprus’ Exclusive Economic Zone, as well as the different drilling blocks, the companies that are exploiting them, and their country. (Andreas Vou | VoxEurop).

The proven gas reserves dispersed over the 13 blocks of a part of the Republic of Cyprus’s self-declared EEZ are estimated at 10-12 bn cubic feet. Natural gas in block 12, named “Aphrodite”, drilled by such companies as Noble Energy, Royal Dutch Shell and Delek, is alone estimated at 4.5 bn cubic feet. On 8 February 2018, Italian giant Eni announced a discovery of gas in the block 6, “Calypso”. According to Cypriot media  its proven reserves are estimated at between 6 and 8 bn cubic feet. But these figures remain small compared to those of wells belonging to Egypt (“Zohr”, 30 bn cubic feet) and Occupied Palestine.

For the first time in its history Cyprus has been playing, de facto, an important role in regional politics and security. Therefore, this move can give a real opportunity to bring an economic benefits for Northern Cyprus.

Reopening Varosha (Marash) by the end of 2020.

  In 2019, the Government of Northern Cyprus announced it would open Varosha to settlement. On 14 November 2019, Ersin Tatar, the prime minister of Northern Cyprus, announced that Northern Cyprus aims to open Varosha by the end of 2020.

   Turkish and northern Cypriot officials met on February 2020 in an abandoned town wrecked by war to discuss potentially re-opening the area after 46 years, a move that Ankara said was a “historic” opportunity to bring tourism and economic benefits.

Varosha, a southern suburb of Famagusta, has been fenced off and abandoned since Turkey invaded northern Cyprus after a Greek-inspired coup in 1974. Ringed by a fence which extends into the sea, the former holiday resort has been off limits to anyone but the Turkish military since its 39,000 Greek Cypriot residents fled advancing Turkish troops. Speaking in Varosha after touring the area, Turkish Vice President Fuat Oktay said opening Varosha would have benefits for tourism, the economy and trade.

“Keeping this coast of paradise under the sovereignty of the Turkish Republic of Northern Cyprus idle is not acceptable legally, politically or economically,” Oktay said.

Turkish and northern Cypriot officials were continuing their inventory efforts there, he said. There is unfortunately an abandoned area here as well as rotting buildings. Our hope is that Varosha is revived in a way that will revitalize the economic, trade and social life here,” Oktay said.

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