Please read the Prime Ministry's faq document which should answer all your questions.
The stamp duty penalty amnesty has been extended
until the 30th April 2008
The deadline for registering sales agreements at the District Land Office has been extended until the 30th April 2008
Summary of answers:
Payment of stamp duty to the tax office is compulsory.
For existing sales agreements the payment is 0.5% of the contract price until the 30th April 2008. Thereafter, on existing agreements, you will have to pay 0.5% plus 1% late payment penalty.
You need an original signed sales agreement, a copy of this and the 0.5% in Turkish lira, sterling or a cheque drawn on a TRNC bank account. If paying in sterling please take the exchange rate for the day.
NOTE: the Prime Ministry states that only the buyer, estate agent, builder or lawyer can do the stamping and District Lands Office registration on your behalf without a Power of Attorney. However, we know of instances where buyers have paid the stamp duty on behalf of other buyers as they don't ask for ID. This may not be the case at the DLO
Registering the stamped sales agreement at the District Lands Office (Tapu), if dated before the 1st January 2008, is recommended, but not compulsory, and can be carried out before the 30th April 2008.
You will need all the documents listed in the
Prime Ministry's faq Q6,
plus the agreement translated into
Turkish faq Q10 (for admin purposes only).
Please read update
The District Lands Office (Tapu) total registration fee is 44.50 YTL for a Sales Agreement covered by one Koçan plus 13.50 YLT for each additional Koçan referred to in the Sales Agreement.
The tax office in Girne is just off the main by-pass opposite the turning to the Police Station and Wednesday market. Coming from the East drive all the way round the fountain roundabout and take the first turning on the left, tax office is approximately 50mts down on the right hand side. Parking is difficult.
The District Lands Office (Tapu) in Girne is on the ground floor next to the Post Office in the District Courts building.
Also read e-mail received on the 25th February regarding stamp duty payment and registration of sales agreement
The following information is now obsolete:
The government recently released a directive stating that all property sales agreements currently held by the Vendor (or his agent) must be submitted to the Land Registry before the 8th April 2008.
According to law number 19/1963 enacted in March 1963 stamp duty at 0.5% of the contract sales price is payable when sales agreements are lodged with the Land Registry. Stamp duty is payable within one month of signing the agreement. If paid between one month and six months of signing the duty is doubled to 1% and after 6 months it is trebled to 1.5%. Stamp duty is payable by the purchaser and it is the responsibility of the vendor (by law) to ensure that it is paid.
In order to legalise the sales agreement for title transfer, litigation, Kibtek meters, etc stamp duty is payable and most buyers have paid it at the penal rate of 1.5%, being informed by their legal advisors that it is a regular tax.
By law stamp duty is payable by the purchaser at the rate of 0.5% of the contract sales price and it is the duty of the vendor to actually make the payment and register the sales agreement. All fees and late registration charges must be paid by the vendor. You do not need to give any Power of Attorney to anyone to register your sales agreement
If you are asked to pay any more than 0.5% of your contract sales price please refer your lawyer/vendor to law 19/1963. Thanks to Ismet Ustunur for uncovering law 36/2005. Sales Agreements dated prior to December 2004 are subject to an 80% discount on the 1% penalty, making the Tax Office payment 0.7% (0.5% plus penalty of 0.2%). The government have not made a decision yet regarding a full penalty amnesty. If your Agreement is dated 2004 or before and you do not wish to wait for a government announcement you can go to your local TRNC Tax Office with an original signed contract and pay 0.7% of the sales price. Anyone can do this on your behalf and the tax office will accept YTL cash, sterling cash or a cheque drawn on a TRNC bank account.
When the Prime Ministry Property Complaints Office opened in July 2007 it quickly became apparent that the majority of buyers had not paid stamp duty and therefore the sales agreement was not legal and was not registered at the Land Registry. This was due to vendor negligence and careless practice by lawyers.
The HBPG have requested the government to allow a stamp duty amnesty period whereby no penalty for late payment is imposed. We are hopeful of a positive response by the end next week (1st February) and that the amnesty would run until the 8th April 2008. We have been asked to inform all buyers NOT to pay stamp duty until the amnesty decision is announced.
If your lawyer or vendor requests that you pay stamp duty please ensure that you receive an invoice showing how this is calculated and also a tax office receipt for prove of payment. Also ensure that you receive a copy of your stamped sales agreement.
When the sales agreements are analysed by the Land Registry it will provide vital information regarding what plots of land have been sold for development, if any fraud has been committed, i.e. mortgage taken on land since agreement was entered to, if there has been any double selling of plots, etc.
This is a positive indication that the government has finally acknowledged that the property related laws and regulations have been abused in the past.