North Cyprus Property | Trusts | ‘a Nice Little Earner’

North Cyprus Property | Trusts | 'a Nice Little Earner'WITHOUT PREJUDICE

North Cyprus Property | Trusts | ‘a Nice Little Earner’

The following document concerning setting up a Trust is a service offered by an Advocate in Kyrenia. On the face of it, it looks like a good idea. However I am reliably informed that many have used this service and the comment has to be; ‘what a nice little earner’. Imagine £250 x 1000 properties, a cool £250,000 plus vat, coming into your practice without lifting a finger, every year, year in year out. You have to wonder what incentive there is for encouraging anyone to leave the Trust or chasing their Permission to Purchase, I am not accusing, just asking a very relevant question


This service is especially designed to suit the needs of non-Cypriots wishing to purchase property in North Cyprus and who do not want their names to appear in any official document for tax reasons or otherwise. The service is also available and most favored by foreign purchasers whose “permission to buy” has been somehow rejected by the Council of Ministers. Also, foreign investors who wish to purchase more than one property are most welcomed to use this service.

The Laws of North Cyprus allow non-Cypriots to buy for the use of their family one house standing on land in the extend of approximately one donum (14.400 sq. feet), or land in the extend of the same size, either for investment purpose or for the purpose of building upon.

The Laws provide that any such non-Cypriot should first obtain the TRNC’s Council of Ministers approval before such property can be registered officially into his name. Such ministerial approval normally takes six to twelve months and in many cases the Seller may insist to receive the sale price without having to wait the ministerial approval.

In such cases the Purchaser having to pay the full value of the purchase price will not accept to keep the title of the purchased property in the name of the Seller. In such cases this service is an option that clients may wish to use.

Trusts are very similar to the ones commonly used in the United Kingdom but not known as such in some other countries. Should a client wish to transfer his purchased property into a trust for the client who is called the Beneficiary. The Beneficiary will then become the equitable owner with full rights of an “owner”. He may occupy, rent or sell the property whenever and at whatever price that he may wish. All he has to do is to instruct the Trust to transfer the property to a named person or persons.


The creation of the trust will not entail any costs other than normal conveyance costs applicable to any normal purchase. During the continuation of the trust however there will be an annual trust fee of £250 + 16% VAT. Should the Beneficiary decide to sell then there will be normal conveyance fees as it will be applicable to any other sale.


When purchasing a property with the intention of putting the property on trust the Contract of Sale will still have to be stamped at the Tax office and then registered with the Land Registry as in any other property purchase. When the deeds are ready to be transferred to the Trust a deeds transfer fee of 6% will have to be paid to the Tax office by the Beneficiary.

If and when the Beneficiary decides to sell the trust property, the Purchaser from the Trust will have to pay VAT at the rate of 5% of the sale value and his normal deeds transfer tax.”  [Editor]

Look under the Cost heading. Having had the privilege of collecting your fee each year, “should the beneficiary decide to sell then there will be the normal conveyance fees as it will be applicable to any other sale“. Let us hope these are much reduced because the purchaser’s Advocate will be doing the lion’s share of the work, unless of course this Advocate acts for both the purchaser and the vendor….oh no, he wouldn’t do that would he? Conflict of interest and all that.

Then look under Tax. If you are lucky enough to be in a position to transfer you will pay the transfer fee and it is not made clear if you will enjoy the first purchase reduction, but you will pay VAT and that might be for the second time if your Contract was worded that you paid it on the original purchase.

The one thing the Trust does do is protect you from predatory builders/landowners/developers/banks but the protection has to be paid for over and over and over and over. Is there a regulatory body that Polices such trusts? Do they have to registered anywhere? I don’t think so. So who protects those who use this trust in the event they should need such protection?

The Advocate, who should be acting in your best interest, should have, in my opinion, created a Trust where you pay a one time fee to enter and exit the Trust, not an annual fee. Silly me, why would they do that?

Pandora S Box

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