PROPERTY TRANSACTIONS

The taxes to be paid during the purchase and sale of real estate in K.K.T.C. are as follows: Withholding: A tax paid by the seller. If the seller is a non-profit (amateur) individual seller, he may not pay withholding tax by using the exemption right only once. After this right is exercised, the company has to pay 2.8% withholding on the sales price approved by the title deed office. A non-profit (professional) seller pays 4% tax on the sales price approved by the land registry office for each sale. VAT (Value Added Tax): VAT is not payable if the seller is a non-profit (amateur) individual seller. The non-profit (professional) seller pays 5% VAT to the tax office before the transfer. VAT is not exempt. VAT is paid by the buyer in case of agreement. Title Deed Transfer Fee: A tax paid by the buyer. If the buyer is a non-profit (amateur) individual buyer, he may pay less transfer fee by using 50% exemption once in his life. (3% tax rate is applied instead of 6%). After this right is exercised, the buyer must pay 6% tax on the sales price approved by the title deed office in all purchases. The profit-making (professional) buyer pays a tax of 6% on the sales price approved by the land registry office for each purchase. Stamp Stamp: It is a tax paid in case the real estate is realized with the sales contract (Ex: In case a real estate is purchased from a project with a future delivery). This tax must be paid to the tax office within 21 days of the sale contract being signed by the buyer and seller. After paying 0.5% (five thousandths) stamp fee, the relevant contract must be registered in the Land Registry Office. After this registration, the buyer's right to ownership becomes legally legal.