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Why is Buying Property in Northern Cyprus Risky? Real Risks and Trends
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Real Estate in Northern Cyprus attracts buyers with the promise of seaside resort living and low prices.
However, investing in property in this region comes with significant challenges that can greatly impact the outcome of your investment efforts.
In this article, we’ll explore the risks associated with investing in and purchasing property in Northern Cyprus in detail.
Let’s start with some context: since 1974, the island of Cyprus has been divided into two distinct territories. The southern part, internationally recognized as the Republic of Cyprus and now a member of the EU, and the northern part, known as “Northern Cyprus.”
The term “Northern Cyprus” does not refer to a recognized state; it is the self-declared “Turkish Republic of Northern Cyprus (TRNC),” which lacks international recognition as a sovereign nation. The only country that recognizes this territory is Turkey.
Risks of Investing in Northern Cyprus
Disputed Property Ownership Many properties in Northern Cyprus are claimed by Greek Cypriots who were displaced to the Republic of Cyprus in 1974. These claims are supported by international law and the legal framework of the Republic of Cyprus, effectively nullifying the legal status of such properties.
Unrecognized Title Deeds Although Northern Cyprus has its own legal system, it is not internationally recognized, except by Turkey. Consequently, property ownership is acknowledged solely by Turkey and holds no legal validity outside its borders.
Economic Dependency Northern Cyprus is economically isolated and heavily reliant on financial support from Turkey. This dependency limits investment opportunities and market access.
Currency Risk Northern Cyprus uses the Turkish lira as its official currency, exposing investors to currency fluctuations and risks. This can significantly impact financial outcomes and create challenges in forecasting investment returns.
International Warnings Against Transactions Countries such as the United Kingdom, France, and the United States strongly advise against engaging in property transactions in disputed and conflict-prone territories. The presence of unresolved legal and political issues makes such deals undesirable under international law. For instance, further details can be found on the official website of the UK Foreign Office.
Carefully considering these potential risks underscores that purchasing property in Northern Cyprus is a highly risky endeavor. Investors are advised to exercise extreme caution and conduct thorough risk assessments before making any decisions to invest in real estate in this region.
Buying Real Estate in Cyprus
If you’re considering purchasing property in Cyprus, it’s essential to understand that choosing a recognized and legally stable territory offers significant advantages.
In this context, buying property in the legitimate Republic of Cyprus, a recognized member of the European Union, is a far more promising option.
Investors benefit both in terms of investment advantages and legal security.
⇒ First, in the Republic of Cyprus, investors gain access to a wide range of benefits, including a stable economy, diverse investment opportunities, and a high level of stability.
As an EU member, the Republic of Cyprus provides access to the expansive European market and is part of the single economic area, making business operations easier and promoting a diversified investment portfolio.
⇒ Second, the legal system in the Republic of Cyprus is stable and transparent, offering investors legal protection and clear property rights. This creates favorable conditions for long-term investments and enhances trust in the investment environment.
⇒ Third, the real estate market in Cyprus has seen dynamic growth year after year. In 2023, property sales in the Republic of Cyprus set a new record, surpassing the previous year by 16%.
Cypriot real estate is also among the most profitable in Europe.
According to the Royal Institution of Chartered Surveyors (RICS), the annual rental yield for apartments in Cyprus reached 10.1% in Q2 2023. These impressive figures highlight the attractiveness of investing in Cypriot real estate, offering investors significant annual returns.
Compared to buying property in uncertain and disputed territories, investing in the recognized Republic of Cyprus provides steady rental and passive income, as well as a reliable foundation for successful investments.
Moreover, this choice offers additional benefits, such as the opportunity to obtain permanent residency in Cyprus for the entire family, and in the long term, eligibility for an EU passport and citizenship within just five years.
Contact us for further advice and recommendations! Our team is ready to provide you with detailed information, help you choose the best option, and offer full support throughout the process of purchasing your property in Cyprus!
Elena Georghiou is the founder of Feod Group, a company that has been successfully operating since 1992. With over 30 years of experience, she specializes in corporate law, international taxation, immigration law, investment, and financial consulting....
Elena Georghiou is the founder of Feod Group, a company that has been successfully operating since 1992. With over 30 years of experience, she specializes in corporate law, international taxation, immigration law, investment, and financial consulting.
