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What is the tax when renting out real estate in Northern Cyprus?

Home page » Blog, news, reviews about Cyprus » What is the tax when renting out real estate in Northern Cyprus?
Author of the article:
Anastasia
Northern Cyprus
Real Estate Specialist
Date:  25.02.2024
Reading time: 5 min.
Views:  390

Owning a property in Northern Cyprus can be not only pleasant, but also profitable if you decide to rent out your property. However, it is important to understand that you will have to pay tax on this income. In this article, we will look at the main points of taxation when renting out real estate in Northern Cyprus, so that you can avoid unpleasant surprises.

Long-term lease

Long-term rental of real estate in Northern Cyprus involves paying a tax of 10 to 13% of income. This is important to consider when planning your financial model. It is important to note that tax rates may change, so it is recommended that you regularly update your knowledge on this issue.

It should also be taken into account that the lease agreement must be registered with the tax service. Otherwise, you run the risk of being fined for tax evasion.

It is worth noting that when renting a long-term lease, you may encounter various situations that may affect the level of your tax. For example, if your tenant decides to terminate the contract early, this may affect your tax liability. Therefore, you should always be aware of all changes in the contract.

Also, don't forget that long-term rentals can offer various discounts and benefits. In some cases, you can take advantage of tax deductions that exist for landlords. But to do this, you will need to contact a professional who will help you properly arrange all the necessary documents.

Short-term rentals

If you are renting out a property for short-term rent, the tax rates also range from 10% to 13%. This means that for each euro received from the lease, you will have to pay from 10 to 13 cents to the treasury. At the same time, it is important to remember that tax rates may vary depending on the legislation, so it is recommended to regularly update your knowledge on this issue.

For short-term rentals, you will need to fill out Form V. D. 91 to pay the tax. This is a special form that can be obtained from the tax service. Form V. D. 91 is an income statement that must be completed and submitted to the Internal Revenue Service within a certain period of time after receiving rental income.

It is important to note that when renting out a property for short-term rent, you can also take into account the costs of maintaining and repairing the property. This will help reduce the tax base and, accordingly, the amount of tax paid.

Finally, do not forget that for short-term rentals, as well as for long-term ones, the contract must be registered with the tax service. Otherwise, you run the risk of being fined for tax evasion.

Contract registration

The process of registering a contract with the tax service is a mandatory step when renting out real estate. This is necessary so that the Internal Revenue Service can monitor your rental income and ensure compliance with tax laws. Do not forget that failure to register a contract can lead to serious penalties.

Registration of a rental agreement costs approximately 42 US dollars (at the current exchange rate of 1 lira = 0.12 US dollars). This is a state fee that must be paid for processing documents. It is worth noting that the amount of the fee may vary depending on the year and the specific situation in the country.

It is important to understand that registering a contract is not a one-time action. If the lease agreement has been changed or extended, it must also be re-registered with the tax service.

Finally, don't forget that registering a rental agreement takes time. Therefore, it is recommended not to postpone this procedure until the last moment, in order to avoid possible problems.

Documents

Paying taxes is a process that requires precision and attention to detail. When renting out a property in Northern Cyprus, you will need to submit to the tax service a number of documents that will confirm your income and ensure that the tax calculation is correct.

  1. Form V. D. 91. This is the main document that is required to pay tax on rental income. The form contains information about your income and calculations, and is the basis for determining the tax rate.
  2. Copy of the lease agreement. This document confirms the lease of your property and allows the tax service to take into account all income and expenses related to the lease.
  3. Documents confirming your ownership of the property. This may be a certificate of ownership or other document confirming your rights to the property.

In addition to these documents, you will have to fill out declaration of rental income. This return provides a complete picture of your rental income and allows the Internal Revenue Service to ensure that you pay your taxes in full and on time.

Keep in mind that it is important to keep all documents and receipts related to your property and its lease. This will help you avoid potential problems with the tax service in the future.

Renting out real estate in Northern Cyprus can be a good source of income if you approach this issue responsibly. It is important to keep in mind your tax obligations and comply with all legal requirements to avoid unpleasant surprises.

Remember that real estate for rent is not only income, but also obligations. Therefore, it is important to know and understand all the nuances of taxation when renting out real estate in Northern Cyprus.

Frequently Asked Questions

  • When renting out real estate for long-term or short-term rent, the tax is from 10 to 13% of income.

  • Yes, registration of a lease agreement with the tax service is mandatory for monitoring rental income and compliance with tax laws.

  • Please provide Form V. D. 91, a copy of the lease agreement, and proof of ownership of the property.

  • Yes, you can take into account the costs of maintaining and repairing real estate, which will help reduce the tax base and the amount of tax paid.

  • Registration of a rental agreement costs approximately US $ 42, but the fee may vary depending on the year and the specific situation in the country.

  • An unregistered rental agreement may result in penalties for tax evasion.

  • Yes, tax rates may change depending on the legislation, so we recommend that you regularly update your knowledge on this issue.

  • For long-term rentals, various discounts and benefits can be provided, including tax deductions for landlords. It is recommended to contact a professional to complete all the necessary documents.

What tax do you have to pay when renting out real estate in Northern Cyprus?

  • When renting out real estate for long-term or short-term rent, the tax is from 10 to 13% of income.

Do I need to register a rental agreement with the tax service?

  • Yes, registration of a lease agreement with the tax service is mandatory for monitoring rental income and compliance with tax laws.

What documents are required to pay tax when renting out real estate?

  • Please provide Form V. D. 91, a copy of the lease agreement, and proof of ownership of the property.

Can I reduce the amount of tax paid?

  • Yes, you can take into account the costs of maintaining and repairing real estate, which will help reduce the tax base and the amount of tax paid.

What is the cost of registering a lease agreement with the tax service?

  • Registration of a rental agreement costs approximately US $ 42, but the fee may vary depending on the year and the specific situation in the country.

What happens if you don't register the lease agreement with the tax service?

  • An unregistered rental agreement may result in penalties for tax evasion.

Can tax rates change?

  • Yes, tax rates may change depending on the legislation, so we recommend that you regularly update your knowledge on this issue.

What benefits and discounts are available for long-term rentals?

  • For long-term rentals, various discounts and benefits can be provided, including tax deductions for landlords. It is recommended to contact a professional to complete all the necessary documents.

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