Northern Cyprus Laws - Will the TRNC Government Be Able to Win Back the Trust of Foreigners?

The real estate market in Northern Cyprus has seen significant changes, with an 82% drop in sales as of November 2024. This unprecedented decline has affected one of the country’s largest sectors, largely as a result of the new laws enacted by the TRNC government. These new restrictions on residency permits related to rentals and purchases, limitations on foreign ownership to only one property, and the shutdown of foreign and trust companies have raised widespread concerns among foreign nationals, many of whom view these measures as targeted efforts to restrict their property ownership rights.

The most surprising development came in May 2024, with the passing of a law requiring all taxes — including those previously without deadlines — to be paid by November of the same year. This law applies not only to current sales but also to all previously concluded transactions. Such stringent requirements have heavily impacted the market, particularly in the secondary housing sector, with property prices for apartments and villas decreasing by an average of 20%, 30%, and in some regions, even 50% in the first months after the law took effect.

Amid rising economic costs, slowing sales, and growing tax obligations, the market experienced stagnation by October 2024. These changes have also affected rentals — in high-demand areas like Famagusta, Iskele, and Bogaz, rental properties were previously scarce, whereas today many apartments remain vacant despite lower rental rates.

In early November, the government officially acknowledged an 82% drop in sales and is now reviewing the newly enacted laws. According to government representatives, amendments are expected by February 2025. Whether Northern Cyprus can regain the trust of foreign buyers remains an open and pressing question, crucial for the future growth of the region.