Historical Context of the Turkish Republic of Northern Cyprus
In 1974, Turkey invaded Cyprus, ultimately establishing a separate state in the northern region of the island. Nearly a decade later, in 1983, the separated state declared its independence and adopted the name the Turkish Republic of Northern Cyprus (TRNC).
Northern Cyprus is recognized as a separate country only by Turkey, and per United Nations Resolution 541 (1983), the UN regards this declaration of independence as a violation of the 1960 Establishment and Guarantee Treaties. Consequently, countries worldwide do not recognize TRNC as an independent state.
The invasion of Cyprus profoundly affected the country and its inhabitants. For instance, the case presented before the European Court of Human Rights (ECtHR) concerning Cypriots’ property rights highlighted these impacts. In the Cyprus v. Turkey ruling, the ECtHR examined the consequences of Turkey’s occupation of Northern Cyprus. The Court found Turkey responsible for violating the property rights of Cypriots who were displaced from their homes, losing access to their properties and residences. This ruling reinforced numerous protected rights for Greek Cypriots, most notably affirming the Cypriot people’s property rights under the European Convention on Human Rights and emphasizing Turkey’s obligation to recognize these rights.
The 1974 invasion displaced nearly one-third of the population, significantly impacting the island’s economic development. Cypriots suffered considerable losses in land, population, and personal property in the occupied areas.
Real Estate Investments in the Turkish Republic of Northern Cyprus
While real estate investments in Northern Cyprus may appear attractive due to lower prices, it is crucial to acknowledge the legal complexities and risks associated with investing in these areas. Owning property in Northern Cyprus, obtaining title deeds, and conducting transactions in the northern part of the island could expose your funds to potential risk.
Many properties in Northern Cyprus face ownership disputes due to the displacement of thousands of residents from their permanent residences in 1974, as those who owned land in Northern Cyprus before 1974 are still legally recognized as the rightful owners.
It is worth noting that on October 20, 2006, the Criminal Code of the Republic of Cyprus was amended regarding property transactions. This legislative amendment states that it is illegal to buy, sell, promote, or lease a property without the owner’s consent (i.e., the registered owner in the Republic of Cyprus’ Land Registry, specifically including Greek Cypriots who emigrated from Northern Cyprus in 1974). Violating this law carries a maximum prison sentence of seven years. Attempting such an action is also a criminal offense, punishable by up to five years of imprisonment.
Therefore, if you are considering investing in real estate in Northern Cyprus, it is essential to understand the economic implications due to Turkey’s occupation of northern Cyprus. These implications may include possible refunds, compensation payments to original property owners, and other losses resulting from the occupation.
It is highly recommended to consult an accountant and a lawyer regarding foreign investments to thoroughly assess the complexities of the investment and minimize potential losses and costs. Our firm specializes in international taxation, and our team is prepared to assist in your business activities. To schedule an introductory meeting, click here.
