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Concern continues over buying in North Cyprus

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For those who need to know more before deciding there is considerable advice on several threads on totallyproperty.com and opinions vary from don't go there, yes it's great to those who believe it is morally wrong to buy in this country 'occupied by Turkish forces' until the land ownership issues are sorted out.

In a nutshell several governments, including UK, USA, Russia, France and Germany have issued warnings on the purchase of property in the 'occupied' area of Cyprus.

That is because there are a number of practical, financial and legal issues associated with buying property in the north, most of which relate to the complex political situation.  These include the non-recognition of the 'Turkish Republic of Northern Cyprus', the suspension of EU law in northern Cyprus, the possible consequences for property of a future settlement, and the many thousands of claims to ownership from people displaced in 1974.

There is also a risk that, as a result of the disputed ownership of many of the properties, purchasers could face legal proceedings in the courts of the Republic of Cyprus, as well as attempts to enforce judgements from these courts elsewhere in the EU.

As one poster, Charis warns: 'Buying property in the occupied area of Cyprus could infringe upon the property rights of others involved. A violation of criminal and civil law could entangle the buyer in legal proceedings, financial damage, personal liability and the risk of losing money invested, as well as assets at home.'

Yet there are those who have happily bought in North Cyprus. The positives include very reasonable prices, 100% mortgages, cheaper cost of living and all year round sunshine. But at the end of the day the one clear piece of advice is – use a good lawyer.

Even in established markets there can be problems. Take France, for example. There are warnings on the same website that leaseback properties in France are proving difficult.

According to one post there is a potential timebomb in terms of re-sales and that some buyers will have to pay back tax if they opt out of a ten year agreement and even may not be able to sell at all and then have to sell back to the management company at a price that is not necessarily the going rate.

Poster Geordie describes them as 'gimmick' and advises investors to steer clear of them because of concerns over their commercial viability and the chances of selling for a profit.

An excellent analysis of the situation says there are three reasons for buying leasebacks in France and nine for not. The positives are no TVA to pay, rental income is from a hotel operation rather than individuals, and someone else is doing all the hard work.

The downside is that the guaranteed income is not all it appears, the time you can use the property is limited, you are tied in for a minimum of nine years, the contracts are complicated, if you opt out within 20 years you have to pay part of the TVA discount, if it ceases to qualify as a tourist residence you have to pay TVA, if it is licensed as a hotel and not apartments you can never live in it full time in the future, selling is complicated and there will always be a limited number of buyers. 

Investing in holiday lets in the UK poses the problem of which location is best, especially in terms of rental income out with the obvious summer season. Well a thread on the landlordzone.co.uk forum comes up with some answers. Apparently the Lake District is the best with 40 to 50 weeks a year attainable, Cornwall is very busy in the summer but quiet the rest of the year and Scotland popular all year around, especially for Christmas and New Year.

The forum raises one rather different point for the owners of holiday lets, especially in more remote areas. With lorry drivers going on strike in the UK, Spain and France, what happens if your customer can't get there or away because petrol stations run out of fuel?

Buying off-plan is extremely popular but one thing many investors sometimes forget is the cost of fittings. Kitchen costs in Poland have led some property investors in the country to believe that they are being ripped off by developers and suppliers.

A thread on the propertysecrets.net forum makes it clear that clients don't always feel they are getting value for money. Kitchens in Poland are costing several thousand pounds more than in the UK. It would also appear that a price is quoted but there is not complete transparency in terms of the cost of fitting, white goods and commission.

One person says they were quoted over £4,000 for a tiny studio kitchen. As Sanj points out; 'This issue is constantly being raised. Given that there are a large number of units coming to the final finish stages in Poland, many investors are asking the same questions regarding kitchen costings and transparency.'

Then there is always Ikea!

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