From January 1, 2025, a new rule will come into force in the Turkish Republic of Northern Cyprus, obliging all landlords and tenants to make payments for rental housing exclusively through banking institutions . The decree, published in the official gazette of the TRNC on November 14, 2024 , makes payment of rent through a bank mandatory for all types of rentals - from long-term to daily. This innovation is aimed at increasing the transparency of financial transactions , ensuring documentary records and simplifying control over tax obligations .
In accordance with the new “Regulation on the mandatory collection and payment of transactions for the rental of workplaces and housing through banks ,” all payments for rental housing , including short-term rentals (weekly, daily and similar), must be made through banks . Key provisions of the law include:
Mandatory transition to bank payments
Payments for rental housing will be accepted exclusively through banking institutions . This applies to all types of payment, including:
• Money transfers;
• Electronic transfers via EFT/EÖS ;
• Use of debit and credit cards ;
• Payments via checks .
Each payment made through the bank will be accompanied by the issuance of a receipt or account statement . These documents will become the main evidence of rent payment.
Short term rental
The innovation also applies to short-term rental housing , which makes the process transparent not only for long-term rental relationships, but also for tourist properties rented daily or weekly .
Fines for violation
Tenants who pay in cash and landlords who accept payments in person risk facing administrative fines. However, if tenants who violate the rule report such violation to the Internal Revenue Service within five business days , they will not be .
Why are these changes being implemented?
The TRNC Ministry of Finance explains that the purpose of introducing mandatory bank payments is to:
• Improving tax control:
Paying rent through a bank allows you to record all income, which makes it easier to calculate taxes and minimizes tax evasion .
• Transparency of transactions:
Bank receipts and statements become official evidence of payments, which eliminates possible disputes between the tenant and the landlord .
• Protecting the rights of tenants:
With documented payments, tenants are protected from unfair demands from landlords.
How will payments be made?
Tenants will be able to pay rent through the following banking channels :
1. Bank branches:
Personal visits to make payments.
2. Internet banking:
Electronic transfers through banking applications or websites.
3. ATMs:
Making payments through self-service terminals .
4. Using payment cards:
Possibility of payment via debit and credit cards .
Each payment must be accompanied by receipt of a supporting document (receipt, account statement or electronic notification), which will become the main evidence of the fulfilled obligation.
What happens if you pay rent in cash?
For violation of the new law, penalties for:
• Tenants paying in cash;
• Landlords accepting cash payments.
However, if the tenant reports the fact of payment in cash to the Tax Office within five business days , the penalty for the violation will not apply .
How will the innovation affect the rental market?
For tenants:
1. The level of transparency of transactions . The tenant will always have documentary proof of payment .
2. The process of resolving disputes with the landlord .
3. The possibility of double charging .
For landlords:
1. All income is recorded in the bank , which simplifies tax reporting .
2. Confidence in landlords increases, since all payments go through trusted financial channels.
3. The risk of receiving counterfeit bills or other cash fraud is eliminated.
For the state:
1. Tax control , which increases budget revenues.
2. The level of the “shadow economy” .
3. Monitoring the rental market .
Conclusions
From January 1, 2025, the transition to mandatory bank payments for rental housing in the TRNC will be an important step towards creating a transparent and fair system of interaction between tenants and landlords. These changes are aimed at protecting the interests of all parties, increasing confidence in the real estate market and strengthening tax control .
If you are a tenant or landlord, it is recommended that you familiarize yourself with the new requirements in advance and prepare for the transition to a bank payment system to avoid fines and other inconveniences.
Start taking advantage of bank payments now so that the new year begins with confidence in the legality and transparency of your transactions!
