TRNC Introduces Bank-Only Rental Payment System

A new practice has been introduced in the Turkish Republic of Northern Cyprus (TRNC) where rental payments must be made through banks. Minister of Finance Ozdemir Beroa explained the benefits of this new system.

According to the Minister, the system allows for better record-keeping and tracking: by processing rental payments through the bank, these transactions are officially documented. This means that payments from both parties can be monitored and used as evidence in case of any disputes. Having official payment confirmations also proves helpful during tax audits.

Additionally, for those receiving rental income, paying through the bank will help streamline the tax filing process and ensure more accurate declarations. The measures implemented by the Ministry of Finance aim to prevent tax evasion. By requiring rental payments to be made through a bank, the system makes it more difficult for individuals to evade taxes.

The new regulations are also designed to improve security and reduce fraud: risks are minimized when payments are processed via the bank. Cash payments can lead to issues such as lost money or difficulty proving that a payment was made. These risks are significantly reduced with bank transfers or electronic funds transfers (EFT).

The Minister further explained that paying rent via the bank allows for reminders to be set for payments on specific days each month, saving both the tenant and the landlord time. Additionally, there's no need to physically carry cash.

Banking payments also make it easier to track rent increases. Payments made through the bank system are traceable, allowing the government to monitor rent hikes and ensure they remain within legal limits.

As a reminder, starting this year, all housing rental fees and payments in the TRNC must be made through the bank. The relevant decree was published in the "Official Gazette" on November 14, 2024, and took effect on January 1, 2025.