Turkey has become an attractive destination for both local and international real estate investors, thanks to its strategic location, booming economy, and recent changes in property regulations. Whether you’re looking to buy or sell property in Turkey, it’s crucial to understand the regulations governing the process. This article provides an in-depth look at the key aspects of buying and selling property in Turkey, ensuring you are well-prepared to navigate the Turkish real estate market.
1. Can Foreigners Buy Property in Turkey?
Yes, foreigners can buy property in Turkey, but there are restrictions. Citizens from most countries can purchase real estate, except those from specific nations like Syria, Armenia, and North Korea. Additionally, foreigners cannot own property in military or strategic zones.
Since 2012, Turkey has simplified its property acquisition process for foreigners by abolishing the “reciprocity” rule, which required citizens of other countries to allow Turks to buy property in their homeland. This change has significantly boosted international investment in Turkey’s real estate market.
2. Key Steps for Buying Property in Turkey
- Selecting the Property: The first step is to choose the property you’re interested in. Whether it’s residential, commercial, or land, it’s advisable to work with reputable real estate agents or developers who can guide you through the available options and help you avoid potential pitfalls.
- Property Title Deed (Tapu): The Tapu is the official document showing ownership of the property. Once the buyer and seller agree on the terms of the sale, they must register the sale at the Tapu office, where the transfer of ownership is finalized.
- DASK Insurance (Earthquake Insurance): In Turkey, earthquake insurance (DASK) is mandatory for all properties. You will not be able to complete the property purchase or access utilities like water and electricity without this insurance.
- Military Clearance: Foreign buyers must apply for military clearance, ensuring that the property is not located in restricted military zones. However, in many urban areas, this clearance process is automated and handled swiftly.
- Getting a Tax ID: As a foreign buyer, you’ll need to obtain a Turkish Tax ID number. This can be done easily at a local tax office. This ID will be used for any financial transactions related to the property.
- Payment and Purchase Contract: Once all legal checks are completed, the buyer and seller sign the official sales contract, and the payment is made. Typically, this involves transferring money via a bank account to ensure traceability. Cash transactions are discouraged.
3. Fees and Taxes Involved in Buying Property in Turkey
Several fees and taxes are involved in the property-buying process in Turkey:
- Title Deed Transfer Fee: This is typically 4% of the property’s declared value, split between the buyer and seller unless agreed otherwise.
- VAT (Value Added Tax): Residential properties smaller than 150 square meters are often exempt from VAT for foreign buyers, but larger or commercial properties may incur VAT up to 18%.
- Annual Property Tax: Once you’ve purchased a property, you’ll need to pay an annual property tax, which ranges from 0.1% to 0.6% depending on the type and location of the property.
- Lawyer Fees: Hiring a lawyer to guide you through the process is optional but highly recommended, especially for foreign buyers. Legal fees generally range from 1% to 2% of the property’s purchase price.
- Notary Fees: If you’re purchasing off-plan or need to notarize documents, you will also incur notary fees, which are relatively minimal.
4. Buying Property with a Mortgage in Turkey
Foreigners can apply for mortgages in Turkey. Most banks offer up to 70% of the property’s value to foreign buyers, with repayment terms ranging from 5 to 20 years. However, buyers must provide proof of income, an employment record, and other financial documents.
5. Regulations for Selling Property in Turkey
- Capital Gains Tax: If you sell your property within five years of purchase, you will be subject to capital gains tax, calculated based on the increase in the property’s value since it was bought. If you sell after five years, no capital gains tax is due.
- Settlement of Debts: Before the sale, the seller must ensure that all taxes and utility bills are fully paid. Failure to do so could delay the sale process.
- Real Estate Agent Commissions: Typically, real estate agents in Turkey charge 2-3% of the property’s sale price as their commission. This fee is usually split between the buyer and the seller.
6. Turkish Citizenship by Investment Program
Turkey offers a Citizenship by Investment Program, which has attracted a large number of foreign investors. To qualify, foreigners need to purchase property worth at least $400,000 and commit to holding the property for a minimum of three years. This program provides a fast track to Turkish citizenship and offers an attractive opportunity for international investors.
7. Special Considerations for Foreign Buyers
- Banking: Foreign buyers are encouraged to open a Turkish bank account for property transactions. It is a legal requirement for the payment of the purchase price and helps streamline the process.
- Currency: Since 2018, property transactions must be completed in Turkish Lira (TRY) due to a regulation introduced to stabilize the country’s economy. However, many contracts include a currency conversion rate based on the exchange rate on the day of purchase.
- Residency Permit: Foreigners who purchase property in Turkey are eligible for a renewable short-term residence permit. This is especially beneficial for those looking to live in Turkey after buying real estate.
Conclusion
Buying or selling property in Turkey can be an exciting yet complex process. It is essential to understand the legal and financial implications, especially if you are a foreign buyer. Working with experienced real estate professionals, understanding the local regulations, and adhering to legal procedures can ensure a smooth and successful transaction.
At Realty Homist, we specialize in guiding both local and international buyers and sellers through every step of the property transaction process in Turkey. From legal consultations to property management, we ensure that your investment journey is seamless and secure.
For any inquiries or further details, feel free to contact us. We’re here to help you make the most informed decisions regarding your property investments in Turkey.
+905060308008 | sales@homist.com.tr