Buying Property in Turkey - Beyhan Emlak

Beyhan Properties offers a brief guide to buying Turkish property

Introduction      As a foreigner, buying property in Turkey is not difficult provided that you are eligible to do so legally, and that you are well advised, preferably by professionals. The ‘reciprocity principle’ must apply with the potential buyer’s country. For example, a Turkish citizen may become the owner of real estate in the UK, so the same right applies to a UK citizen in Turkey.
If visiting Turkey to view property you should be aware that there are many ‘freelance’ agents. They can be found in taxis, most shops and nearly all bars; you may even be approached by school children. The service they provide usually ends when the deposit is paid; they take their ‘commission’ and you can be left to find your own way through the purchase process. It is normal practice in Turkey for both buyer and seller to each pay a 3% commission to the estate agent. At Beyhan Properties we do not charge the buyer for our services.
You would be well advised to go to a reputable established agency for advice. At Beyhan Properties we will explain every aspect of purchase and guide you through each stage. We can recommend the services of a local English-speaking solicitor if you wish (preferred) and you can grant him power of attorney so that he can complete most or even all of the work in your absence.

Finances      Before choosing a property you should consider your finances. If borrowing money you should note that it is now possible to obtain a mortgage in the UK, financed by a major european bank and secured on a Turkish property. Mortgages are available for Turkish residential property located on the Turkish Riviera and Istanbul only, for the purposes of property purchase, refinance, and home improvements (contact us for more information). Rates are from 6.1% and are slightly higher if the property is rented.
If you are planning to secure a property with a cash deposit during a visit to Turkey it is best to pre-arrange large transactions with your bank or credit card company before departure from UK. Most banks will accept faxed transfer authorisation but without prior arrangement it may be difficult if not impossible. Large money transfers between UK and Turkish banks usually take 3 to 5 working days to process even in this computer age.
We can help you open a bank account (any currency) in Kalkan if you wish to transfer funds whilst here or prior to your arrival. Money on deposit in Turkish Lira accounts attracts high interest rates at the time of writing (15% after tax for short-term investment on 22.01.2007). On the other hand, exchange rates can fluctuate from day to day and our property prices are fixed in pounds Sterling.
In an effort to guard against fraud, most credit card companies automatically bar large unauthorised transactions in Turkey.

The Process      Once a sale is agreed the buyer must pay a minimum non-returnable deposit, usually 10%, to secure the property. A contract is drawn up at this stage and/or the buyer can give power of attorney (POA) to the agent or lawyer. Should the seller withdraw from the sale at any stage this deposit and any other monies paid will be refunded in full. Although it is not essential to engage the services of a solicitor or estate agent, the easiest way for foreigners to buy is to give POA to such a representative. The buyer then need not return to Turkey to complete, so saving valuable time and money.
The agent or solicitor submits copies of the title deed and the buyer’s passport(s) for Military and any other relevant Government Department clearances. This is to ascertain that the land or property being purchased by the foreigner does not lie within excluded zones such as National Forestry or Military areas.
Documentation to prove absence of debts and that the property was planned and built according to local regulations are submitted to the Land Registry Office in Kas prior to completion when Military permission is received. At the time of writing this takes about 2 to 3 months to be granted.
At completion the balance of the agreed price is sent by the buyer to the agent or lawyer and the transfer of title takes place at the Land Registry Office after payment of the equivalent of Stamp Duty. It is quite normal for a designated POA to accept and hold the title deed (Tapu) and keys in safety for the buyer.
After issue of the Tapu the buyer’s representative can, in their absence, arrange property registration for utilities (water and electricity), council tax (refuse collection) and set up compulsory earthquake insurance (DASK). Owners are advised to take out adequate buildings and contents insurance; we can advise where and how to do so.

Costs     Properties sold by us will not incur the standard 3% agent’s fee. When registering ownership of the property a charge similar to stamp duty must be paid. This is levied at the rate of 3% of the Tapu valuation of the property as declared by the local government. It is borne usually in equal 1.5% parts by the buyer and the seller. The compulsory DASK insurance premium is again based on the Tapu value, typically about 0.0022%. There are small charges for registering for utilities and there will be fees for notary services. If you use a solicitor, his fees could vary from £300 - £1,500 depending on the level of service.

Moving In      Foreigners require a residential visa before shipping house contents into Turkey from abroad, being connected to a land-line telephone service and buying a car. The visa can be obtained from the Turkish Consulate in London; their website outlines the fees and documentation required.
Foreign owners should make a Turkish Will. Foreign owned property in Turkey does not automatically revert to Government ownership on death as it does in some countries, but inheritance law is different and the simple act of making a Will locally will protect your beneficiaries and avoid protracted delays and legal costs.

Resale      Once the property is registered in your name you can immediately resell it. Capital gains made from the sale of a property will be taxable in Turkey if the foreign owner has owned the property for less than 4 years. In Turkey, unlike Spain and the Canary islands, when you sell a property all proceeds from the sale can be transferred out of the country.

Renting Your Property      Foreign owners renting their Turkish property must pay tax on rental income. This is calculated from gross income, less a personal allowance, less a percentage for property expenses. Tax bands vary, depending upon rental income. Owners from countries with a reciprocal taxation agreement with Turkey (e.g. UK) may offset tax paid in Turkey against income tax in their own country. There are considerable penalties for non-compliance. Contact us if you require more information.