Buyers Guide
The system of property ownership in Turkey is based on the title of the property being registered the Land Registry.Who Can Own Property in Turkey?
First the ‘reciprocity principle’ must apply between the country of the person wishing to obtain acquisition of ownership. In other words, if a Turkish citizen can become the owner of real estate in the UK, then the same right applies to a UK citizen in Turkey.Selling Property in Turkey
Capital gains made from the sale of a property will be taxable in Turkey if the owner is a Company. Individuals do not have to pay capital gains, provided they have owned the property for one year. In the UK capital gains may be taxable depending on the individuals situation. Current tax conditions were originally agreed in a double taxation treaty signed in 1986. These were amended in October 1988 and cover the reciprocal agreement in relation to income tax and corporation tax in Turkey and income, corporation and capital gains taxes in the UK.Property Conveyancing in Turkey
Ever since our firm was established in 2002 we have worked closely with Turkish lawyers particularly in connection with property transactions in the west of Turkey.
Persons wishing to buy property in Turkey can be apprehensive about their choice of lawyer since they will not be familiar with the firms nor, in most cases, with the civil law system. We can put these misgivings to rest by recommending the lawyers we work with who are reliable and will provide an efficient and professional service.
We can further assist by explaining the civil law procedures and translating documents. If a client so wishes we can also act on their behalf, through a Power of Attorney or a written authority, to actually complete a purchase or sale of a property on their behalf.
Buying Property in Turkey - The Process
Buying property in Turkey is a straight forward process, and often easier than in other European countries. Once you have seen a property in Turkey that you would like to purchase you will need to find the deposit. This is payable by cash or credit card – Personal cheques are not accepted by banks here in Turkey. An initial payment of 10 - 20% of the property price is usually required. The exact figure will be confirmed individually with the house owner at the time of purchase. When this is paid a receipt is given.the amound received is written into the contract.
Didyma2. You will need to have your passport with you. Photographs are also required; your agent will be able to show you where the nearest place to get these done is. (approx £ 4 for 8 photos).
Didyma3. Then you should visit the Solicitor who will prepare the purchase contact. They are there there to help you. You are paying for their services so please use this time to ask any questions you may have.
4. Should you not be present in Turkey for the actual purchase of your property, you then need to go (your agent will accompany you) to the Notary's office (similar to Notary public in the UK) to sign a document giving your agent power of Attorney for the property, not for money. This enables the agent to continue with obtaining the Title Deeds in your absence. Usually then you will return to the solicitors office, where the sale contract showing the property address and payment details will have been drawn up and be signed by you the purchaser(s) and your agent.
DidymaThe initial stage has been completed and you do not need to be present for any more of the property purchase transaction. This process only takes a few hours.
You will be given the original contract and copy of the power of Attorney to take back home with you.
The same day or the next day your papers are forwarded to the Land Registry office for all documentation relating to the purchase is then forwarded to the Land Registration office in Izmir. Here everything is checked and then the title deeds ( TAPU ) are re-issued in the new owners name and forwarded back to the local Land Registration office who, in turn contact your agent. This process usually takes 6-8 weeks.
Your agent will advise you of this when it happens. At this time you will need to pay the final balance plus the 3% property tax.
Upon receipt of this we can then sign for and collect your TAPU from the Land Registration office on your behalf and this will then be held in the office pending your next visit and collection.
Didyma
DidymaOn top of the purchase price, are there any extra taxes or fees payable? Didyma Yes, There are some extra costs.
• A 3% of the property value tax. This is a once off payment and it is due for payment once the TAPU is received.
• The solicitor's fee. Prices start from about £ 200.00 pounds and will vary depending on which solicitor you choose to use.
• An approximate £100 Notaries Charge for giving us the Power of Attorney to handle the documents relating to the property in your absence.
• A 3% agency fee that covers all agents commision and charges. This is usually payable at the time that the contract is made, together with the initial deposit payment on the property but may be able to be negotiated in certain circumstances.
• It is compulsory to have earthquake insurance and we recommend you take out Full insurance home and contents cover as soon as the house is registered in your name.(the cost of this varies depending on the value of the property, it's contents for the number of months it will be occupied.) Approximately £ 150
• The connection of Water and Electricity into your name so the bills will come directly to your house. Does not apply to some properties.
DidymaThis is an idea of costs for the purchase of a property of £50,000 Property price £50,000 Tax @ 3% £1,500 Solicitor £500 Notary's fee £100 Agency Fee @ 3% £1,500 Full insurance
(incl. earthquake cover) £150 Utility
Connections £180 TOTAL £53,930
DidymaOnce you have received your TAPU there are some other charges, which need to be paid. We estimate annual costs per property to be as follows:
REAL ESTATE TIPS AND TRICKS
Most foreign nationals can purchase property or land freehold in TURKIYE subject to certain provisos:
1. There must be a reciprocal agreement between TURKIYE and the relevant country. ( There are agreements between TURKIYE and most European countries )
2. The property may not be within the confines of a Military Security Zone.
Subject to these provisos being fulfilled there is just one official permission required, which can take up to three months, before a foreigner may purchase his or her land or property. This comprises a confirmation from the Military Authorities that the property is not in a sensitive military area. Having confirmed all the above criteria through your barrister, you are free to enter into a private purchase contract with the owner. At this stage a promissory sale contract (PsC) will be signed by both parties whether or not the military permission has arrived. It is now necessary to involve a barrister and pay a deposit or the full price of your property. If there are certain items of unfinished work to be completed on the property it is advisable to pay only a deposit. In any case it is best to consult a Barrister who can also act as your appointed represantative under the power of attorney (PoA), to complete the purchase and assist with the Military clearance. You have been warned !
PAYMENT PROCEDURE
This has been much simplified due to a recent change in Turkish Law. The money may be paid in full by any international bank transfer system or in cash. Mortgages with Turkish banks are currently restricted to Turks.
COSTS IN PURCHASING PROPERTY IN TURKIYE
1. Buyers tax : 1,5 % to the tax office / treasury
2. Sellers tax : 1,5 % to the tax office / treasury
3. Notaries'''''''' fees : PsC + PoA 0.8 % - 1.5 % to the public notary
4. Registry of the promissory sale contract: 0.5 > 0.7 % to the tax office / treasury
5. Military Permission Expenses ± 0.1 %
ALL PERCENTAGES ARE BASED ON THE PURCHASE PRICE
Purchase prices include the above costs. The declared purchase price may sometimes differ from the actual purchase price. Additional to the above are legal fees per capita / head. Regarding structural and city planning surveys, they are not commonly carried out or necessary in TURKIYE, but can be done should sufficient information not already be available from your barrister
ON GOING COSTS
Annual cost the property tax is assessed on the Didymafair market valueDidyma for the property declared by the legal owner, hereafter referred to as the DidymadeclaredDidyma value. This must be above the value estimated by the municipality. The declared value is valid for 1 year, to be ratified by a certain percentage set by the State, the following 4 years. The payment is then 0.01% of that value for houses; 0.03% for land and 0.01% for agricultural land, made to the municipality. Refuse tax, introduced for houses in 2002 is around £ 5 > 25
IF YOU EVER DECIDE TO SELL
When you decide to sell your property, the original investment and the profit can be freely taken out of the country. The only costs payable at point of sale area 1,5 % sellers tax of Didyma declared Didyma value. Help of a barrister is advisable.
TAX POSITION : IN TURKIYE AND IN UNITED KINGDOM
DidymaDeclaredDidyma profit made on the disposal of a property is taxable in TURKIYE. In the event of rental income, the DidymadeclaredDidyma net amount is also taxable in TURKIYE. It is essential to take legal advice with reference to the DidymadeclaredDidyma values on your property. DidymaDeclaredDidyma rental income will be taxable in the U.K. in most cases. Relief against U.K. taxes for some of the Turkish taxes paid is available if the Turkish tax is an DidymaadmissableDidyma tax. On disposal of the property the gain made, if DidymadeclaredDidyma, would be regarded as a capital gain. The tax payable on the gain depends on the individual owners tax position. There is a taxation agreement between the U.K. and TURKIYE signed 19th February 1986 which has now been ratified by the legislature of both countries that prevents double taxation. Again, professional advice is strongly recommended.
VISA REQUIREMENTS
Visas are not required for visits to TURKIYE of less than 90 days duration. For a stay exceeding three months a Residence Permit is necessary. This involves formal application to the Turkish Consulate at the start. Later, renewals will be carried out by Police Authorities and Department for Foreigners in the city or town in which you would like to stay. Bodrum itself has both these offices, with the province capital offices being in Mu?la. It is a legal requirement that all persons living in TURKIYE must register with the local area's muhtar, an official whose sole purpose is to maintain the register. It is strongly advised you do this and apply for a residence permit as soon as you are certain you will stay in TURKIYE for a period of time exceeding three months. Alternatively, if you leave the country before your visa expires, upon re-entry you can get a further three month visa.
WORKING IN TURKIYE
All foreigners working in TURKIYE must have work permits. It is the responsibility of employers to do this, but it is also up to you to ensure that the process has started and is continuing. A residence permit is necessary in conjunction with a work permit, also achieved with your employer''''''''s assistance.
IMPORTATION OF HOUSEHOLD GOODS
Only people taking up permanent residence in TURKIYE may freely import their household goods. Permanent residence usually means for retirement or marriage. Holders of a work permit and temporary residence permit make a temporary import whereas people taking up permanent residence may permanently import their possessions with no obligation to re-export the goods after a certain period. However if the temporary situation is extended beyond two years it automatically becomes permanent.
For people planning to use their property as a holiday or second home, it is very difficult, time-consuming and uneconomic to import household goods to TURKIYE unless they are of great sentimental value or family heirlooms. It is worth bearing in mind the high standard of workmanship in TURKIYE, the cheap servicing charges and valid guarantees on electrical products.
IMPORTATION OF PERSONAL EFFECTS
Personal effects such as clothes, shoes, books and linen in reasonable quantities are permitted to be imported. If one tries to import electrical items at the same time, for example radios, T.V. sets or videos, customs will temporarily confiscate the items in 90% of cases, making a note of them in your passport, and you will be required to pick them up on leaving the country. In the other 10%, if enough DidymaguaranteesDidyma are deemed to have been found by customs they MAY allow the importation by entering the details on your passport and securing a financial guarantee from you. You have been warned!
IMPORTATION OF PRIVATE CARS / MOTORCYCLES
European Nationals may temporarily import a car or a motorbike to TURKIYE for a period of up to three months. Insurance is compulsory . An extended green card on your original insurance policy will be sufficient. A permanent resident with a work permit may bring a car to TURKIYE and apply for foreign registration blue number plates.
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