Investing in Turkey: rules for buying real estate
Real estate in Turkey is popular among foreign investors, due to the accessibility of the transaction. The procedure for acquiring objects here is almost identical for citizens and non-residents. However, the rules of purchase of real estate still have their own peculiarities for foreigners, and they must be taken into account before the deal.
For example, in the real estate market, there are restrictions for residents of three countries – Armenia, Syria, and North Korea. Their citizens do not have the right to purchase property in Turkey. Also, the Greeks are able to access facilities only in certain cities and regions of the country.
To purchase an apartment or house in Turkey, buyers from other countries must take a special permit from the relevant authorities. However, in most cases, realtors from local real estate agencies undertake such an application. If the purchase is made directly from the builder, this step is performed by them.
In the process of agreeing on the terms of the deal, the buyer needs to reserve the object. To do this, he leaves a fixed deposit. For Turkish citizens, the amount is determined by the seller.
Next, the realtor checks the necessary documents, and if all is well – the buyer and seller sign a contract specifying the date of purchase/sale and other conditions, such as the scheme of payments at the registration of installments. All points of the contract shall be certified by a notary.
The amount of the transaction is made by bank transfer, and cash payment is allowed only at the final transfer of ownership. This document is issued at the Land Registry Office.
Realtor commission in Turkey is 3% of the transaction amount, and it is paid by both sellers and buyers. In the case of the purchase of new construction, this percentage is already included in the cost of housing. In addition, a foreign investor will need to pay property tax, its size is about 0.2% of the value of the object. In the case of the purchase of the villa, the fee is charged only on the area of the house, but not on the land. It is also obligatory to insure the property against earthquakes, which is due to the peculiarities of the terrain in Turkey. The amount depends on the area and type of property. Need to pay a one-time property tax, its amount will be equal to 4% of the agreed price for the object. VAT is 1%, but if the property exceeds 150 square meters, the tax can be up to 18% of the value.
It is important to be aware of the rules of resale of the purchased object. If it was put up for sale less than 5 years after purchase, then the seller will need to pay capital gains tax, its size – from 15% to 35% of the difference between the value of the object.