In spring of this year, the Turkish government changed the procedure for transactions in the real estate market. The novelties concern foreign citizens who want to buy housing in the country. These rules of buying and selling real estate have nuances that are useful to know before the procedure of execution of the transaction.
New rules for buying and selling real estate: overview of the main points
All changes are fixed in an official document – Circular No. 1795. First of all the new rules refer to the procedure of obtaining an expert assessment of the object that a foreigner intends to buy or sell in Turkey.
The purpose of the innovations is to improve the processes in the real estate market and bring them to international standards. Besides, the rules will allow ordering the information and getting exact data about each transaction, as well as making the tax mechanism transparent and increasing the budget revenues.
Prior to the entry into force of the new rules in Turkey, the property ownership document specified the value of the object below the actual value, and therefore the tax applicable to the purchase was less than necessary. In the new version of the procedure, this was excluded. Now when buying real estate in Turkey the foreigner is provided with expert opinion where the real value of the object is. And the tax at registration of the property rights is calculated on the basis of this figure. The amount of tax is 4% of the total cost of housing.
In addition, the innovations affected developers and owners of objects from the secondary fund, whose ownership of the apartment from 5 years. Now he must pay income tax of 20%. The amount is calculated from the difference between the initial cost of housing and its sale price.
According to the law of Turkey, this tax should be paid only by those who own the property for no more than 5 years, and then they are exempt from payment.
The rules protect foreign buyers from deception by the seller or realtor. Now the buyer will be able to see the truthful information about the object in the expert report. The object is evaluated by companies that have been specially licensed. The expert’s opinion is paid and its cost is affected by the district where the housing is located and the rates set by local authorities. On average, 1,000 lire including VAT must be paid for a document in the country. At the same time, Turkish law does not specify which party pays for the expert opinion, but in most cases, such expenses fall on the shoulders of the buyer. The document is valid for 3 months and contains important data:
- cadastral real information about the site where the housing is located;
- land area with this object;
- type of object;
- housing costs and other information.
It should be understood that the new rules of buying and selling real estate in Turkey will entail an increase in prices at the market, so you should think about buying a home right now.