Erdal Nuhbasa – Law and Consulting Firm – Legal Services
ERDAL NUHBASA
LAW AND CONSULTING FIRM
Erdal Nuhbasa – Law and Consulting Firm – Legal Services
ERDAL NUHBASA
LAW AND CONSULTING FIRM
Foreign nationals from countries approved by the Turkish Council of Ministers can purchase property in Turkey. In any condition, foreign individuals are limited to owning a maximum of 300,000 square meters of land per person. Additionally, they can only acquire property up to 10% of the total land area within any given locality. The Council of Ministers also has the discretion to increase this limit on a case-by-case basis.
Before moving forward with a real estate purchase, foreign buyers must apply for approval at the local land registry office. Once the official confirmation is granted, the acquisition process can proceed. The land registry system used in Turkey is a robust and secure system where every real estate transaction is officially registered.
Are There Any Special Procedures for Foreigners Buying Property?
Aside from the need for land registry approval, foreign nationals follow the same property acquisition process as Turkish citizens. So, the process of buying real estate in Turkey does not differ between foreigners and Turks. And buying offices and villas or apartments are subject to the same formal procedures.
All individuals should be careful before buying real estate and should conduct factual and technical research both at the title deed office and at the location of the real estate.
As everywhere in the world, real estate in Turkey is not very cheap, so there are things you need to do know not to waste your money. Of course, as a lawyer, my first advice to you will be to get your property with the help of a lawyer, you will pay around %3-5 more money while you are buying your property, but at the end you will be %100 sure that you will not be fraud. However, if you want to do these transactions on your own, then I recommend that you read this article carefully.
In principle, there is no difference between Turkish residents and non-residents with respect to the taxation of property purchases. Foreigners are subject to the same rules as Turkish citizens.
However, in May 2017, a law on VAT-free real estate acquisition for foreigners was passed by the parliament. In this sense, it will be more advantageous to be a foreign national in real estate purchases in the form of the first sale of the title deed of new buildings built as residential and business premises in Turkey.
Foreign heirs may inherit immovable property, subject to the following conditions:
If the heir does not have the right to acquire the property due to any of the above restrictions, the heir is obliged to sell the property to an acceptable third party within a maximum of one year. Otherwise, the property will be sold by the Ministry of Finance and the sale price will be paid to the heir.
The short answer is “It is not a must“. Property acquisition can be completed through a transaction directly with the landowner or, alternatively, the services of a real estate agent can be used to find a suitable property that meets the relevant requirements.
Real estate agents are paid a commission once the transaction is completed. In accordance with market practice, real estate agents may set their fees at 3-4% of the purchase price (including VAT). This commission is usually shared equally between the buyer and seller.
The biggest problem when buying a house in another country is that the property is sold for more than the asking price. If you are not a local person living in the country and you are more likely to be cheated by a greedy landlord. What you need to do to avoid this situation is: either to get professional help or to do a good and detailed research.
First of all, you can make a price evaluation by looking at comparable houses close to the house you will buy. It is also important to research how much the same house is sold for on the internet sites. Finally, you can get information about the prices of houses through your acquaintances living in Turkey.
There are real estate appraisal companies that determine the current market value of properties. These companies can be used to gauge the accuracy of the purchase price. Alternatively, real estate agents working in the neighborhood can be visited to understand the market value of properties in the area.
Before buying any real estate, it is advisable to conduct a due diligence review to obtain information on the legal status of the target property and to identify foreseeable legal risks and their impact on the use of the subject property for its intended purposes.
The main information and documents to be considered when conducting this due diligence are:
If the reason for the lack of a certificate of occupancy is a difference between the completed building and the building permit, the relevant municipality may demolish the building or require it to be modified in accordance with the building permit. In this case, the landowner may also be subject to various fines
Under Turkish law, the sale of a property can only be realized in the presence of the land registry with the participation of both the seller and the buyer. In order to transfer ownership, the parties must execute a standard transfer document prepared by the relevant land registry. The purchase of property can be realized by buying directly from existing owner.
Another alternative is before the property is sold, the seller and the buyer can sign a preliminary “Contract of Sale Promise”. This agreement is the only preliminary agreement that can be validly signed between the parties and, in order to be binding, it must be drafted by a notary public and signed in the presence of a notary public.
In order to qualify for protection against third party claims, the contract of promise to sell must be registered in the land registry. In the event that the contract of promise to sell is not registered, the purchase made by a third party acting in good faith will be valid. The annotation will be valid for a period of five years.
The buyer (foreign natural person) or his/her legal representatives can buy the property. So, the buyer doesn’t need to be in Turkey, If he/she give power of attorney, such power of attorney must be prepared under the Turkish law. To learn how to give power of attorney you can check my previous article: https://erdalnuhbasa.com/giving-poa-to-a-lawyer/
The power of attorney to be used for the acquisition of the property must include the full name and address of the legal representative(s), as well as all authorizations granted to the legal representatives for the acquisition of the property.
If the power of attorney is prepared and executed abroad, the following steps must be followed:
A tax number is requested from the buyer when acquiring property at the land registry office. You can obtain a tax number by applying to any tax office with his/her passport (translated and certified by a notary public).
Every property purchase by individuals is subject to certain transaction taxes such as “Title Deed Fees”, “Value Added Tax”, “Stamp Duty” and “Notary Fees” and certain expenses such as “Notary Costs”.
In addition, owning property in Turkey requires the payment of a wealth tax called “real estate tax”. Income from property, such as rental income or appreciation gains on the disposal of real estate, is also subject to “Income Tax“. Each of the above-mentioned taxes is subject to a specific calculation, payment and declaration rules, and of course there are exemptions for some of them. For detailed information you can contact me.
In the sale and purchase of properties, the buyer and seller separately pay a title deed fee of 2% of the sale price.
If you want to buy real estate in Turkey, the above process awaits you. When buying an apartment in Turkey, it is crucial to first understand the legal framework and procedures involved in property purchases by foreigners. Ensuring that the property is free of any legal disputes, encumbrances, or debts, as well as verifying that all necessary permits are in place, can protect buyers from future complications. Engaging a trusted lawyer who specializes in Turkish real estate law can be immensely beneficial for navigating the legal landscape and ensuring compliance with the country’s regulations.
The second key consideration is the location and property type. Turkey offers a wide range of locations, each with distinct advantages depending on the buyer’s objectives. Coastal cities like Antalya or Alanya are popular for holiday homes, while Istanbul offers prime investment opportunities due to its status as a major global city. Buyers should evaluate factors like infrastructure, transportation, neighborhood development, and proximity to amenities like schools, hospitals, and shopping centers when selecting an apartment.
Finally, understanding the financial aspects is essential. Buyers should consider the overall costs, which include the purchase price, taxes, notary fees, and other related expenses. It is also important to explore mortgage options or payment plans available for foreigners if financing is needed. Conducting due diligence on the property’s market value, future potential for appreciation, and any ongoing maintenance or service fees will ensure a sound investment decision and long-term satisfaction.
Feel free to contact with me for more information.
