Buying property in Turkey - turkey property for sale

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The Turkish legal system derives from European Civil Law system and so it differs from UK Common Law system However; property ownership in Turkey by Turkish or foreign nationals, is a constitutionally recognised right. Furthermore, the protocol under European Human Rights and the Main Provisions Agreement guarantees these rights, but at the same time accepts that individual ownership may be restricted in accordance with the general principles of the Law of Nations.

As in other European countries, there are some implications that are associated with property acquisition by foreign nationals in Turkey. According to the Turkish Law the property acquisitions by foreign nations are subject to following provisions;

Reciprocity Agreement

There must be a reciprocity agreement between Turkey and the buyer’s country of origin. There is a bilateral agreement with the UK and the Republic of Ireland; therefore, there are no restrictions applicable to British and Irish citizens wishing to purchase properties in Turkey in accordance with the Turkish legal system.

The Military Permission

Properties in the Military Forbidden Zones and Safety Regions cannot be transferred, sold, or rented by foreign nationals. As a formal practice, the Land Registry Office contacts with the Army Headquarters for clearance once the application is received from a seller intending to sell to a foreign buyer. This is part of the Security Investigation process, which takes between two and three months. According to new law passed in July of last year the military forbidden zones will be centralized. This aims to cut to the security investigation process from two – three months to two – three weeks.

30-hectare limit

There is a limit on the total area that a buyer from overseas can purchase. Foreign nationals cannot acquire larger than 30- hectare properties n Turkey.

Village law

A recent change in the law (it was passed in July of last year) abolished restrictions on foreigners acquiring properties in villages previously, properties purchased by foreign nationals, had to be within specific municipality borders.

The new law is now fully implemented and buyers from abroad can purchase properties in rural areas. This restriction change is also in line with Turkey’s new Foreign Direct Investment Law, where the differences between foreign and local investors are minimised.

Choosing way to Purchase of Property in Turkey:

Property purchases can be conducted in the following two ways:
• Conducted in Tapu Dairesi (Land Registry Office); or
• Performed in Noter (Notary Public).

Both practices are legitimate methods of sales. However, a sale performed in the Land Registry Office is the most common way of purchasing property in Turkey.

The transaction is completed in the Land Registry Office in front of a Land Registry official. The title deed holder (owner) or their legal representative gives consent for issuance of a new title deed with the buyer’s details At this point, the money for the property exchanges hands. The sale performed in the Notary Public gives the purchaser a right to register the property at a later stage in their name in the Land Registry Office.

In either case, the seller must have the authority to sell the property. Should the seller be acting on behalf of the owner or the part owner, a power of attorney clearly mentioning this authority is required.

Property Buying Process in Turkey

STEP 1- Finding a Property and Reservation Contract

First step is finding a Turkish property for sale that you want to buy and agree a price with the seller and sign a reservation contract, which reserves the property generally 4 weeks until sign a full binding contract. Reservation fees are variable, generally £ 2,000.00. Please be aware of that the reservation fees are generally unrefundable.

STEP 2- Legal Searches and the Report

During reservation period, we will do legal & local searches and will send you a detailed report. It is important to check followings before you make any commitment to buy property:

• Property status - details of the property and whether the property is in the restricted area or not (this would be an opinion based on previous sales in the area).The restriction may be a result of property being in a military zone or a nature protection area.
• Property ownership - the property belongs to the vendor and they have a legal authority from the owner to sell it.
• Constraints - existence of pre-emption rights or restrictive covenants, or debts over the property.

STEP 3 – Signing a Full Purchase Contract

If you are happy with the search result, end of the reservation period you sign a full purchase contract and to pay a deposit (negotiable but normally around 10%).

The contract is particularly important because of the aforementioned investigation process conducted at the Army Headquarters. It must be established whether or not the property is in a Military Forbidden Zone (a process that, as said, may take a couple of months).

The buyer cannot hold the title until the Land Registry receives the clearance of the Security Investigation. This time lapse creates some degree of difficulty for the foreign purchasers on either method. Any payment made towards the purchase must therefore be recorded in a form of a contract.

The contract should ideally be drawn up in Turkish and English so that both sides understand its content. In addition, should there be any dispute, it would be dealt with in the Turkish court, and it is therefore important that the contract be drawn up in Turkish.

STEP 3- Military Permission Application

As stated above foreign nationals are subjected to have permission from Turkish Military Authority. It is common practice to make a 10 per cent deposit payment to hold the property and for the vendor to start the clearance process.

STEP 4 – Obtaining a Turkish Tax Number

In order to transferring Turkish title deed into your name, you must have a Turkish Tax Number.

STEP 6 – Completion

Upon notification of the granted military permission, we will arrange to transfer the title deed into your name. We prepare a power of attorney to give power to one of our associate lawyer to obtain the title deed for you. We will also do final searches at the land registry before transferring the title deed into your name.

STEP 7 – Insurance

Depending on the location, the buyer must take obligatory earthquake insurance provided by the government. In addition, the purchaser can arrange private insurance for fire and other natural disasters.

STEP 8 – Fees

Solicitors Fees

Our standard conveyancing fee is £250. This includes our associate lawyer fees in Turkey.

Notary Public fees:

The scale of the cost is fixed by law and generally ranges from £100 to £250.

Property registry fees:

A small amount is required to pay for the registration (about 50 per cent of the Notary Public fee) and compulsory earthquake insurance depending on the area. However, this amount will only be known once the value at the Land Registry is discovered.

The buyer and seller must each pay a three percent agents’ commission, which is the standard commission expected by all Turkish estate agents.

STEP 9 – Taxes

There is no restriction in terms of repatriation of sale proceeds or income from the property. As part of the purchasing process, the new owner is allocated a tax number from the Turkish tax authorities.

There are other taxes are not part of the initial purchase but will affect the budget. These include homeowner’s tax, income tax charged on rental income and inheritance tax. As the UK and Turkey have a bilateral agreement regarding taxation, it is not necessary for UK citizens to be taxed on assets in Turkey twice.

The following are the main taxes and fees that will affect the purchase:

Transfer tax:

Once the sale is complete, there is a transfer tax of three per cent. The tax is based on the declared value of the property. Usually, declared value is far lower than the actual sales price. Depending on the agreement, either buyer or seller can pay the amount, but the practice is that both parties share it.

Property ownership tax:

Annual property tax is approximately 0.3 per cent of the registered value of the property. This tax is paid in two instalments.

Income tax:

There is a 22-23 per cent income tax if an income is received from the property

VAT:

Property sales are not subject to any VAT.