Did you know that 57% of foreigners have a problem with purchasing and rental property? That’s a lot of lost revenue. But with Byblish Office, all difficult problems solved. Let us do for you, Relax.
Expenses When Buying Property in Turkey
Unlike other countries, expenses when buying a property in Turkey are low, and foreigners will be pleasantly surprised at how much money they can keep in their pocket. As always though, it is wise to know before you start the process of the additional expenses that will arise from legal procedures, as well as tax and service fees.
The Cost of Buying Property in Turkey.
Appraisal Report Fee
An appraisal report showing the value of the property is obligatory before the title deed transfer in sales is done to foreigners. The cost of the SPK validated appraisal report is approximately 2.000 TL depending on the city and features of the property. Buyers pay this fee directly to the SPK validated expert. Completion of the valuation report lasts 2 – 3 days. (Read more about the Appraisal report here)
Title Deed (Tapu) Transfer Fees
The General Directorate of Land Registry and Cadastre carries out the conveyance procedure. Both the buyer and seller must be present unless either side has given Power of Attorney for the final signature.
4% of the declared value of the property must be paid to the title deed office, as conveyance tax. Buyer pays Title Deed Conveyance tax as customs. There are several costs and taxes roughly 3.500 Turkish Lira which are;
• Passport translation at Notary (300 TL for each person additionally)
• Address document translation at Notary for opening a bank account
• Sworn translator
• Power of attorney (optional)
• Obtaining a tax number
• Cadastre Tax (Tapu Kadastro Harcı)
Additionally, the Land Registry and Cadastre Directorate also charge one-time processing fees, Circulating Capital (Döner Sermaye Harcı) of approximately 400 TL – 1.300 TL.
Property Tax (Emlak Vergisi)
Property Tax is paid every year and is 0.2% in metropolitan municipalities and 0.1% in non-metropolitan areas. The tax rate of commercial properties is 0.4% in urban districts and 0.2% in non-metropolitan areas.
The tax is used by the government to fund water and sewer improvements, provide law enforcement and fire service and other items deemed necessary.
Property and Earthquake Insurance
Earthquake insurance (DASK) is compulsory in Turkey and is calculated on a square meterage basis. Risks that may arise from fire, explosion, tsunami, or landslide during and after an earthquake are under Mandatory Earthquake Insurance. The fee varies between 150 TL to 250 TL (depends on m²).
Property insurance provides protection against most risks to property, such as fire, theft, and some weather damages. This includes specialized forms of insurance such as fire insurance, flood insurance, earthquake insurance, home insurance, or boiler insurance. Property insurance provides financial reimbursement to the owner of the structure in such cases.
Getting Connected: Electricity and Water
The electricity and water abonnement fees in Antalya vary from district to district.
Electricity abonnement fees;
If you get the first-time abonnement, you pay between 100 TL and 500 TL in total for the abonnement registry, electricity meter, and additional deposit fees. The transfer fee is as much as the deposit amount and additional DASK amount if DASK has expired.
Water abonnement fees;
If you get the first-time abonnement, you have to pay 775 TL in total for the abonnement registry fee and additional deposit fee. The transfer fee is as much as the deposit amount and additional DASK amount if DASK has expired.
Telephone and Internet
If you have a residency permit, you can get a telephone and internet connection. Turk telecom and TTNET are countrywide, and they hold a majority of the market.
For new subscribers, special packages are available, if you sign a two-year contract. Examples include telephone calls, broadband internet, and TV satellite packages for 130 Turkish Lira a month. All companies will charge an installation fee.
Maintenance Fee (Aidat in Turkish)
Anyone buying an apartment in communal buildings will also need to pay a monthly maintenance fee (Aidat) that goes towards communal facilities such as stairwell electricity, swimming pools, garden maintenance, or security. Read more in an article about maintenance fees in Turkey.
Property Purchasing in Turkey.
The property buying process in Turkey may seem daunting and like negotiating a minefield for foreign investors, however, rest assured. Because the Byblish Office team has your back. As well as helping and supporting our customers at every stage of the buying process, we offer a comprehensive after-sales service to help you settle in and keep your new home in tip-top condition. When you choose to invest in Turkish real estate with Byblish Office, the process will be smooth and easy.
Key Stages of The Property Buying Process in Turkey.
1 Wish List
The most important step is preparing your wish list. You just need to answer these basic questions: What is your purpose, a holiday house, investment or long-term living; which region do you prefer, what are the features that your property must have like how many bedrooms and so on.
We have the best properties in Turkey. So, to make the perfect match, we need to understand correctly your wish list.
For that you can be ready for the next step, which is Viewing Tour, our Agent will keep sending you some offers to fine-tune your wish list.
2 Viewing Tour
To come to Turkey and feel the living atmosphere, you can start organizing your trip.
For the Viewing Tour, our Agent, speaking your language, will pick you up from your hotel for a brief presentation in our office. We will listen to you carefully and answer all your questions. According to your wish list, we will show you the perfect matching 3 or 4 properties.
On the other hand, you don’t need to wait to come! You can have an online viewing tour also, thanks to TeleProperty service.
With TeleProperty you will have a chance to visit the properties on the comfort of your house, being able to ask any question even directly to the owner.
3 Deposit and Sales Agreement
Once you have chosen the property you want to buy; we negotiate with the seller for the final price and sales terms and we make the payment plan clear.
At this stage, to reserve the property and to fix the price, a deposit should be paid which is usually around 5.000 USD/EUR.
We work directly with the Buyer and Seller, without an intermediary. Thus, we make sure every detail is negotiated and agreed before signing the contract.
We make sure that you to purchase:
• The exact property which is shown to you
• From the actual seller
• Without any debt
• Under the agreed conditions
We prepare the official Sales Agreement, in your preferred language, for all the details. By signing the agreement, the buyer should make a downpayment within a period of 1 to 4 weeks from the deposit. This amount is usually from 30% to 50% of the sales price. You will be paying the rest of the amount at the time of the Title Deed conveyance.
4 Legal Procedures
For finalizing the purchase process, we need to complete some official procedures. First, you need to have a Turkish Tax Number, for which we will assist you. You only need to bring your passport to get your tax number.
We will also open a bank account for you so that you can make the payments for the purchase. You can use this account later on for all your utility subscription payment also. For opening a bank account, all you need is a copy of your passport, and a utility bill to prove your address in your residential country.
In Turkey, in property sales to foreigners, the appraisal report is necessary to guarantee the real value of the property. We are working with the trusted, government-approved partners for evaluation for a secure purchase.
For all this process, if you can’t or don’t want to come personally, you can also give a Power of Attorney to us, to our lawyer, or a legal representative of yours.
5 Signing the Title Deed and Moving in
Now, you are ready to get your Title Deed and to move into your dream home. You may come to get the Title Deed yourself or send us a Power of Attorney to get title deed on your behalf.
At this stage, the final payment must be made, and all taxes and state duties are paid. Congratulations! You are the proud owner of a property in Turkey.
We will still be with you once the purchase is done for the after-sale services.
Real Estate Funds in Turkey.
What is a Real Estate Investment Fund?
The Principles Regarding Real Estate Investment Funds published in the Official Gazette No. 28871 dated 03.01.2014. Such funds, which are frequently seen abroad, and established mostly for corporate domestic and global investors, are capital market institutions that allow securitization of real estate, bring liquidity to large-scale real estate, and gather investors with property owners.
Real Estate Investment Fund is an investment instrument that brings together individual savings and collectively evaluates these savings in real estate investments by professional managers.
Real Estate Investment Funds can invest in property, and rights basing on property. For that purpose, the fund can generate value increase and trade gain, and/or rental income. The fund earnings can be distributed to investors in two ways. The first gain, named appreciation gain, is realized when the participation shares returned to the founder or transferred to a 3rd party or the time of liquidation. The second gain, named dividend gain, is paid to the shareholders in cash in period(s) suitable to the fund’s investment strategy.
Why Choose Real Estate Funds?
Secured Instrument – Government Guarantee.
Portfolio Management Companies or Real Estate Portfolio Management Companies can establish a Real Estate Fund under the audit and supervision of the Capital Markets Board in accordance with legal permissions and limitations. That makes Real Investment Funds as a reliable and transparent investment instrument. All Real Estate Investment Fund participation shares owned by the investors are kept by the Custodian Institution licensed by the Capital Markets Board and registered by Central Security Depository where the assets like stocks, treasury bills, government bonds, etc. are also registered.
Property purchase and sale transactions that will be made on behalf of the fund take place under the custodian’s supervision. Since the fund asset is separate from the founder and custodian assets, in case of the founder or custodian’s bankruptcy the fund asset is fully protected. Even if the founder or custodian’s management and audit are transferred to the government, the fund asset cannot be seized, restricted, or be subject to bankruptcy.
Real Estate Investment Funds can only invest in completed and/or issued occupancy permits for immovable properties. Only the projects carried out by the Housing Development Administration (TOKİ), Emlak Konut, Municipalities, and companies with their subsidiaries, affiliates, and/or companies that have the privilege to nominate the board of directors are exceptions. And also Real Estate Investment Funds can not participate in property development and/or operating activities.
The compliance of fund activities with the Bylaw and Issuance Certificate is constantly monitored by the Capital Markets Board.
Since all transactions of the fund are subjected to governmental control and inspection, all developments and amendments regarding the fund must be shared with the investors via the website of Public Disclosure Platforms like investment companies, publicly held companies, and other securities. In this way, the investor always has a chance to check the current situation of the fund that he purchased its participation shares.
It is not legally possible for the investor’s assets to be held by the Portfolio Management Companies or in their accounts. The custody duty is carried out by a Custodian Institution (Bank) authorized by the Capital Markets Board. All trading transactions and expenditures made by the Fund are subject to the approval of the Custodian Institution (Bank).
Real Estate Investment Fund’s participation shares owned by the investor are kept by the Custodian institution licensed by the Capital Markets Board and are registered by the Central Securities Depository (CSD) -where the assets like stocks, treasury bills, government bonds, etc. are also registered. Investors can track every transaction they perform on the fund through the Central Securities Depository’s website and applications.
The Transaction with Real Value
The value of the property which will be included in the fund’s portfolio is determined by the property appraisal companies which are licensed by Capital Market Board. The appraised value is confirmed both by the founder and the custodian institution.
Real Estate Investment Funds offer significant tax advantages. First of all, the fund is exempt from the corporate tax. This exemption provides that the funds do not pay tax from the trading and or rental gain.
Additionally, the foreign corporate fund investors are not taxed while the foreign individual fund investors are taxed with a 10% withholding tax.
As can be easily understood from the above explanation, even tax advantages alone are sufficient to reveal the privileges of real estate investment funds. Learn more about Taxation in Turkey.
Since the Real Estate Investment Funds act in accordance with an investment strategy that is well-defined at the time of issuance, the expected returns do not tend to fluctuate. The professional fund and portfolio management teams always control the compliance with the investment strategy. The explained control mechanism ensures to maximize expected return.
Due to its strong capital structure, Real Estate Investment Funds always have a higher bargaining power once you compare to individual investors. The said bargaining power causes that the transactions generally concluded with a lower price than the particular purchases. When the process which starts with a lower purchasing price is combined with the fund’s investment strategy, professional management, and other control mechanisms fund performance results in an extraordinary capital returns.
Legally, Real Estate Investment Funds can pay periodic dividends to its investors. The frequency, amount, and other features of dividend payments are defined in the investor’s presentation of the fund. The investment committee of the fund can change the features of the dividend payments. To maximize the return on investment, the potential investors should select a fund that periodically makes dividend payments.
Liquidity – Exit Strategy
Real estate Investment Funds create a liquid asset from an investment on an immovable. The investor may exit the fund by returning his participation shares to the founder during the exit periods specified in the issuance document. However, it is always possible for an investor to exit from the fund by transferring their share to a third party.
Professional Management & Operational Easiness
Real Estate Investment Funds can be established by Portfolio Management Companies or Real Estate Portfolio Management Companies that have obtained an operating license from the Capital Markets Board. Every fund has an Investment Committee. All decisions -like purchase, sale, lease- are made upon the approval of the Investment Committee who are sector professionals. Via this method the investor delegates such an onerous selection responsibility to the fund managers.
Additionally, all property management activities of the property in the fund portfolio such as maintenance, rent collection, declaration, taxation, legal consultancy, etc. are managed by the fund manager.
Helal Income – Shariah Compliance
Real estate Investment Funds can; buy, sell, rent, lease, and promise to buy or sell any immovable such as field, land, residential unit, office, shopping mall, hotel, logistics center, warehouse, park, hospital, etc. As a rule, a minimum of 80% of fund investments is required to be in property assets. The usage method of this 80% and the rest 20% defines if the fund is shariah-compliant or not. The potential fund investor should select an interest-free shariah-compliant fund to obtain helal income.
The conditions of the exceptional acquisition of Turkish Citizenship have been announced in the Regulation for Implementation of Turkish Citizenship Law No.5901. According to the change made in the Regulation for the Implementation Turkish of Citizenship Law on 19.09.2018 foreigners who purchase 500.000 USD or equivalent foreign currency or equal Turkish Lira Real Estate Investment Fund and keep it for at least three years will be able to acquire Turkish citizenship exceptionally. The “Certificate of Conformity”, which indicates that the minimum investment requirement is met, is issued by the Capital Markets Board. Read more about Turkish Citizenship By Fund Investment.
Frequently Asked Questions
When looking to buy property in Turkey, you will no doubt have some questions to consider. We will be more than happy to discuss the purchasing process with you either on the phone or in-person but to help you get started we have shown some of the most frequently asked questions (FAQ)
The construction companies that we work to set the prices of new homes, so we do not charge a commission on this type of real estate purchase. We charge a 0% commission on resale properties. Purchase Expenses page contains information about other expenses associated with the property buying process in Turkey.
For resale properties, the buyer and seller agree on the handover date. It usually coincides with the full payment and signing of the title deed. If you buy a brand-new apartment from a construction company, in most cases, the developers let buyers move in when 70% of the price has been paid.
We will also help you to get electricity and water registered, and at this point, advises you on the easiest and best ways to pay household bills.
Initially, to buy a property, you need a passport and local tax number, which we will help you to obtain. You will also need the tax number as well as a utility bill from your home in the country you are living in, to open a Turkish bank account. Lastly, two photos measuring 3cm by 4cm are needed.
Contact the Byblish office, if you have more questions about the property buying process in Turkey. Otherwise, contact us today to speak with a sales representative, via email, telephone, or by dropping into one of our local offices.
Yes, foreign property buyers can get mortgages in Turkey. We have completed this process with %100 success for foreigners since we established our company.
It depends on the interest rates of the buyer’s home country. If your residential country provides mortgages with lower interest rates, you can prefer getting the mortgage in your country for an overseas property purchase. You can also consider buying properties with an installment from construction companies.
After paying the reservation fee, Byblish will carry out the title deed checks. A contract will be drawn up between the seller and the purchaser. This will give the details of the completion date, payment schedule, and terms & conditions. When this is signed by all parties, the deposit is paid and the application is made to Tapu and Land Registry Office. After the application, you can get the title deed within 2-3 working days. You can sign a power of attorney to conclude all the necessary paperwork if your circumstances require it.
Property insurance is made regarding the features of the property. Insurance companies will present their offers when you give them the necessary information about your home. They will complete the insurance purchase after your confirmation of the price. Property insurance is one of our aftersales services. Learn detailed information about property insurance in Turkey.
If you have owned the property for five years or more, you are exempt from property profit tax. You are supposed to ensure that all bills are paid up to date.
Yes, Turkey offers good investment chances with a high return on investment. Byblish follows this process for its customers as a free after-sales service.