YOUR PROPERTY

Purchasing Process

Purchasing a property in Turkey is easier than in many European countries and our agents will assist you every step of the way.

According to Turkish law foreigners may acquire property in Turkey provided there is reciprocity between Turkey and the Buyer's country of origin and that the intended property does not lie within a military zone and is within the limits of a Municipality.

It is normal that a contract will be drawn up between the Buyer and Seller detailing the agreed terms and conditions of the purchase. A legal translator will be present at all stages to represent the Buyer. The legal translator then takes the buyer's passport(s) to the Notary for translation. This is for the security and property location checks. The translation takes a maximum of half an hour, after which the passport(s) will be returned to the Buyer.

Before purchasing a property you will need:

• Passport
• Turkish tax number
• Turkish bank account number (foreign currency account and/or Turkish lira account)
• Two recent passport size photos

If the Buyer chooses to use a solicitor the solicitor will check a copy of the Tapu (Title Deed) to ensure that the information on the contract corresponds with the information on the Tapu. All parties then sign the contract witnessed by the solicitor and legal translator and one other witness.

Once the application has been approved by the Land Registry office (2-3 months) our developers will hand over the Tapu to the Buyer provided all payments have been cleared.

The Tapu will be handed over once the final balance and the purchase tax have been paid. In Turkey it is legally compulsory for both sides, Buyer and Seller, to be present at the entry in the property register (this duty can be given to a Power of Attorney). During the transaction, the proofs of the documents concerning the transfer of the full purchase price into Turkey must be presented to the Land Registry office. A purchase tax of 3% is collected during the transaction, normally split between Buyer and Seller.

We would recommend the use of a solicitor to check there are no outstanding debts attached to the property, to make sure the property is not owned by more than one person and the address of the property matches that on the Title Deeds.

The acquired property may be resold or rented out and the proceeds may be transferred out of Turkey. No CGT is payable after 4 years of ownership.

Purchasing Costs

Please note: different regulations apply when a property is purchased for business related purposes.

* New properties are exempt from annual property tax for five years following their construction

Military Clearance

Military clearance is a formality for all foreigners wishing to purchase in Turkey. A copy of the Title Deed (original Tapu) of the property/land, along with a copy of your passport, tax identification are sent off by the Title Deed office for military clearance to ensure the property/land you wish to buy is not within a military zone. This can take 2-3 months. Once it is confirmed the property/land is outside a military zone, your application is automatically accepted.

Self Build

More people are opting to build their own property in Turkey either to maximise their profit, to choose their own location or to build to their own specification.

The easiest way to do this is to buy land with planning permission already granted. Our agents in Turkey can help you with all matters relating to self build from finding the land, architect, structural engineers, and builders to furnishing of your home.

Resales

Turkey's resale market is now becoming established. As tourism wealth is finding its way to the domestic market more Turkish buyers will be able to purchase more expensive properties. If you have purchased in the right location, a resale will more or less be guaranteed.

After an offer has been accepted, the buyer will usually sign a conditional preliminary contract and pay a deposit of up to 10% of the property's price. If the purchaser pulls out for any reason they forfeit their deposit. If the Vendor pulls out they are expected to compensate the buyer. For this reason the preliminary contract must be clearly laid out and legal advice is highly recommended. It is customary in Turkey that a payment of 3% is payable by the Buyer and the Seller to the Estate Agent

Off-Plan Purchases

New build properties are proving very popular because properties are better built, more spacious, modern and earthquake proof. The main reason for buying off-plan is that there are most often discounts available and the opportunity for short term growth. Buyers have been able to reserve property on off-plan developments in Turkey at around 30% below market value. This not only saves the investor a lot of money but also helps the developer to complete his project by providing funds at a crucial stage of the development. Generally, property prices go up by about 10% at each stage of construction, from 1) laying of the foundations 2) building the walls 3) internals and completion. This is why it is best to get into a development early, securing the best locations and maximising your capital growth.

Last but not least, pioneering investors have enjoyed substantial percentage gains from off-plan property investments. With ongoing negotiations for EU membership, improving transport and infrastructure, a maturing mortgage market, Turkey should continue to provide healthy growth in the next few years.

Insurance

A buyer must take obligatory earthquake insurance provided by the government (DASK). For example for a 100m2 property insurance currently costs £25.00. However, the payout should an earthquake occur is low, so it is advisable to take additional buildings insurance.

Warranty

All of our Developers in Turkey offer a 5 year Warranty on new homes to cover you against any major structural damage to your home.

After-Sales in Turkey

Our Agents all offer an after-care service in Turkey and, according to your purchase, one of our team will be with you when you chose the ceramics and interior wall colour's of your property, take you shopping and help with translations and the local currency, arrange delivery of your furniture if you cannot be there and help you open a bank account, giving you guidance and assistance on all aspects of owning a property in Turkey. After sales works closely with the Property Management team to ensure that you will have complete peace of mind knowing that your property is in safe hands.

Rentals in Turkey

Our Agents work in conjunction with an established rental company in the UK, and offer a rental scheme which gives a return on your investment.

You will be informed of each rental booking date and length of stay by e-mail or phone from the UK office, your property is checked before, during and after each rental, cleaning and laundry is taken care of and airport transfers arranged. Our rental team also works closely with the Property Management Department of your new property.

Whether you are buying for personal use or as an investment, it is reassuring to know there is a healthy rental market. Rising tourist numbers will ensure those buying to let and Turkey's long summer season will increase your yield potential, particularly if properties are well located and of a high quality.

A concerted effort by the Turkish tourist board means that more money is being spent on the promotion of Turkey's resorts and this, in turn with improving infrastructure, enlargement of airports, more and more tourists every year are flocking to Turkey's shores intensifying interest in second homes.

Property Global will also advertise your property from their own Rentals web-site (please connect to our Rentals Department for further information)

YOUR MONEY

Banking

In order to purchase a property in Turkey you will need to set up a bank account whilst in the country.  Our agents will be pleased to help with this.  At present interest on Turkish bank accounts is usually from 10-20% per annum depending on how much risk you wish to take with your money.   There are strict banking regulations which ensure the safety of your bank account and account details.  Internet banking services are available through some banks and you should request this on setting up your account.  It is always advisable to have your passport anytime you visit a Turkish bank as identification will be needed.

At present the average exchange rate for the Turkish lira is 2.6 YTL to £1 Sterling (Oct 2006).

Currency

High Street banks and Bureau de Change might be great for holiday money but not for larger payments.  Exchange rates can be uncompetitive and you will probably incur high transfer charges.

Property Global recommend the use of a Foreign Exchange company to help you maximise your transfer.  We recommend www.xchangebusiness.co.uk who will assist you in the transfer.  xchange Business offers corporate and individual clients a secure and efficient route to foreign currency exchange, simplifying hte process, minimising the risks and saving you money in your transactions.  Their knowledge and experience means they can bring you the best possible rates making all the necessary arrangements for your funds.  Their profit is made from the margin between the price they buy at and the price they sell at.  So they can guarantee there are no hidden charges and absolutely no transfer fees on amounts over £5000.

There is no limit to the mount of foreign currency that may be brought into Turkey.

Cost of living

Taxation

Turkey has a bilateral agreement to avoid dual taxation for UK citizens.   If you rent out your property you can earn additional income - the relevant income tax on your profit will be taxed in the country of your residency.   Foreign residents are generally subject to taxation on their worldwide income, thus foreign State and Private retirement pensions transferred to Turkey may be considered taxable income.  We advise using an accountant who can advise on individual circumstances.

Capital Gains

There is no CGT if you keep your property for 4 years. 

Property Taxes

All properties are subject to revaluation every year for tax purposes.  Tax payments are made in two installments from March-May and November of each year.  The rate for residential property is 0.1% - for land 0.3%.   

Mortgages

At present there are no mortgages available in Turkey.  However, it is possible to borrow up 80% on a 15 years loan on built properties.  A new mortgage law was expected some time this year and is currently before Parliament.  This means the best option for foreign buyers is either savings or by re-mortgaging an existing property. 

A number of economic reforms are likely to provide impetus for a mortgage market in Turkey.  Lower interest rates have created a borrowing boom in Turkey with banks seeing more credit card business.  It is hoped this change will drive further demand for mortgages and make them a mass market option for Turkish nationals.

Inflation has settled down in Turkey with consumer prices increasing at 7.72% which is below the 8% official target for 2005 and the lowest for the last 37 years.  The government economy taskforce recently announced its target for 5% inflation this year and 4% for 2007 and 2008 - all of which will improve confidence in its business community.

(PLEASE CALL OUR OFFICES TO CHECK THE LATEST NEWS ON MORTGAGES AS THIS CAN CHANGE ANY DAY)