More information on buying a property for sale in Turkey

Citizens of all EU countries are entitled to buy property in Turkey.  The buying process takes 8-12 weeks and a 10% deposit is required to secure the purchase.  The balance is payable upon completion as normal.  It is easy to transfer money to a Turkish bank account from the UK.  If you are buying the property from an existing UK resident, the money will usually be transferred straight to a UK bank account.  The transaction will normally be carried out in sterling or euros, so exchange rates are not a concern.

Turkish mortgages are not available to UK citizens.  Any funds would need to be raised against UK property or investments.

Following the completed sale procedure you will receive the Tapu.  It is this process that takes up to 12 weeks.  The sale procedure includes:

• The sale agreement.

• All background searches done on the property/land

• Military check, this is a search to confirm the property is not within a military zone or national forestry land.

Unless you instruct a Power of Attorney to act on your behalf, you will need to be present in Turkey to conduct some of the procedure.  It is quite common for UK citizens to appoint a Power of Attorney, which involves giving another person the legal authority to act on your behalf throughout the buying/selling process. It is arranged through the Notary office, where you will go along with the person you are giving the Power of Attorney to. You must also have an official translator, appointed by the Notary office.  The only document required for this is your passport.

If you decide to sell your property at a later date, there are no restrictions on taking the money out of Turkey.  However, depending on the length of time that you have owned the property there might be a capital gains tax liability. 

Expenses

• Land Registry Tax – This is payable to the Tapu (title deeds office) and is currently 3%, 1.5% is paid by the seller and 1.5% by the buyer.
  Stamp Tax – This is a nominal payment whereby tax is levied as a percentage of the value of the document, issued by the Notary office/land registry office.

• Compulsory Insurance – you are required by law to have earthquake insurance.

• Legal Fees – You are not obliged to use a solicitor but you are advised to do so.  Alternatively, the agent can draw up the contract.  If you use an agent to act on your behalf as a Power of Attorney this will incur Notary and translation fees.

• Utilities (Water/Electricity/council tax) – You must register these services in your name which will incur a small fee.

• Agents Fees - 3% of the purchase price of the property. Power of Attorney can be granted to the agent, who can then complete everything on your behalf.

Taxation

Property may be subject to tax from rental income, or capital gains tax. Firstly, if you rent your property, you are liable for personal income tax.  Secondly, if you sell your property you might be subject to capital gains tax, depending on the length of ownership. Foreign owners and Turkish citizens are treated no differently in terms of taxes or levies to be charged.

Foreign owners who rent their property in Turkey have to pay tax on any rent incurred.  Some countries have a double taxation agreement between the owner’s country of residence and Turkey, and any tax paid in Turkey can be offset against the tax burden in the owner’s own country.  Turkey has an Agreement with 61 countries (including the UK) for the avoidance of double taxation.  You might still need to pay a small amount of tax in the UK but the tax contribution made in Turkey can be offset against this.

For more detailed tax information, click to visit the Turkish Embassy website or click to visit the HM Revenue website.

Bank Accounts
Opening a bank account in Turkey is easy and straight forward. Accounts can be opened in either single or joint names. To open an account you need a tax number from the local tax office, which only takes a few minutes.  The bank will often apply for the tax number on your behalf. Alternatively, you may wish to assign Power of Attorney to someone in Turkey to open the account and carry out transactions on your behalf. 

Property Management

Most property in Turkey is managed by companies or individuals resident in the area.  They will generally undertake bill payments and small financial transactions as part of the management contract.  It is therefore not necessary to be concerned with utilities bills, as this should be dealt with on your behalf.  A standard property management contract should cover administration of bill payments, organisation of insurance and property & land maintenance.

For more general information about buying in Turkey, please visit the Turkish Embassy website, where this and more information can be viewed in full.

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