Guide to Property in Turkey

The climate in Turkey is second to none with around 300 days of unadulterated sunshine every year. Turkey boasts hundreds of miles of stunning coastline and beaches. The Aegean and Turquoise coasts have all the ideal ingredients for a perfect Mediterranean destination. Property in Turkey generally offers superb value for money, excellent investment growth potential and a relaxed way of life with a comparatively low cost of living.

Propertyshowrooms.com and Property in Turkey

We are pleased to offer you property for sale in a rich and varied range of locations in Turkey. From the eclectic culture in the capital city of Istanbul, to the seaside resorts of Ankara, Bodrum and Marmaris, Turkey has a place to suit all tastes. Many people who have visited Turkey on several occasions for past holidays are now seeing the potential in purchasing a second or holiday home, while prices remain low, but steadily on the increase.

The simplicity of the buying process in Turkey comes as a pleasant surprise for many purchasers, increasing the country´s attraction as an investment location. In addition, the country is very easily accessed internationally through many airlines, so that tourists can travel to Turkey very easily and for budget prices.

EU membership in 2007 can only serve to increase the great potential this exotic Mediterranean location can offer to foreign investors. In the last 2 years property values on the southern coast of Turkey have increased by between 28 and 50% and, as a medium to long term investment, we believe Turkish property is a very profitable option.

Can Foreign Nationals Own Property in Turkey?

Turkey works on a reciprocal agreement and if Turkish citizens are permitted to buy a property in their country, citizens from that country are allowed to buy in Turkey. With Turkey set to join the EU in 2007 this has opened its doors to allow citizens from many different countries to buy a property in Turkey in line with EU law.

Foreigners are allowed to buy property or land in their own names in towns but not in villages or rural areas.

Why Should I Choose Turkey?

Turkey is a highly sought after holiday destination and this factor is a strong contributing factor to the property investment success the country is currently undergoing. 25 million tourist flock to its coastal resorts each year (up from 14 million in 2004) and this, combined with an excellent sunny climate, indicates the success that Turkey is today.

Turkey’s current status as a strong candidate for EU membership has added to the overwhelming international interest in property iin Turkey. Returns on property investment are high and last year alone, property prices rose by around 50% in some areas. An increase in demand is set to drastically push prices upwards and create an environment that is ripe for buy-to-let investments.

The stunning natural beauty, warm climate and vibrant culture in Turkey continue to attract tourists and retirees each year.

Turkey’s appeal also lies in comparatively low cost of living and stable economic situation, further enticing visitors to the country. The government has tax incentives in place which favour property transactions, such as exemption from annual property tax in for the first five years of ownership, no capital gains tax for individuals who have owned a property for more than one year and easy repatriation of funds.

What is the Economic and Political Situation?

Turkey is a dynamic and emerging market equipped with a well-developed infrastructure and a globally competitive work forces. Turkey is also home to a thriving tourist industry and rapidly growing property market, attracting huge international interest.

The Turkish property market currently offers excellent quality and value for money. This, combined with the outstanding expected growth (25-40% per annum), offers property investors a unique opportunity.

Turkey is currently at the very start of the long road to possible EU inclusion. There are many factors yet to be discussed and Turkey issues to be corrected before inclusion will be seriously considered. When Turkey does get accepted into the EU, it can expect the price of property to rise substantially and tourism to improve even further. Many investors are purchasing in Turkey with EU inclusion as a major driving force for this investment, while they look to take advantage of the current low property prices and a growing rental market.

Turkish economy is very strong with 5.6% GDP growth in 2005 and Turkey now has the 22nd largest economy in the world.

Turkey’s system of government is democratic and it is a full member of NATO. The president, currently running the Justice & Development Party (AK), has broad powers of appointment and supervision, and is chosen by Parliament using proportional representation for a term of 7 years.

The stringent entry conditions imposed by the EU require human rights to play an instrumental role in the progress of a struggle between Turkey's policy makers. This will ensure a fully democratic system, in line with European standards, which is already well developed in such areas as allowing women a political vote and an allowance for complete freedom to worship any religious faith.

How do we Travel to Turkey?

In line with the boom in tourism, low cost airlines such as Turkish Airlines are already planning new routes, lower fares and increased services to cater for the increased numbers of visitors. As accessibility increases, Turkish property will become even more sought after and investors will inevitably see encouraging capital appreciation.

The main points of entry for investors in Turkey are Bodrum, Dalaman or Antalya, with bookings from Turkish Airlines, British Airways, Thomas Cook and Excel.

In winter, daily flights to Bodrum are available from Heathrow with transfer in Istanbul to Bodrum. However in summer, you can fly to Bodrum direct from most UK airports.

What is the Direct Flying Time from UK to Turkey?

Flight time is only approximately 3 ½ hours from the UK.

Is a Visa Required to Enter Turkey?

Entering Turkey is simple and visitors from many EU countries and New Zealand are free to enter Turkey without the need for a visa.

However citizens of the following countries need to purchase a visa, which is a sticker obtained at the point of entry into Turkey and is valid for 3 months:

Country	Cost
UK	GBP 10
US	USD 26
Canada	Free
Australia	Free
Ireland	Free
The Netherlands	10 Euros

You are well advised to apply to the Turkish Government Office for a Residents Visa if you are relocating to Turkey for more than 6 months. The document they issue will need to be taken to the police station for processing.

Property Buying Process in Turkey

Many people buying property in Turkey are buying for investment, some looking for a holiday home with the aim of also making a little money and others as a dedicated investment that they may never even visit. It is essential that potential buyers of property in Turkey understand the procedures as it is a new country with regard to overseas property investment.

Buying property in an emerging market such as Turkey is very different from buying in a more traditional market like Spain, where millions of buyers already own homes from all corners of the world. In Spain the procedures are tried and tested and every notary is well experienced. However, in Turkey this is not the case and the lack of experience and firm procedures may lead to delays and confusion.

Purchase Through a Reputable Agent

In Turkey there are some potential pitfalls as many properties do not have titles or planning permission or have simply been constructed illegally. In 2004 the Turkish Daily News reported 600,000 illegal homes in Istanbul alone. There are also various types of "title" available in Turkey giving different land ownership rights. For this reason and the fact that Turkey is new to the overseas property scene, it is extremely important to use a quality agent that can guide you through all the potential problems.

Purchase Procedure

Once you have found your ideal property in Turkey and have decided that you would like to purchase you can usually expect to follow the procedure below:

Reservation Contract

The reservation contract takes the property off the market, usually for between 2-4 weeks, allowing time for the appointed legal advisor to carry out the required searches on the property in question. Usually a reservation fee of between €3,000 and €6,000 is paid at this point.

If you do not continue with the purchase due to a legal problem then you should contractually be entitled to a refund of the paid reservation fee, although this is not always the case. However, if you decide not to proceed owing to a change of heart or mind then it is standard that you will lose the reservation fee.

If you decide to proceed with the purchase then the reservation fee already paid is treated as part of the payment towards the property in question.

Preliminary Contract

After the reservation contract is signed and the required fee is paid, you are presented with a report containing the findings of the legal checks. Subject to the report, you then sign the preliminary contract and at this stage you will be expected to pay the required deposit. On a resale property, this is typically 10% and on an off-plan (new) property you must expect to pay varying amounts of around 30%.

If necessary, at this point in the process the vendor is required to apply for permission for you to purchase a property in Turkey.

With off-plan property purchases in Turkey the buyer may be expected to pay a number of stage payments throughout the construction process.

Completion

Once all parties are ready to proceed the property sale is completed. The buyer pays the required tax payments and the final contract or deed of sale (Tapu) is signed. The signing of this document means that the land ownership is transferred to the buyer. This is usually done at the land registry office.

Once signed, the deed of sale (Tapu) is registered in the land registry.

Off-Plan Security For Buyers

In Spain and most other countries where full or part payment is made before the property is fully constructed, a bank guarantee must be in place to ensure that should the developer go bankrupt before completion of your property, your money is 100% safe.

In Turkey this is not a requirement and owing to the early stage of the overseas property market in Turkey and the comparatively immature banking systems such guarantees are either impossible or very expensive.

This makes it extra important to work with developers with proven track records and of substance that can offer quality property and run no risk of running out of capital during the construction phase of a project.

Mortgages in Turkey

The Turkish property market is becoming even more obtainable for foreign buyers with the imminent introduction of Turkish mortgage options. Until now, the absence of finance from Turkish banks has been a sticking point among many investors.

Deputy Prime Minister Abdullatif Sener has confirmed that a bill regulating mortgages of up to 30 years will be presented.

Property purchasers traditionally arrange funding in their country of residence.

However, there has been some recent movement on the Turkish mortgage front, making it possible in the very near future for Turkish residents to obtain mortgages. This is also expected to include non-residents.

Clients are deciding to take advantage of the excellent early opportunities available now in Turkey. Instead of a Turkish mortgage they may also consider the re-mortgaging of their existing property use of personal funds arrangement of a personal loan

Once the Turkish mortgage is implemented, it will doubtless enhance Turkey’s position on the property investment map. This, in turn, will further boost this flourishing tourist economy and inevitably drive property prices upward.

Banking in Turkey

Working your way through a financial system in a strange country can be a worrying time. Here we give you some information that will help you to understand the Turkish system.

All banks in Turkey are legally obliged to belong to the Banking Association of Turkey (Türkiye Bankalar Birligi ). Represented by the bank’s Chairman or General Manager, the main aim is to develop banking in Turkey and to ensure that banks comply with the regulations. One of the important duties of the Association, while under the watchful eye of the government authorities, is to represent and protect the interests of the banking sector.

The banking system and the Turkish financial system are closely intertwined. This is a consequence of the country's economic and historical development. Banks carry out almost all financial activities, both in the money and capital markets.

Foreign banks, in spite of their small market share, play an important part in the banking system because of the new products and practices they have initiated.

Turkish banks have begun to modernise and install new services and increase profitability and competitive strength through better control of operating costs.

Many Turkish banks have ATM's (automatic teller machines) enabling you to draw foreign currency while you stay in Turkey. Credit cards and debit cards are widely accepted in tourist areas. Exchange offices are widely available in tourist areas and are often open until midnight. Be warned, however, they can give poor rates and it is best to check before changing your money.

If you open a bank account in one of Turkey's banks, you are advised to compare commission rates for money transfer to and from Turkey. In most of the banks in Turkey you will find a few English speaking employees, the best chance is in the foreign exchange section of the bank.

List of Turkish ACB Member Banks

• Bulbank
• Biochim
• Central Cooperative Bank
• Economic & Investment Bank
• Demirbank
• Encouragement Bank
• Eurobank
• ING Bank
• First Investment Bank
• Roseximbank
• Expressbank
• Societe Generale
• Union Bank
• United Turkey Bank
• Bank DSK
• Procredit Bank
• Tokuda Bank Plc

Taxes in Turkey

Buyers Tax

Approximately 1.5% based on the declared price of the property.

Government Tax

Approximately €200

Community Tax

Approximately €16 paid yearly for local services.

Property Tax

Approximately 0,5% based on the declared value of property, paid yearly.

Buildings and land owned in Turkey are subject to real estate tax at the following rates:

• Residences 0.1%
• Other buildings 0.2%
• Land 0.1%
• Vacant land (but allocated for construction purposes) 0.3%
• Farming land 0%

Inheritance and Gift Tax

Property acquired as a gift or through inheritance is subject to taxes of between 1% and 30% of the valuation. Tax paid in another country on inherited property is deducted from the taxable value of the asset. Inheritance tax is payable over the period of three years and in two installments per year.

Environmental Tax

Environmental Tax contributes towards the financing of certain services such as rubbish disposal. This tax is levied in staged payments and is charged according to the location of the property.