Vision Group Recommended Buying Process

First of all you need to find a property that you are interested to buy. For international buyers, buying a holiday home in Turkey is a lifestyle choice and most tend to look at the country’s coastal areas on the Aegean or Mediterranean Seas. Most people tend to buy a relatively modern property in Turkey and the quality of new-build homes has improved drastically in the past decades. Brand new apartments and villas are available with a more contemporary open plan style, some with beautiful outdoor areas and swimming pools. Vision Group can offer you a choice of properties in some of the most popular areas for international buyers.

• Once you have found your dream holiday home in Turkey, Vision Group will assist you with drawing up a contract between you and the vendor detailing the agreed terms and conditions of the purchase. This will include the amount of your holding deposit, a date agreed where you will pay a full deposit and the final balance cost of the property. A legal translator appointed by government notary offices will be present for the duration of the process so that you fully understand everything.
• The legal translator then takes the buyer's passport to the Notary for translation which is necessary for security and property location checks. The translation takes a maximum of half an hour, after which the passport will be returned to the buyer.
• Local property consultants from Vision Group together with the buyer will then take the contract to a local solicitor. Your solicitor is responsible for overseeing the applications for the TAPU (title deeds) and the Iskan (habitation licence) as well as dealing with contracts. The Iskan is a technical passport for your real estate which holds information about your property such as the number of floors and indoor infrastructure. The TAPU is an official document that shows property ownership. This document will include the owner’s photo and an official stamp and signature. It is vital that a TAPU is checked for authenticity by making sure that the name on the TAPU matches the sellers. Your solicitor will check all of this for you as well as making sure that the TAPU does not come with any debts and matches the property in question.
• All parties will then sign the contracts, witnessed by the solicitor, the legal translator, and another witness.
• On completion of the contract, you will be required to leave a holding deposit to secure the property (minimum holding deposit is normally £1,000 GBP or equivalent). A date will be set for you to pay a full deposit which is usually 1-2% of the purchase value of the property.
• Here is the latest news as of August 2018. No more military application process required on foreign purchases in 16 provinces of Turkey from Fethiye, Bodrum to Antalya. Once all other paperwork is in place, you will pay the remaining balance on your property and your solicitor will sign over the deeds of the property.
• In order to acquire the title of a property, an application has to be submitted to the local Land Registry Office in which the property is situated. After carrying out necessary searches and checks for the above-mentioned requirements, the transfer of the title is done by the Land Registry Office. In Turkey, it is legally compulsory for both sides (the seller and the buyer) to be present at the entry in the property register during the transaction, the proofs or the documents concerning the transfer of the full purchase price to the country must be presented to the Land Registry Office.
• It is at the point of deed transfer that all taxes and charges will be paid. You will need to pay the purchase tax (stamp duty) which amounts to 3% of the assessed value of your property. The assessed value is normally around 60% of the purchase price, so your purchase tax will be 3% of 60% of the value of your property. This tax goes to the local municipality (council).
• As a new property owner, once the purchase process is complete, you will receive your TAPU (title deed). You will need to register with the local tax office and open a Turkish bank account which is compulsory in order to register a property in Turkey. In order to open a Turkish Bank account as well as your original copy of your passport, you will also need to provide another form of identification with your home address in the country you are residing. This could be in the form of a driving licence, any utility bill (electricity, water, gas, etc) or council tax bill. Once the bank account is opened, you will be given a dedicated tax number and you must register the fact that you now own the property with the local municipality.

In summary when purchasing a property in Turkey, please be advised of the procedures that need to be followed:

• Deciding on the property to buy;
• Preparing the title deed (TAPU) of the property;
• Obtaining tax number from State Tax Office;
• Opening a bank account;
• Applying to the Land Registry Office;
• Registering the title deed (TAPU) into the buyer’s name(s).

The title deed (TAPU) is the only document that certifies the ownership of a property and is prepared by the Land Registry Office in each town/municipality. TAPU is registered in all the official books and state computer system. In case the TAPU is lost, it can be renewed at the Land Registry Offices at a cost of €10 EUR.

Unlike any other country, when a purchaser buys an apartment in Turkey, they also own a part of land according to the size of the apartment.

TAXES PAYABLE AT THE TIME OF TAPU TRANSACTION

A number of construction companies include sales tax in their sales price. However, according to the regulations in Turkey, both buyer and seller each pay 4% of the sales price as tax.

CONNECTION FEES, TAX AND INSURANCE

Once you have the keys to your new holiday home, you will need to pay one off connection fees for utilities such as electric, gas and water. You will also be required to purchase earthquake insurance. Turkey does experience earthquakes and this insurance is mainly for peace of mind. All new-build properties come with an earthquake warranty certificate by developers, but if you are buying a slightly older property, Vision Group recommends that you ask for one of these certificates.

ANNUAL PROPERTY TAX

Every year a property tax (the equivalent of council tax) must be paid to the local authorities. The volume of the tax is calculated according to the price registered on the title deed (tapu). However, local authorities have the right to change the value of the property based on any new regulations passed by the government which means such value changes may vary in accordance with the inflation rates in Turkey.

The property tax rates are as follows:

Apartment - 0.2% of the value

Shop and Office - 0.4% of the value

Lands - 0.2% - 0.6% of the value (depending on the location)

The above costs can vary slightly depending on your municipality and in the big cities these figures may be double. All properties are subject to revaluation every year for tax purposes. If you are buying off-plan, as the buyer you must complete an affidavit and submit this to the municipality for tax purposes within 3 months of completed construction.

Your acquired property may be resold or rented out and the proceeds may be transferred out of Turkey.

CAPITAL GAINS TAX:

In Turkey if a property is sold within 5 years of ownership, the vendor does not have to pay any tax on their capital gain. In case the property is sold after 5 years of ownership, the vendor is obliged to pay tax on the capital gain starting from 9,400 TL.

The percentages of the tax on the sold after 5 years property are calculated as follows:

0,000 TL - 10,000 TL - 15%
10,001 TL - 25,000 TL - 20%
25,001 TL - 58,000 TL - 27%
58,001 TL - above - 35%

In case of death of the owner, all the rights of the property go to the legal heir. For this purpose application is made to the Land Registry Office together with the death certificate, where a new certificate will be approved by a notary or court.

TOTAL COSTS OF BUYING A PROPERTY IN TURKEY

The following illustrates the one-off costs of purchasing property in Turkey. The figures noted here are representative of a property sale of £100,000. All figures are quoted in GBP.

The total purchase cost of your property amounts to approximately 5.5% of the cost of your new property. However, due to the fact that the purchase tax is generally paid on an assessed value equivalent to 60% of the contract price, the eventual costs are around 5%.

Off-Plan Properties

Of the costs above, purchase tax, gas, electricity connection, and military application fees are payable upon completion of your property. This means for off-plan purchases, upfront costs are only about GBP 4,000 (4% of your property value) and the remaining is due after the completion of your property, which could be 12 months away. For new-build and resale properties, all costs generally are due within 2-3 months of the contract.

While the process may seem complicated at a first glance, Vision Group will always be more than happy to guide you through the process with the best advice possible.