Buying property in Turkey
For some years, Turkey’s real estate market has been attracting an increasing number of foreigners looking for property -- for investment, rental, holiday homes, retirement or simply starting a life here.
In the five-year period between 2003 and 2007 the total value of real estate purchases by foreigners was approximately $10 billion -- and the level of investment is still rising, according to recent figures.
Do you toy with the idea of buying property in Turkey? To prevent you from potential mistakes and obstacles that sometimes emerge during the process of purchasing property, this week Today’s Zaman provides you with some useful information for finding and purchasing the right property.
According to data from the Turkish Land Registry Directorate (TKM), people from 70 nationalities have purchased fixed properties - such as land and houses -- in Turkey. These people have primarily included citizens of Germany, the US, Austria, Azerbaijan, Belgium, Denmark, the Netherlands and France. Foreigners seem to prefer İstanbul and Antalya, as half of the real estate purchases by foreigners are in these two cities. These cities are followed by Bursa, İzmir, Muğla, Hatay, Aydın and Mersin.
Why Turkey?
There are many factors that make Turkey’s real estate market attractive for foreigners. Real Estate in Turkey, an Internet-based real estate listing for properties in Turkey, says on its Web site, www.realestateinturkey.com, “Every year property prices have been rising but prices for buying property in Turkey are still considerably lower than buying property for sale in other major tourist areas such as Spain and France, making Turkey an ideal overseas property investment.”
Other factors contributing to foreign interest in the Turkish real estate market are, according to the TKM’s report, increasing income levels and positive expectations for real estate prices. In addition, growing economic stability is expected to bring further useful investment to airports, roads, golf courses and marinas. Furthermore, you don’t even have to be that wealthy to invest in Turkish property.
“Turkey’s emerging mortgage market, in particular, is doing well,” says Professor Norbert Walter, chief economist for Deutsche Bank, a large German bank. Walter is an expert on the US subprime crisis, which has been shaking financial markets worldwide since 2007. But Walter also recommends taking macroeconomic factors into account: “Turkey is more fragile than other countries because of its high current account deficit. … Turkey will rely on external help, a move that may become expensive later on,” he says, explaining that this is the reason why investors need to know the “local conditions” of the real estate market very well.
Especially when you are buying property for investment rather than for personal use, your first step should be to check out things like location, quality and surroundings.
Then you have to discuss sale conditions with the owner. Therefore, you should also make sure that any property you purchase has been built properly and that all relevant licenses were obtained before construction. Make especially sure that the construction materials are appropriate and that they will not lead to problems like dampness or lack of ventilation. You should also have the house inspected for earthquake safety.
“Don’t buy from someone in a bar!”
In the online expatriate community www.mymerhaba.com, users discuss finding a reliable real estate agency. They all agree on one principle: “Don’t buy from someone you met in a bar.”
There are plenty of “emlak” Web sites aimed at international buyers offering properties on the Internet. “It’s just a matter of looking,” says one user on the mymerhaba.com forum. “Just make sure that it has all the right certificates,” adds another. Many users recommend talking to foreigners who have experience with buying property in Turkey. They also caution that you should make sure the property you are purchasing really belongs to the “owner.”
When you are purchasing a resale property -- which can be advantageous as such properties usually start at a cheaper price -- take into account that it will probably require you to spend a good sum of money to bring it up to a quality level you would be comfortable living in. With second-hand property, you should also be sure that the water, natural gas, phone and electricity bills of the previous owner have been paid and that there are no other debts connected with the house. New properties, of course, do not suffer from these problems, though their prices can be daunting. Sometimes simple things, like checking the amount of sunshine an apartment gets or meeting with your potential neighbors, will help your decision.
Then there is the question of how to go about starting the actual process of buying property. Which laws and regulations have to been taken into account? The relevant regulation for the acquisition of property by foreign real and legal persons, Article 35 of the Land Registry Law, can be checked on the TKM’s Web site at www.tkm.gov.tr.
It is not compulsory to hire a lawyer to handle the lengthy process of buying property in Turkey. You may plow your way through all the laws and regulations on your own. However, since there are many transactions involved in buying property and some steps are very important, it is strongly recommended that you seek legal and financial advice. Keep in mind also that some special regulations apply when property is purchased for business and investment purposes that are connected to tourism.
A long list of things to do
If you have already decided on a specific property, the next step is to check whether the building already has a tapu (land deed). If it does, make sure that it really belongs to the property you are aiming to buy. If not, you must register the property at the TKM. If you are buying an empty plot of land, make sure that you will be allowed to erect buildings there by the Local Development Plan -- which should be available at the municipality.
You should also keep in mind that there is an annual property tax for private buildings. All properties are subject to re-assessment every four years for taxation purposes, which means that you need official records from the land registry office or, when you are buying for a company, company registration records from the chamber of commerce. Be careful, especially with this step. There is a huge tax evasion problem in the real estate market due to the common strategy of declaring low prices on land deeds. For further information on this topic, see Berk Çektir’s legal column in Today’s Zaman. He has been addressing this issue and offering useful advice about land deeds this week.
If all this is arranged, the foreigner must still prove the transfer of the full purchase price into Turkey to the TKM. In any subsequent sale of the property, the profits can be transferred out of Turkey.
The most complicated step of all this seems to be applying for the tapu, according to discussions in the mymerhaba.com forum. “I have already paid the full amount for a flat in Alanya, but have not got the tapu even after waiting for four months,” worries one user, repeating what seems to be a common theme. But another user says, “When I bought my apartment in Istanbul, I was given the tapu on the same day that I paid for the property. I went to the titles office with the previous owner and he signed it over to me in front of a few officials who made sure that we both understood what we were doing.”
However, to avoid any rude surprises, make sure early on that the property was not built illegally and that the builders are not trying to register the land or building retrospectively. The process of applying for the tapu can take several months, but when you have taken all the necessary precautions, you can sit back and relax during that time, looking forward to your living in your new home.
