Turkey

PERSONAL FINANCE ASSISTANCE

If you need assistance in raising finance in the UK we can assist in this matter. Please contact our office so that we might help in the best way possible, taking your personal circumstances into the greatest consideration.

PURCHASING PROPERTY

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 or within the limits of a village. The property must be within the limits of a Municipality.

Buying in Turkey is easier than in many European countries. However, 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.

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.

The Buyer will take the contract to a local 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 for the security and property location checks to be cleared) our developers will hand over the Tapu to the Buyer provided all payments have been cleared. It is at point of Tapu transfer that the purchase tax will be paid. In Turkey is is legally compulsory for both sides, Buyer and Seller, 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 into turkey must be presented to the Land Registry office. A purchase tax of 3% is collected from the purchase during the transaction.

An annual property tax is collected by the municipalities (i.e. local governments) at the rate of 0.3% for land and 0.1% for a house in most areas. In the big cities the figures are double. All properties are subject to revaluation every year for tax purposes. On newly built properties, within 3 months of construction finishing, the Buyer must complete an affidavit and submit it to the municipality for these tax purposes.

Foreign nationals cannot purchase more than 30 hectare properties in Turkey.

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

Further requirements before purchasing a property are:

Turkish tax number

Turkish bank account number (foreign currency account and/or Turkish lira account)

On finding your ideal property application must be made for military clearance. This is done by our Agents in Turkey.

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

A guide to costs involved

Solicitor's fees	£200-300
Translator's fees	£60-80
Notary fees	£100-120
Agency fee	3% of property price (not applicable when purchasing off-plan or new build via TaycasaVillas)
Buyer's tax	3% split between Buyer and Seller, therefore 1.5% of property price
Water and electricity connection fees (Power of Attorney will be necessary for our agents to arrange)	£200-350
Property tax*	0.3-0.6% of property price (paid yearly)
Government tax	£40-100/year
Earthquake insurance (compulsory)	£60-100/year
Maintenance charges (where applicable)	£400-800/year

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

FINANCE INFORMATION

The new mortgage law is expected soon, with many predicting that lenders will enter the market by the middle of 2007. Mortgage loans to non-nationals have been scarce or unattractive. This means the best option for foreign buyers is either savings or re-mortgaging an existing property at home. If you need assistance in raising finance in the UK we can assist in this matter. A major factor for the introduction of a more competitive mortgage market is preparation for a more regulated environment as part of the ongoing negotiation for entry into the EU - although this is due between 2014 and 2020. In the meantime, mortgages are more likely to be introduced as a result of domestic market forces.

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

Foreign buyers themselves are creating new economic conditions by raising property values and feeding the economy by creating new service industries or buying new products. As the price of property rises beyond domestic affordability, mortgages will become the only option for Turkish nationals.

CURRENCY

At present the average exchange rate for the Turkish lira is approx 230 YTL to £1 Sterling. There is no limit to the mount of foreign currency that may be brought into Turkey.

BANKING

In order to purchase a property in Turkey you will need to set up a bank account in Turkey. Our agents will be pleased to help with this. Turkish bank accounts pay from 10-20% interest per annum depending on how much risk you wish to take with your money.

Thanks to the strict banking regulations in Turkey no-one can withdraw money from your account and no-one can learn the details of your bank account. Please note that most of the big banks in Turkey provide internet banking services. Please ask your bank for details.

PENSIONS

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. Turkey has signed double tax treaties with some nations. However, due to the complexities of Turkish tax law it is advisable to contact a Turkish accountant for clarification on the tax status of any income you intend to utilize in Turkey.