If you are planning to invest in real estate in Turkey, this should be a smart decision. In this article, you will find useful information for potential buyers who would like to purchase an apartment or a house in this country.
The real estate market in Turkey is flourishing. This country can boast of a pleasant climate, developed infrastructure and a high standard of living. Customers from all over the world eagerly purchase apartments and private houses here either for investment purposes, for resale or for personal usage. Below, you will find valuable insights on buying real estate in Turkey if you are a foreigner.
How Much Money Do I Need to Buy Property in Turkey
It depends on your objectives. In case you aim to invest in a budget housing project, you can spend up to $50,000 and enjoy a nice ROI in a few years. But if you are interested in the upscale segment, be ready to spend several hundreds of thousands of dollars.
Real estate in Turkey is not as exorbitantly expensive as in some Arabic countries. Yet if you are looking for Istanbul houses for sale, mind that it is hardly possible to find high-quality property in the capital at an affordable price. Istanbul is costly — yet your investment will be worth every cent. You will be surrounded by historical mosques, modern shopping malls and restaurants with delicious meals. Istanbul is an amazing city to live in and the resale value of its housing always remains at a competitive level.
How High Are the Taxes
The national legislation limits the real estate agent’s commission to 4% of the property’s value. If compared with agency fees in other countries, this is not too much. Besides, sometimes the agent gets this commission from the construction company and not from the customer.
As for the VAT, you would not need to pay it if you are the first owner of an apartment or house in a new project. Also, you would be exempt from this tax when purchasing the property from a person for whom this trade is not a profession. However, if you purchase housing from someone who systematically makes money on it and you turn out to be not the first owner of the property, then be ready to pay VAT.
If you are planning not to live in the property yourself but rent it, you should know that in Turkey, bills and maintenance fees are normally paid by tenants. In case the house stays empty for a certain period, you would still need to pay a small ratio of the bills yourself. In addition to the conventional gas, water, electricity and waste management bills, you would need to pay the environmental tax too. It is calculated depending on the usage of water as well as the geographical location of the premise and is added to the water bill.
Plus, because of seismic hazards, you would need to pay for the mandatory earthquake insurance. This would cost you approximately $30 per year — but in case you fail to pay it, your purchase might be declared invalid.
Besides, foreigners are required to pay a land registry service fee that changes annually. At the moment of writing this article, it was around $110. Also, there is a revolving capital service fee that depends on the geographical location of the property — this one should cost you less than $100. Finally, a company registered in Turkey should issue an appraisal report for you — and you would need to pay from $200 to $500 for it.
If you sum up all these fees, you will see that your expenses would be rather reasonable.
Benefits of Buying Real Estate in Turkey
Turkish economy is one of the twenty biggest on the global scale. It is growing steadily and its investment regime for foreigners can be characterized as exceptionally liberal. If you need a mortgage, you can apply for it in a Turkish bank and most likely it will be approved. If you opt for paying in installments over several years, this should also be possible. After you sell your property, you should have no problems transferring funds to a foreign bank.
Thanks to the favorable climate, the pace of construction in Turkey is generally very high. The builders normally do not need to stop or slow down their work due to poor weather conditions — that is why houses are often put into operation earlier than planned. Delays are rare — but in case you want to play safe, you can purchase insurance in one of the national banks. During the construction process, the price of the property considerably increases, so many people prefer to buy their houses at the earliest stages, knowing that it would be safe and profitable.
If you purchase a small apartment for rent, you would be able to earn around $6000 on it every year. In case you would like to permanently relocate to Turkey, you have a right to apply for citizenship in 5 years after becoming a property owner.
The risks of a potential buyer are reduced to a minimum since there is a single register for all real estate objects in the country. The document that certifies ownership rights is called TAPU and one normally receives it a few days after the application. The procedure of registering the document in the Department of Cadastral Office is very simple and entirely transparent.
All things considered, there is no wonder that real estate purchase deals account for 12-15% of the total foreign investment share in this country.
Conclusion
If you are planning to invest in real estate in Turkey, this would be a smart decision. The national legislation offers lucrative conditions for foreign investors and the construction industry is booming. In case you are planning to rent out your house or apartment, there would be a demand for it all year round. Those who would like to relocate to Turkey permanently or live their on holiday will enjoy its affordable food pricing, developed infrastructure and sunny climate. No matter if you want to invest in an accomplished building or the one at the early stage of construction, you would be spoilt for choice.
