Costs of buying a property in Turkey 2021
Turkey is one of the most preferred countries for living and investing with its unique location, magnificent geography, the culture that is the legacy of different nations and civilizations, climate, deep-rooted history, and the advantages and opportunities it provides to foreign investors. There are some important issues that foreigners who want to invest in Turkey, which has made great progress in the real estate sector and is shown as one of the most attractive countries, should pay attention to. One of the most important issues to be considered is working with accurate and reliable real estate consultants. Considering the high-profit rate of the real estate market in Turkey, working with the right real estate consultant is an important issue in increasing the profitability rate and preventing possible risks. Real estate sales to foreigners in Turkey is a subject that requires expertise in many subjects such as VAT exemption and refund, acquisition of Turkish citizenship, and residence permit. An expert real estate agent is in a position to provide serious advantages to the investor. Therefore, the real estate consultant to work with should be carefully selected.
In these and similar situations, benefiting from advantages, not losing rights, and making the right investment requires correct guidance and management. After reducing Turkish citizenship by investment to 250,000 USD, the demand for real estate in Turkey has greatly increased. The professional and experienced team of Diyar Turk Real Estate provides the best service to its customers who want to obtain Turkish citizenship through investment in Turkey.
Why Should You Invest in Turkish Real Estate?
Turkish Citizenship Opportunity by Investment: The Turkish government reduced the amount of naturalization from 1,000,000 USD in the past years to 250,000 USD. For this reason, there has been a significant increase in the residential real estate investment market. Turkish citizenship attracts great attention with its affordable price and easy application process. Foreigners who buy real estate worth 250.000 USD or more, can have a Turkish passport with their family (spouse and children under 18).
Low Purchase Costs: Turkey has an affordable real estate market compared to many European countries. Unlike other countries, it has low purchasing costs, low tax rates, and an easy purchasing process.
Profitable Purchase Opportunity with High Exchange Rate: Foreigners who want to buy real estate in Turkey expect many advantages as well as exchange rate advantages. This temporary loss of the Turkish Lira against foreign currency means a good opportunity for foreign investors.
Quality and Modern Real Estate Diversity: The Turkish real estate market, which is developing and growing day by day, offers investors quality and modern real estate purchasing options. The Turkish real estate market, which includes quality real estate suitable for every budget, is growing and developing every year.
High-Profit Opportunity in the Short Term: Real estate investment is defined as the medium and long-term investment type with the least risk. Real estate prices, which appreciate very quickly in Turkey, offer high profitable investment opportunities to their investors in a short time.
Ideal Country for a Quality Life: Turkey is a country that is frequently referred to for life as well as for high-profit investment. Turkey, which is preferred by those who want a peaceful life in retirement and engaged in trade, has many centers of attraction.
What Should Be Considered While Buying Real Estate in Turkey?
- It is necessary to obtain information about the properties such as the location, age, etc. of the real estate, and to act accordingly.
- Those who want to invest in housing that will be appreciated in a short time should invest in real estate in a developing region.
- The location of the real estate to be purchased in a central or rural location is of great importance in terms of its value.
- Buying a property from a central location offers profitable profits both in the short term and in the medium and long term.
- Urban renewal zones are a good alternative for investors who want to buy low-priced real estate for long-term investment.
- Investors should investigate the conformity of the house to be purchased with the earthquake regulation.
Additional Costs That May Come to You When Buying a Property 2021
When buying a property in Turkey, there are additional costs such as title deed fee, valuation report, TCIP insurance, subscriptions, and translation fees, in addition to the real estate sales price. In addition, there are extra fees such as notary fees for sales that require power of attorney, and interest fees for sales on credit.
An investor who decides to buy real estate in Turkey should act knowing that some extra expenses are waiting for him other than the real estate price. For this reason, he should know that there will be many payments other than the sale price of the real estate and should adjust their budget accordingly. Working with a professional real estate agent in this process protects the investor from unexpected expenses. An investor, acting without knowing the extra costs, may face unexpected costs, which may cause him to abandon the investment. So, what to do for unexpected unpleasant payments? What kind of costs awaits buyers when buying real estate in Turkey? In this article, we will talk about the costs of buying property in Turkey for 2021.
Buyers who are planning to buy real estate in Turkey find the expenses made while purchasing real estate to be low compared to other countries and they are satisfied with it. However, anyone who is considering investing still wants to know where to pay and how much. For this reason, we have listed the fees that must be paid when buying real estate in Turkey.
Costs of buying a property in Turkey in 2021
Title Deed Fees
The title deed transfer tax in Turkey is calculated as 4% of the real estate sales price. For this reason, the amount of title transfer tax to be paid will vary according to the value of the property to be purchased.
In real estate purchasing processes, you may encounter much more taxes and extra payments than you think. The first and most important of these extra costs is the title deed fee. Title deed fees generally include the title deed revolving fund, which is another compulsory payment item.
During the title deed transfer process, the Directorate of Land Registry and Cadastre demands a fee of 4% of the real estate value. Real estate values declared in Turkey depend on local price brackets and are usually lower than sales prices. In Turkey, it is forbidden to show the sales price stated in the title deed lower than the current market price received from the municipality. However, most transactions are shown at fair value, which is less than the sales amount. This, which is done to pay less tuition and income tax, may cause some problems later on. If it is determined by the Revenue Administration that the sales price is higher than the amount shown, there is a possibility of penal action due to the difference in the declaration, due to the deed fee, and the missing fee.
Another of the main expenses to be paid after buying a property in Turkey is the property tax. Property tax is a type of tax that is paid once a year, every year. All purchased immovables (land, residence, shop, land) are subject to property tax. The amount to be paid may differ from year to year. It can also vary according to many criteria. For real estate tax inquiries, your password from e-devlet or Internet Tax Office of the Revenue Administration and your T.C. identity number can make a debt inquiry with your ID number. Although it is known as a mandatory payment, people who are exempt from property tax are not obliged to make this payment.
Widowed, disabled, unemployed, retired, and housewives who do not have a second home can benefit from the property tax exemption.
Are property taxes high in Turkey?
Property taxes in Turkey are low compared to many countries. An annual property tax of 0.2% is charged for each real estate in metropolitan areas and 0.1% in non-metropolitan provinces. For commercial real estate, 0.4% is paid in urban areas and 0.2% in non-metropolitan areas. When signing for the deed, the seller must ensure that the property does not owe property taxes.
Translator and Power of Attorney Fees
Foreigners who want to buy real estate in Turkey need a sworn translator during the title deed transfer. At that time, he needs an interpreter who will convey the questions asked in the title deed to him and assist him during the deed transfer. Some documents need to be translated. Translator and power of attorney fees vary depending on the language being translated, the content, and the length of the document. The average fee for a sworn translator varies between 300-500 TL. The power of attorney fee varies between 750-1100 TL on average.
Real Estate Valuation Report (Appraisal Report) Fee
For real estate sales to foreigners in Turkey, an appraisal report on the real estate value is required before the title deed transfer. The fee for the appraisal report approved by the Capital Markets Board varies according to the city where the real estate is located and the characteristics of the real estate. The average appraisal report cost in Istanbul is between 1700-2000 TL. Real estate buyers pay this price to the Land Registry and Cadastre Real Estate Appraisal Directorate. Real estate valuation report transactions are completed within 3-5 working days on average.
Many people need credit support to buy a house. Although many construction companies in Turkey, especially in Istanbul, offer ease of payment with a payment plan, in some cases, it may be necessary to use a loan. Housing loans consist of packages prepared by banks by different budgets in line with the needs of their customers. To get a housing loan, the house to be purchased must be suitable for the loan. If the house is not eligible for a loan, the bank rejects the loan request. If the house is suitable for taking out a loan, the bank approves the loan and mortgages the house until the loan debt is discharged. In case the loan debt is delayed or not paid, the house is seized by the bank.,
Housing loan is given to people who have fixed income, have insurance, and will not have difficulty in paying the loan. Previously used credit and time-paid credit debts play a large role in attracting credit. In addition, other banks' references and tax debts are checked. When all the conditions are met, 20% of the housing fee can be taken as 80% credit in advance. Housing loans can be used in Turkey with a maturity of 5-10 years.
After purchasing a house, some subscription transactions such as electricity, water, natural gas, telephone, internet, etc. are required for use. Electricity, water, natural gas, and internet subscription fees vary from city to city. A certain amount of deposit is paid for subscriptions made for the first time. This deposit is refunded when you want to unsubscribe. To make all these subscriptions, first of all, a residence certificate and a TCIP insurance policy must be obtained.
DASK (Mandatory Earthquake) Insurance
Immediately after the title deed transfer, the new owner of the house must take the TCIP insurance policy immediately. TCIP (DASK) insurance fee is determined by the square meter of the house, the number of floors, etc. varies according to physical conditions. It is a document that must be submitted during subscriptions such as electricity, water, and natural gas. DASK is compulsory earthquake insurance that every property owner has to have. It is a type of insurance that covers damages that may occur to the property during or after an earthquake. TCIP only covers the basic components that make up the physical structure of the house, such as the building's foundations, walls, ceilings, floors, stairs. It is often confused with private home insurance. Housing insurance is not compulsory, anyone can have it and everything, including the belongings, can be insured against all kinds of risks (earthquake, flood, fire, theft, etc.).
Renovation and Maintenance Fees
If a turnkey or new apartment is not purchased, there may be some situations where renovation or maintenance will be done at home. In such cases, repair and maintenance fees must be added to the budget. Old houses usually require renovation and maintenance. In such cases, you should consult a real estate agent and seek advice. Thus, you can find out in advance what maintenance and renovation costs may be in the apartment and you can get information about potential costs.
Renovation and maintenance fees may include maintenance such as electrical and plumbing maintenance, paint and whitewash, repair of floor coverings, repair of kitchen and bathroom cabinets, remodeling of bathroom flooring, shower cabin, and tub replacement. To avoid a bad surprise afterward, every place should be examined before buying a house and detailed information about every detail should be obtained.
Dues (Maintenance) Fees
In Turkey, dues (maintenance) fees cover the expenses of common areas in public living areas (such as apartments, residential complexes, and villa sites). Fees include common uses and areas such as electricity, water, heating, elevator maintenance, cleaning, environmental and landscape maintenance, and social facilities. In housing complexes with extensive social facilities, the dues fees are higher than in a normal apartment.
How much are the dues fees in Turkey?
Dues fees in Turkey vary according to the service provided and the number of apartments in the housing complex. There are also different prices for apartments and villas. In addition, as the number of properties in a site increases, the fee per residence will be less since the total cost is shared among the residents.
We recommend anyone who wants to buy real estate for citizenship in Turkey get the help of a lawyer. The assistance of a lawyer is needed as the citizenship process is a bit more complex than the housing purchase process. Many lawyers in Turkey can speak English. As Diyar Turk Real Estate, we advise an experienced and foreign language-speaking lawyer during the citizenship process.
Environmental Cleaning Tax
In Turkey, there is an environmental cleaning tax collected from house owners. If the Environmental Cleaning Tax of the house you bought has never been paid, you can submit your declaration by applying to your municipality with the title deed since you are responsible for the date of purchase of the property.
"Environmental Cleaning Tax" is calculated per cubic meter based on the amount of water consumption. The calculated "Environmental Cleaning Tax" is collected with the water bill for the residences.