The Buying Process: Turkey
Author Leaonne Hall is an expert on the overseas property market and has written extensively for a number of newsstand titles. She previously produced three editions of the Red Guide to Buying Property in Eastern Europe, and has been writing in detail on the individual markets since 2003.
THE BUYING PROCESS
With recent years seeing a relaxation of property legislation, it has become easier for foreigners to purchase a home in Turkey. However, this is still not an easy country to buy in, so don’t enter into the conveyancing system unprepared – always carry out the correct background checks on the property and vet the estate agents and lawyers before you put your trust – and money – in their hands.
Stage 1: Restrictions on foreign buyers
A foreigner can buy with no legal restrictions in Turkey, although you are not allowed to buy property in areas which are deemed to be important to the military. Foreigners also need to get military permission to buy in the country and by applying for this, it allows the government to ensure you won’t be in a militarily sensitive zone, and to carry out a check on your character with the UK government, should they choose to do so. As long as the property is correctly zoned and you are granted permission then you are free to buy it.
Generally, this process only takes two to three months, although there has been a backlog recently, following a government review of property legislation, which put a freeze on sales to foreigners. It is believed that one of the requirements for EU entry will be the removal of military permission, although this has yet to be confirmed.
Stage 2: Financing your purchase
Financing has become easier in the last few months as the government has overhauled the mortgage system. Traditionally, foreign buyers would have to secure a loan or release equity from their property in their home country. However, you can now get a mortgage at a rate of 1.5% to 3% over a 15-year period. It’s still early days, though, and these terms are likely to improve.
Stage 3: Land registry, background checks and surveys
One of the most essential things to be aware of when looking to purchase a Turkish property is the Tapu, or title deed. The Tapu office is the land registry, where details of the property deed will be kept and where your lawyer will need to carry out all the necessary background checks on your property. These checks include making sure that the property is not located within a Military Security Zone, checking that there are no outstanding charges (such as mortgage payments) on the property, and finding out about the ownership situation – you need to make sure that the seller is the registered owner.
When it comes to purchasing, you should also do your research on the developer you are purchasing from, as there is no system in place to protect the buyer should the developer go bust before completion. Therefore, it is imperative that you invest in a trustworthy developer.
Surveys are not normally part of the purchasing process, but if you are buying an old property, you should always get a structural survey carried out; new properties generally tend to come with a guarantee.
Stage 4: The contract
Once you have carried out all of the necessary background checks and are confident you are dealing with trustworthy developers and agents, it is time to take the first step in the conveyancing process. The necessary stages to follow for completion vary, depending on whether you are buying a new-build or old property.
Buying off plan
If you are buying a newly-built property, you will need to pay a reservation fee of 1–2% which is non-refundable and will take the property off the market for 20 days. A contract will then be drawn up between the buyer and the developer, which will contain the payment schedules and terms and conditions for the sale. Once the preliminary contract is agreed, you will then need to sign and pay a deposit of between 10% and 30%. In order for the sale to be finalised, a final contract needs to be signed by both the buyer and seller, and then military clearance needs to be applied for. Once this is received, the Tapu can then be transferred to the buyer’s name. During construction, you will continue to pay the outstanding balance in instalments, as agreed in the contract. The first payment is usually paid on the signing of the final contract.
Purchasing a resale property
If you are buying an old property you will sign a preliminary contract, with the deposit paid on signing. Once the deposit is paid, you need to ensure the title is clean with the Tapu. If it is, the final contract can be signed and your lawyer can apply for military clearance. Once this is received, the title will be transferred into your name, making you the legal owner.
Stage 5: Registering the property
Once all the paperwork and necessary payments have been carried out, you will be able to apply to have the property registered in your name. In order to do this, you’ll be required to secure a Turkish tax number and be registered with the tax office. The title deeds can then be sent to the Tapu office and you will be registered as the new owner. Be aware that your title deeds will also carry a photo of you.
Stage 6: Additional costs
Earthquake insurance is compulsory in Turkey, although the fee is generally around £50 for the year. With new builds, you should also be prepared to pay management charges, which generally sit at around €5–€10 per square metre per year, depending on the facilities on site.
Generally speaking, additional costs don’t normally come to more than 10% of the purchase price and this includes 1.5% stamp duty, 3% for estate agents’ fees – payable by both the buyer and seller – legal fees of 5% and transfer tax of 1.5%. You will also be liable to pay an annual property tax based on the declared value of the property, which currently stands at 0.3%.