(Newswire.net — September 2, 2022) —
From tax incentives and passive income to the simplification of cross-border travel and a comfortable move with integration into a friendly community in the territory of a resort country, we study the current reasons for buying property in Turkey. A minimum of emotions – only facts. Read to the end if you want to know more about houses in Turkey, and consult with Turk.Estate experts to close the deal on the most favorable terms!
Investment in Turkish real estate: “pitfalls” when buying
The decision to buy residential or commercial property in Turkey, each investor makes a decision based on their own reasons. Someone seizes the moment to invest very successfully in their own future. Someone after tourist trips to this hospitable country certainly wants to move to it for permanent residence. But all potential buyers have one thing in common: the desire to learn about the possible risks in the transaction. What “pitfalls” do you need to get information about so as not to be disappointed with the purchase?
If you are a foreigner who knows absolutely nothing about the peculiarities of the Turkish real estate market, the difficulties begin at the stage of selecting a specific option for purchase. What area is the best to invest in? What exactly to choose – an apartment, a house, a villa? How to check the documents of the property, so as not to buy real estate “with surprises”?
- The answer to the first question should be sought based on the purpose of the purchase.
- What type of property to choose? Even if there are funds to purchase a luxurious mansion, it is worth remembering that you will have to bear constant expenses for its maintenance in the future. This includes the annual tax and utilities, water and gas payments, electricity, and cleaning of the territory. Naturally, the number of expenses will be different, depending on what type of property is chosen – an apartment, a house, or a land plot.
In order not to get into a mess, you should not skimp on checking the documentation of real estate. Unfortunately, you can meet unscrupulous sellers and even scammers. To prevent trouble, it is better to pay a translator and a lawyer, with whose help it is much easier to understand the legal intricacies.
Features of documentation verification
What does the buyer need to make sure of before making a deal and settling with the seller?
- Be sure to find out if the property is not pledged. Both the developer and the ordinary owner can get into a difficult situation. So the risk is not excluded that a gullible foreigner will try to sell housing as a pledge.
- The situation should be alert if real estate on the coast of Turkey is sold through third parties. In this case, you can get on an unscrupulous seller. For example, some negotiate with several buyers at once and then choose the one that will give more, until the last moment assuring everyone else that they are ready to sign the contract.
- Difficulties can arise even in the case of cooperation with a developer who offers ready-made equipped apartments if you do not check all the documents for the housing. You should make sure that the company has an iskan – a kind of technical passport.
New tax incentives for those who decide to buy property in Turkey
An additional reason to invest lies in the reduction of the fiscal burden on home and land buyers. Innovations concern mainly foreigners who have decided to buy real estate in Turkey on a relatively large area and have chosen a large settlement to close the deal.
- Housing: Since 2013, the country has applied VAT rates on real estate in the amount of 1%, 8%, and 18% depending on the area, type, and location of the asset. Residences with an area of less than 150 square meters outside metropolitan areas / in the territory of urban transformation zones were subject to 1% VAT. In the case of other dwellings with an area of less than 150 square meters, an 8% rate was applied. When the threshold area was exceeded, in both cases an 18% rate was applied to the entire assessed value. According to the new regulation, the VAT rate will be 1% or 8% for residential properties up to 150 square meters, while 18% VAT will be charged only on the excess amount.
- Land: VAT on transactions for the purchase and sale of land, as well as real estate and other services for the organization of transactions for the sale of land, is now set by the authorities at 8%.
- Commercial properties and other: Experts additionally expect the Turkish president to initiate a reduction in the VAT rate for commercial real estate to 8% (today it is 18%) and to reduce the tax on property purchase transactions from 2% to 1%.
An important point to note is that the old VAT regulations will continue to apply to residential buildings in projects where building permits have been obtained before the effective date of the new VAT regulation (April 1, 2022).
Rising prices and high rates of real estate sales in Turkey
When deciding to buy property in Turkey, expats today may well make good money on capital gains, given the high growth rates of the value of such assets. According to experts, today there are 3 main locomotives for rising property prices in Turkey:
- Panic Buying: The changing financial habits of Turkish citizens who, in the face of abnormally high inflation, are turning away from deposits in favor of home purchases.
- An influx of Foreigners: Numerous foreigners decide to buy Turkish housing, viewing the Middle Eastern country as a “safe haven”.
- Scarcity: Lack of supply is the most pressing problem in the housing market, also pushing up asking prices and rents.
- Expensive building materials: The cost of new buildings for sale in the Turkish market is rising due to higher material and labor costs.
Real estate in Turkey
Turk.Estate experts are ready to support expats at all stages of relocation to Turkey, assisting in solving related issues, including tax planning and interaction with banks.