Buying a property overseas is an exciting prospect, with a complete change in lifestyle available for expatriates, investors, and second-home buyers looking forward to warm continental summers and a relaxed pace of life along the Turkish Riviera.
However, property transactions can be complex, and it is essential any buyer understands the process, from legal charges to mortgage borrowing and property taxes to finding the best place to live.
Property Turkey, the experts in property for sale in Turkey, explains all the essential information you need to know to ensure your acquisition goes smoothly and meets your property ownership aspirations.
Overview of the Turkish Property Market
Average property prices in Turkey have risen over the past two years, primarily due to inflation, making it more important than ever for investors or expats buying property in Turkey to research their options and consider varied locations.
Istanbul, the largest and inevitably most expensive city for property investment, had an average listing price of TRY 26,904 (£1,091) per square metre in November 2022, compared to TRY 16,984 (£689) as a national average, according to data published by the Central Bank of the Republic of Turkey.
However, other regions are lower cost, with average listing prices during the same period of around TRY 12,446 (£505) per square metre in Ankara, the capital, and TRY 20,861 (£846) in Izmir.
As hyperinflation begins to ease, demand for property remains steady, with foreign investment rising 20.4% in 2022 with over 60,000 units purchased - a record high.
Why are properties in Turkey so attractive to global investors and expats? Part of the equation is that the Turkish lira has weakened over the past three years against other currencies, making property lower cost to international buyers.
For example, in December 2019, a US buyer could exchange $1 for TRY 5.85, whereas in December 2022, they would receive TRY 18.66. Even with inflation and growth in property values, this makes Turkish property very competitively priced.
Rules for Turkish Property Purchases for Foreign Nationals
Foreign nationals do not need a residence permit or formal residency status to purchase a home in Turkey. Some property investments, valued at $400,000 (USD - £321,375), may even qualify for Turkish citizenship, although various conditions apply, such as retaining the property for at least three years.
Non-residents must, though, register with the local municipality to receive a 'Foreigner Identity' number, called a Yabanci Kimlik number, a free-of-charge service.
Restrictions apply as follows:
- Foreign nationals can purchase property covering up to 30 hectares in volume.
- Properties within military and security zones are not available to rent or purchase.
- A foreign national can buy up to 10% of the total property or land space in small towns.
Prospective buyers, particularly those interested in property acquisitions eligible for the Turkish citizenship by investment scheme, are advised to work with a local property expert to ensure any residence they buy is eligible.
The Average Cost of Buying a Home in Turkey
Some of the most popular and in-demand cities and regions, such as Muğla, Bursa, Istanbul and Izmir, have higher average property costs, although there are often opportunities to buy homes in new developments or a little outside of the central economic areas.
However, the property price is only one aspect of buying a home, and it is important to budget carefully to ensure you account for other costs such as mortgage borrowing, agency fees, property taxes and stamp duty.
Most buyers spend roughly 7% to 8% of the purchase value on other costs, with generous tax treatments that mean international buyers have lower expenses than in other countries due to the absence of VAT on their first property purchase, provided the purchase is made in a foreign denomination and they retain the property for one year.
Mortgaging a Turkish Property
Buyers looking for mortgage financing can apply for an international mortgage specifically designed for expats or apply to a Turkish bank, several of which have mortgage products suitable for foreign nationals.
Interest rates, application fees and product costs vary between lenders, so it is worth comparing several quotes or working with a broker with experience in the local lending sector.
Property Acquisition Legal Processes
Most solicitors charge the equivalent of £1,000 to £1,500, depending on how complex the transaction is and the scope of the legal or conveyancing work they are asked to undertake. Hiring a local solicitor is strongly advisable to ensure the contractual terms are reasonable and the ownership deeds are registered correctly.
Experienced property agents charge a standard 3%, which covers the costs of finding suitable properties, negotiating the purchase value, and liaising between the vendor and the buyer.
Accounting for Stamp Duty and Property Taxes
Turkish stamp duty is levied at 4% on an assessed value, normally around 60% of the final sale value, payable when the property title deeds are registered. Off-plan property purchases do not attract any stamp duty liability until construction is finished and the property passes into your possession.
The local property tax, Emlak Vergisi, is payable in May and November, split into instalments, and based on the property value, charged at 0.2% on residential buildings and up to 0.6% on vacant land where construction or development is yet to begin.
Finding the Ideal Places to Buy a Property in Turkey
The ideal starting point to choosing the city or region you would like to live in is to assess your aspirations and priorities – for example:
- Do you need a property close to a business, place of employment or school?
- Would you prefer to live in a metropolitan city area or closer to the beach and countryside?
- Are you considering renting out your property for part of the year?
- Istanbul will always appeal to buyers looking for proximity to international airports, excellent infrastructure, cultural attractions and amenities, with several neighbourhoods subject to extensive renovation and restoration.
Seaside resorts such as Antalya, on the Mediterranean coast, are highly sought-after by second-home buyers and those looking for holiday homes with strong rental potential. Bodrum is also a fantastic choice, with premium properties and thriving expat communities.
However, there are countless other options, from Fethiye on the beautiful Turkish Riviera coastline, the lakeside area around Dalyan and the Black Sea resort of Trabzon, offset by unspoiled nature at the foothills of the Kaçkar Mountains.
For more information and guidance about picking the ideal place to purchase a home in Turkey, comparing average investment costs, and navigating the legal aspects of foreign property acquisition, please get in touch with the experts at Property Turkey at your convenience.
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About Property Turkey: With 20+ years experience in the Turkish real estate market, team Property Turkey are your experienced, friendly and independent overseas real estate consultants. Our head office is located in London, UK with regional operational offices in: Bodrum, Fethiye & Kalkan, Antalya and Istanbul.
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Original Source of the original story >> The 2023 Guide to Buying a Property Abroad in Turkey
