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BUYING
IN TURKEY – FAQS
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| Believe
it or not, can be simpler to buy a house in Turkey than it is in
the
UK. Even for foreign buyers the process is relatively straight forward.
However, Turkey is noted for its bureaucracy and it’s important
to
follow all the correct procedures to avoid potentially costly mistakes.
At Utopia we’ve
done our best to answer your FAQs, but please
bear in mind that laws change, goalposts move and this page is
intended
for guidance only. For more detailed
and/or specific information, we
suggest that you contact us direct…
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| Buyers
Guide (Click
on question for information) |
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1:
Who can buy property in Turkey?
Turkey has reciprocal agreements with a
number of countries which allow
their citizens to legally own real estate in Turkey, having the same
right
as Turkish citizens. These countries currently include Australia,
Austria,
Belgium, Canada, France, Germany, Greece (providing that some
restrictions are reserved), Holland, UK, Ireland, Italy, Norway, Turkish
Republic of Northern Cyprus, Luxembourg, Spain and the USA. It is
probable that in the future, other countries will be added to the
list.
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2: Where
can I buy property?
Foreigners are permitted to buy property
in their own name in most of
Turkey’s tourist destinations, including Dalyan.
A recent change to the Village Act (Article
87) means that foreigners
can now own property that is outside the centre of a village, providing
there is a valid tapu (or title deed). Property which remains out
of bounds
to foreign buyers includes that which is located within a particular
distance of military sites or strategically important areas (according
to
the Military Prohibited and Security Areas Act).
In effect, most of Dalyan is open to foreign
buyers. But if you wish to
obtain property in areas such as Gokbel, you may need to do so through
a
Turkish company or bank. In these areas, much of the land is officially
owned by the Turkish government or forestry ministry and it is only
possible to obtain use of the land, not outright ownership –
thus any
purchase involves an element of risk. As this is a complex subject,
may we
request you contact Utopia direct for more information.
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3: Do
I need a lawyer?
In Turkey, all property transactions take
place at the local Property
Registry Office. There is no legal requirement for a solicitor or
notery
to oversee the process. However, it’s vital to ensure that all
legal
restrictions are adhered to; that there are no problems (eg debts,
mortgages or encumbrances) on the vendor’s side; and that he/she
is free
to sell the property (ie. the title deed is not shared.).
For this reason, professional advice is essential.
Utopia has plenty of
experience in the property business and we are happy to undertake
a
through investigation of any prospective purchase.
But for extra peace of mind, we strongly
recommend using a lawyer
(avukat). We can provide you with the names of locally-based English-
speaking lawyers, any of whom will be able to conduct the necessary
searches, guide you through the buying process and, if necessary,
act as
your representative at the completion stage.
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4: What
about surveys and searches?
Few Turks bother with a structural
survey (partly because building costs
in Turkey are comparatively low) but we can arrange for a builder
or
architect to check over a property for you, if you wish.
Searches are a more serious matter. As well
as ensuring that your land
or house is in an area where you can legally own it, you need to be
certain
that any building (one already standing or your own project-in-waiting)
complies with the zoning plan – or imar. This dictates how much
of a plot
can be built on – usually 30%, 20% or 10%. In rural areas, the
usual limit
is 5%. The only exceptions are houses built before the imar was imposed
on an area.
You will also need to check whether there
are plans for any roads or
other structures which may affect the property in the future.
At Utopia, we do our best to check the tapu
and imar plan for every
property or land plot that we market – however, we cannot be
held
responsible for unforeseen problems, which is why we recommend you
engage the services of a lawyer.
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| 5: What
are the purchase costs?
As a rule of thumb, budget around 8% of the purchase price to cover
related expenses. Click here for a breakdown of current purchase
costs. |
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| 6: What
does the purchase procedure involve?
First make your offer. If it’s accepted, you will make a contract
with the
agent and vendor, specifying the sales price, deposit paid, balance
due and
completion date. The contract will be translated for you and you
keep a
copy. The minimum deposit is 10%. In Turkey this is generally paid
in cash
(Turks are unwilling to accept foreign cheques since they can take
weeks
to clear). Most banks will implement a commission charge of up to
2.5% on
traveller’s cheques or credit card payments. If you don’t
wish to carry
cash, you could make an arrangement with your bank, prior to leaving
the
UK, for a money transfer – you can then fax them with the
Turkish bank
details when you are ready to pay over the deposit and they can
send the
money.
At this point the agent may ask for half of their fee – 1.5
per cent of the
purchase price from both buyer and vendor – with the remainder
to be
paid upon completion.
You should then obtain at least 3 good photocopies of your passport(s).
These will need to be translated and authenticated at the notery’s
office.
Please note that if you buy in joint names, you’ll need to
have both
passports translated and be liable to pay two lots of tax, including
purchase tax. You will also need to make two payments to your lawyer,
should you use one.
If you wish to nominate a lawyer or other person to complete the
purchase
on your behalf (to save you a journey to Turkey), the notery will
also
prepare power of attorney forms for you.
Next step is obtain a plan of the property from a surveyor (the
equivalent
of a UK land registry plan) and your tax numbers from the tax office.
Last step is to open a bank account at a Turkish bank – you
may need
accounts in both Sterling and Turkish Lira (plus Euros if the vendor
requires payment in Euros). But this is a simple process.
There is usually a waiting period of at least 45 days between your
offer
being accepted and completion of sale. This is the time it takes
for the
copy of your passport, the land plan and other paperwork relating
to the
property to be checked and processed by the military authorities
in
Turkey. The main reason for this is to ensure that the property
is not in a
military zone.
You have the choice of waiting until the paperwork is ready and
returning
to Turkey to complete the sale, or nominating a lawyer (or another
person)
to act on your behalf.
If you choose the latter, you will need to give your lawyer or
representative power of attorney (see above). You should supply
at least
4 passport-sized photographs and nominate a bank account into which
the balance will be transferred. Please note that the lawyer (or
person holding power of attorney) will need access to this account.
He/she will then
contact you when the purchase is completed.
(Unless you are certain you will be able to come to Turkey to complete,
it’s recommended that you arrange power of attorney while
in Turkey since
this is very difficult to arrange from the UK!)
While waiting, you should arrange for the balance to be transferred
from
your UK bank to the Turkish bank. This generally takes at least
5 working
days. It’s IMPORTANT you keep all paperwork referring to the
transfer
so you can prove you brought the purchase funds from abroad. Please
note
that if can take up to 4 weeks for the funds to clear for withdrawal.
If you choose to return to Turkey to complete the purchase, you
can bring
your photos with you (see above). Expect to complete the purchase
in one
(exhausting!) day. This will involve a visit to the deeds office
and much
running around. Don’t worry, a representative of Utopia will
be with you
allthe time. Back in Dalyan, you’ll to register your purchase
with the
Belediye (local council). Then you can crack open the champagne!
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7: Do
I really need an estate agent?
Agents in Turkey charge 6% commission –
3% to the buyer and 3% to the
seller. Foreigners aren’t used to paying commission on a purchase.
So why
pay it in Turkey. A fair question. But…
At Utopia, we believe that we earn our commission.
We don’t just sell;
we check out every property or piece of land before it goes on the
market,
doing our best to ensure that all paperwork is in order and that there
are
no ‘hidden’ catches. We take the time to assess your needs
and to supply
you with details of properties which best suit your needs - if necessary,
we will undertake a specific property search on your behalf. Should
you
decide to buy, we will be your English-speaking point of contact
throughout the entire purchase process.
So while we act as agents for the vendor,
we also act as agents for you!
This is how we earn our 3%!
A word of warning: Dalyan is full of ‘estate agents’.
The man who
drives your taxi, the smiling rug dealer, the restaurateur –
all will
offer to find and/or build your dream home, and some will deliver
the goods! Others will take you on a tedious trundle around houses
you don’t want or land you can’t build on. Even if they
find you
something, be assured that they are making money out of you –
usually considerably more than the 3% a genuine estate agent will
charge. Most get away with it because they have a reasonable
command of English and a good deal of charm. BUT unless they are
registered estate agents (and most are not) they are acting illegally.
And you will have no comeback should they sell you an unsuitable
property or give you incorrect advice.
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8: Is
it cheaper to build than restore?
It can be – up to 30% cheaper. But this depends on a) the original
conditionof the house and b) how much you intend to do to it. If you
buy
a property in reasonable condition and do not more than fix the roof
and
update the plumbing and wiring, you’ll save on building costs.
But
attempting to turn a charming old ruin into a heritage piece will
cost you
dear.
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9: Who
will supervise the building?
Utopia
manages building projects, acting on your behalf throughout the
process. We contract the builders, monitor their work and make sure
your
bedrooms face in the right direction and you don’t end up
with brown tiles
instead of blue! Simply put, we are your eyes and ears, sending
you regular
progress reports (backed up by photos), detailing where your money
is
being spent and ensuring your wishes are being met.
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| 10: What
will it cost?
The size and design of the house,
the proximity to roads and utilities – all have a bearing
on cost. Building materials are affected by inflation. Government
rules, which dictate the cost of licences and permits, change
with the wind. For this reason, the following guide is a rough estimate
of costs, based on July 2004 prices…
* To build a two-storey (50 sq m per floor) 3-bed villa –
from £55,000
* To build a one-storey village house over 100 sq m – from
£40,000
* To build and equip an average size swimming pool – from
£12,000
These estimates include the cost of building materials and labour,
plans and permits, and a mid-range architect’s fees. They
assume you will opt for medium quality tiled floors, standard lighting,
kitchen and sanitary fittings. Furniture/white goods will cost extra.
Should you decide to nominate Utopia as your building project managers,
we will charge 7-10% of the final building cost, depending on the
extent of our involvement.
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| 11: How
much will I pay for utilities and taxes?
Water is metered
and costs around 40p for 1000 litres. Electricity costs about 5p
per unit. Gas is around £10 a bottle and one of these lasts
3
months with daily use. Annual property tax is charged at between
0.3% and 0.6% of the property’s purchase price, while Dalyan’s
annual ‘community charge’ (for street lighting, rubbish
collection and so on) is a few pounds a month.
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| 12: Who
will look after my home when I'm not around?
Utopia
has its own in-house property management service called House Minders.
We can look after your Turkish home for one-off yearly fee. A small
price to pay for peace of mind. For more information, please go
to the Property Services page. Property
Services.
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| 13: Can
I let to holiday makers?
Turkish law allows you to rent out your home and profit from it,
although rental income is liable for tax assessment in either the
UK or Turkey, and
it’s as well to ensure you are abiding by all the local by-laws.
At Utopia, we prefer to concentrate on sales so we leave the letting
to
other people. If you want help with letting your home, we can put
you in
touch with rental compannies such as Dalyan
Villas – a UK-based agency specializing in letting privately-owned
villas in Dalyan. You can contact
them on www.dalyanvillas.com
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| 14: What
if I want to sell later on?
There’s nothing to stop you selling up and moving on. However,
it's
important that when you buy, you transfer your purchase funds into
Turkey through a Turkish bank account, identifying the purpose i.e.
(transfer purpose for the purchase of Turtle House, Tapu No. 1234)
and ensuring you have enough to cover both the purchase and any
related expenses. Keep all receipts so that you will have no problem
should you later wish to sell up and take the money out of Turkey.
You are free to sell to Turks or foreign buyers. A legal change
(Decree
32 August 1989) has made the Turkish lira convertible so proceeds
of the
sale of a property can be converted to whatever currency and subsequently
transferred to any country you choose.
Freehold resale costs (local documentation and legal fees, plus
agent’s fees) work out at around 5% of the sales price.
Residential sales are subject to capital gains tax in Turkey unless
the property has been owned for at least four years. However, the
UK tax position depends on individual circumstances and Utopia recommends
you consult an accountant and/or talk to the Inland Revenue direct.
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Copyright
© 2004 [Utopia Properties]. All rights reserved.
Revised: 24/11/04.
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