Gokce,  Tuesday, 2 December 2014

 

Now that you have decided to buy a property in Turkey, your next question will be: how much will it cost me? It is a complicated question depending on your finances, the type of property you wish to buy, and calculating your annual expenditures for such a property. Once your intension is clear, the hard part comes: finances. First, try not to spend your time around properties that will probably exceed your budget. The financing part is extremely important when buying a property so really think on it in order to avoid unexpected costs. Besides these general issues, there is a specific issue in Turkey which is the unexpectedly changing currency rates which has a high influence on property prices. And don’t forget that buying the property is just the beginning, you should also think about the maintenance costs of the property and yourself, during your time spent in Turkey.

Although it may differ according to the real estate agent you choose, the costs are generally are as follows:

· Money paid to real estate agents: Those agents give you advice on your desired property type, location and etc. and also a possible lawyer name that may help you to ensure all the paperwork is proper. Agents usually charge 3% commission payable from the buyer. This amount is on the price you pay for the property and it is usually charged at the end of the process.

· Money paid for the Lawyer: Again, it is important to mention that you better find one who does not work with the agency but for you. An experienced lawyer who will work for your best interests should also be able to speak and understand perfect English. You will need a lawyer especially for the Power of Attorney since you might not be in Turkey for a long time, until the whole process in completed. Usually the rates start from about 300 Euros. Do not forget to check with the lawyer the total amount you will pay for his services at the end of the process.

· Money paid for translation services: Many of your official documents (like passport) will require a Turkish translation. You need to make sure that you choose a good one, since all contracts will depend on your original (English language) documents.

· Deeds Transfer Tax: As explained in the Tax and Fees section, the buyer is entitled to pay half of 4 per cent that is calculated on the property’s price.

· Title Deed Registration Fee: It registers the title deed in your name (approximately 100 Euros.)

· Property tax: It is paid annually on the tax values of land and buildings at rates ranging from 0.1 to 0.3 percent. The tax is calculated based on the land and building’s facilities and the size in square meters.

· VAT: If a property’s net area is up to 150 square meters, then it is subjected to 1 percent VAT; if it is bigger than it is subjected to 18 percent VAT.

· Map Locality Search Tax: This is for the property to be registered and map referenced.

· Government Tax: This is the administration cost to the government for military checks. Military checks are made for the property in order to determine whether it is within the military restricted zone or not.

· DASK Insurance: It is the compulsory earthquake insurance that began in 2000.Once the property is registered for your name; you should pay this amount each year which is approximately 40 Euros.

· Home Insurance: If you choose to have one, you should expect to pay an amount of 115 Euros yearly, depending on the size of the property and insurance type.

You should also consider property maintenance costs like electric, gas, water fees, cleaner fees, TV/Cable/Satellite TV fees, Internet access fees, gardener fees (depending on the house you choose), and house repair costs.

As explained in “Taxes and Fees” section, when selling the property , you have to pay the Capital Gains Tax. If you buy and sell a house within the 5 years period, you are subject to pay this tax called the “Capital Gains Tax”. Let’s say you bought a house and within this timeframe (less than 5 years) your house gained value. When you sell your property to make profit, the Turkish state wants to cut taxes on your gain. Per the regulations of 2007, Capital Gains Tax is not cut for the properties that were bought before 2007 and sold after 5 years, which is 2012. Also, it is important to note that you may pay this tax ONLY in Turkey, not in your home country.

Many overseas buyers do not take into consideration all these costs and thus pay more money than they expected. Be prepared and have a good understating of your costs when buying a property in Turkey.