Real Estate in Turkey

Buying Property In Turkey

First Published Date: Feb 16, 2010

Ownership of the real estate in Turkey, comes under the reciprocity principle for a foreign individual. Those countries which allow the Turkish citizens or legal entities to own property in their country, only their citizens are allowed to purchase real estate in Turkey. Those countries are the United States, Canada, Latin America, Africa and most of countries in Europe.

The price for the real estate has increased after the relaxation in the ownership restrictions for the foreigners under the Law No. 5444. a foreigner can purchase a maximum of 30 hectares (74 acres) of real estate in Turkey. More than 73,000 foreigners have bought real estate in Turkey. Buyers who are mostly from England, Germany and Greece have poured US$10.4 billion into the real estate market over five years (2002-2007). The foreign buyer has no restrictions to buy 10% of property and land in officially zoned areas like cities, resorts and towns etc. Ownership of real estate in Turkey, is prohibited for foreigner in the rural areas and also the immediate vicinity of a military zone.

There are many rules and regulations to be followed by the foreigner investor and the process become little tricky to handle. A lot of real estate agents, brokers and also property advisors are available to guide their customers. A real estate agent normally charges 3% from the buyer and 3% from the seller so the total of that becomes 6% of the whole amount. The registration process takes around nine days to finish. The “title deed of transfer” is released in about three to nine months, after the application is processed to the court. The registration and notary fees, title deed charges, and including the agent’s commission is paid by the buyer and the seller is suppose to pay the stamp duty fee along with the commission of the agent. The roundtrip transaction cost around 9.85% = 10.75 % and it also include the fees of the lawyer, notary public, registration, taxes and agents’ fees. The real estate in Turkey is subject to a change of price after one year, five years and ten years according to the latest available data or house price index, inflation is not adjusted here. As for the annual percentage, change in the house price or index from (2005-2006) or the latest data available on the price index upon yearly basis. After five years the annual percentage change in house price index and house prize is from 2001-2006 and then the price change after every ten year is from the index 1996. A landlord can expect gross annual rental income which is expressed as a percentage of price of purchase of the property.

It is highly recommended to have a solicitor to do the conveyancing, though legally there is no such requirement. For buyers of the real estate in Turkey, the government authorises an interpreter for the notarization of the property. The buyer and the seller’s presence is mandatory at the entry of the title. The economic recession has hit hard the Turkey’s exports manufacturing sectors and the logistic market is badly affected. This has resulted into the real estate in Turkey slowed down in the line with the rest of world. The consumer confidence is again picking up and retail turn over is growing although the growth rate is slower than the last year. Most of the buyers or occupiers of Turkish real estate are re-locating themselves mostly on the less expensive locations like Asian side of Istanbul.

To streamline and minimize blog maintenance, I will be discontinuing maintaining the realestateexpedition.com website (however, I will still hold the domain). I will gradually move all articles from this site to A Dawn Journal. This article originally published on the above website on Feb 13, 2010.