Turkey has become remarkable as a country with a developing economy and various investment areas. One of these promising investment areas in Turkey is real estate investment. For that reason, Turkey attracts investors all around the world. What is the cost of buying property in Turkey is the most important question in the minds of Turkish or foreign real estate investors.
In this article, as Realty Group, we will explain the answer to this question in detail. Because there are significant factors to be considered in the process of buying real estate whether for investing or residing in. So, what should be considered when buying a house? What expenses are awaiting you? To which authorities should we pay these expenses? What are the costs of buying and selling property in Turkey?
What are the Property Expenses?
Some expenses are paid for transactions to be made during housing, office, and land purchases in Turkey. What payments will a person who will buy real estate in 2021 make?
1. Stamp Duty
Stamp duty is an official type of tax levied by the government for all contracts. It means the completion of agreements or transactions between persons and companies. Those who will pay the stamp duty are the people who sign the papers. 2021 stamp duty expenses and printed costs are determined by the government in Turkey. Papers subject to stamp duty, such as real estate sales contracts, can be viewed in the General Communique published in the Turkish Official Gazette.
2. Legal Fees
According to Turkish Laws, real estate sale contracts have certain legal regulations. That is why you should be aware of the fees and expenses before making a real estate investment in Turkey. We will explain some of the costs that you will encounter during this process.
For instance, title deed fee. The payment of the title deed fee is equally made by the buyer and the seller. In other words, 2% of the title deed fee is applied as 4% is paid by the buyer and 2% by the seller. You should also know that the buyer might pay in full. You can learn the title deed fee on the e-Government Land Registry and Cadastre Office page. When buying a house, the title deed revolving fund fee should also be paid. This amount is determined by the relevant authorities every year. The fees of the title deed (TAPU in Turkish) transition for the new owner equal 60 USD.
An evaluation report shows the actual value of the property, and it is mandatory before transferring the title deed under the name of foreign investors. In addition, the value of the property cannot be less than the tax value. The cost of the real estate evaluation documented by the Capital Market Authority is 220 USD.
Fees of property ownership transition request (should be paid to the related office connected to the lands and commercial registration sector) equals 100 USD.
3. Real Estate Agent Fee
Real estate agent fee is another important factor to consider for the costs of purchasing a property in Turkey. You can get consultancy and service from real estate agents to make property investments in Turkey. Before you find the right agency, you should know about the commission rates of companies and firms while real estate agents work on commissions. Even if you directly buy a brand-new from the developer, you might not pay any title fees nor commission.
4. Notary and Translator Fees
If you are a foreigner who thinks of buying a house in Turkey, you may need translation for the official process. Foreigners buying a house should submit a translated photocopy of their passports from a notary. Translated and notarized copy of the passport in the Turkish language costs 50 USD. However, translation fees may vary depending on the language being translated.
In order to get the best price, it would be the most logical decision to contact translation offices and compare the prices. Legal translation fees cost approximately 80 USD. You also need to know the passport translation fees in Turkey. Furthermore, it is obligatory to have a sworn judicial translator on the day of getting the title deed of your property.
5. Property Tax
Property tax is an outcome of being a property owner. Therefore, in any case, the owner of the property must pay the property tax. Every homeowner is subject to property tax which is calculated on the value of the home. It is mandatory to pay this tax every year one year after the purchase of the house. Property ownership taxes for the Turkish government: 4% of the price registered in the municipality and only paid once.
6. Earthquake Insurance (DASK/ TCIP)
The Turkish government requires the purchase of a yearly insurance policy against earthquakes. The price changes based on the size and age of the property. A Compulsory Earthquake Insurance is also required during the title deed transfer when buying property in Turkey. This insurance should be renewed every year and the buyer is required to have this mandatory insurance when buying a house. The insurance costs about 0.1 USD/ m².
Necessary information and required documents for DASK are as follows;
- Tax ID number
- Personal phone number
- Full address of your property
- The construction year of your property
- The number of floors of your property
- Name and surname of the buyers
7. Utility Renaming and Connection
Another important thing that will cost you for new buildings and houses is the issue of utilities. Electricity, natural gas, water, and the internet are the most necessary needs in our current world. It is necessary to make these connections for a new flat or villa in Turkey. Each subscription costs approximately 10.08 USD. The person who buys the house is obliged to purchase these utilities for their properties. Besides, the costs of the subscriptions are not concluded the purchase price of a house.
It would be best for you to talk to your real estate agency or developer company about this before purchasing your home. So, you will know all of the costs that will come your way. Subscription charges and necessary documents must be individually submitted to the relevant authorities. Here are the necessary documents for the subscriptions of electricity, water, gas, and internet;
- DASK / TCIP
- A copy of your title deed
- Occupancy permit
- Tax ID number
- The original and the copy of the passport
- Phone number
- Full address of your property
- Residence permit document
- Personal phone number
Just in case, it will be to your advantage to have these documents ready.
8. VAT (Value Added Tax)
In Article 13-i of the Value Added Tax Law (VAT), in the first delivery of residences or workplaces, foreign real persons who do not reside in Turkey, are exempt from tax (provided that the other conditions in the Law are fulfilled). VAT rates in Turkey vary between 1% and 18%. In real estate purchases, it is generally 18%. However, as we said above, the investors can benefit from VAT exemption if they meet the conditions specified in the law. VAT (Value Added Tax) for real estate is 1% for units having areas less than 150 m². For areas above the mentioned number or commercial units, the VAT is 18% and paid once.
What are the Property Taxes in Turkey?
The property tax rates vary from year to year in Turkey.
In line with the calculation made by considering the values of the year 2020, the property tax rate is currently 4.55% in 2021. Based on half of the valuation rate of 2020, the amount of 4.55 was fixed with the increase to be made on this rate. So that, it is very important to keep the information up to date. As Realty Group, we will ease your home purchasing process by providing the most up-to-date information.
What are the Examples of the Cost of Buying Property in Turkey?
We have briefly explained the costs that a foreign citizen will meet after buying property in Turkey. Foreigners can buy houses in Turkey after getting the required permissions and fulfilling all the necessary procedures. It is very easy to successfully complete these procedures through real estate agencies. For more information, you can always take advantage of the Realty Group consultancy service.
Which Regions in Turkey are the Best for Buying Property?
Almost every region of Turkey is available to purchase property for investment or residential purposes.
Foreign citizens generally prefer to buy a house in Istanbul. Because Istanbul is a very advantageous metropolitan thanks to its geopolitical position. Investors from all over the world place this city among their first choices due to providing easy access. By linking the eastside and westside of Turkey, Istanbul offers many innovations to people who want to move their business or home to Turkey. You can be sure that you will be able to discover several villas, residences, or offices in the city center or close to the sea. Moreover, a wide price range will be waiting for the home buyers.
While the counties of Istanbul such as Esenyurt, Beylikduzu, Levent, and Kadikoy come to the fore, other coastal cities in Turkey also become very popular day by day. Yalova, Izmir, Antalya, Samsun, Bursa, and Mugla are among the prominent coastal cities in Turkey. There are also many housing projects in the cities of Ankara and Eskisehir, which are located in the middle of Turkey. Our the best cities to live in Turkey article will help you to get more details about the costs and expenses of buying property in Turkey. As Realty Group, we are glad to be with you in this process of home buying.