Turkey Buyers Guide..

Providing the title and the other searches are successful, you should then open a

local bank account and register with the local tax office. A preliminary contract is

then drawn up, committing you to the purchase, and you will be required to pay a

deposit, which could range from ten to 30 per cent.

The TAPU office will need to see proof of identification and a copy of the deeds.

They will then make an application on your behalf, which includes a check of your

suitability and ensures that the property is not in a military sensitive zone or

prohibited area.

Once clearance has been given, both the property buyer and seller sign a final

contract, the balance is paid and your title is registered.

Legal issues

The biggest issues facing the Turkish property market are problems securing title

and undervaluing (see new-build versus resale). Buyers whose purchase was

taking place between June 2005 and January 2006 may also have had some

problems while a newly drafted property law was sent back to Parliament for

redrafting. During this time all sales to foreigners were frozen, and as a result there

is a backlog of applications which are waiting for military approval – which could

ultimately delay your buying process by anything up to six months.

There is light at the end of the tunnel however, as experts believe that the need for

military approval will be removed sooner rather than later – as that will be a clause

for successful EU entry. This would simplify, not to mention speed up, the entire

buying process.

As well as getting your lawyer to check the title thoroughly, also ensure that they

examine the location of your property. Land surrounding your home could be subject

to a change of use, or even have planning permission, which may alter your views

and the general outlook of the property altogether.

Financing property purchases

The easiest, and most cost effective, way to buy property in Turkey is with cash. If

this is not an option then seriously consider raising the finance by releasing equity

in your own home, as this also saves time and hassle. UK banks do currently not

lend on Turkish property, so if you can’t raise the capital in the UK by any other

means then your only other option will be to get a Turkish mortgage.

However, in order to be eligible for a Turkish mortgage, you must be resident in

Turkey. All Turkish mortgages are arranged on a repayment basis – there is no

such thing as an interest-only loan. You will also need a 30 per cent deposit, as the

maximum loan-to-value lent by Turkish banks in 70 per cent. Also be aware that

the term of a local mortgage will be over 15 years, 25-year loans are unheard of,

and that there is likely to be a minimum loan amount of around £20,000. The good

news is that you will probably be able to secure a fixed-rate deal for the entire length

of the loan.

Turkish property: Fees and taxes

When buying property in Turkey, allow roughly ten per cent of the purchase price

for associated costs. This breaks down into estate agents fees of around three per

cent, stamp duty of 1.5 per cent and legal fees of up to five per cent. If you are

buying from another individual, you may also be liable for property transfer tax at

1.5 per cent. In addition, you must budget for land registration fees, notary fees

and any translation services.

When you have completed, you will also need to arrange earthquake insurance in

addition to buildings and contents. There is also an annual property tax and local

environmental tax. Bear in mind that if you are planning to rent your property out

you will have to pay income tax on any profits.

If you are selling a Turkish property that you have owned for less than five years

then you will be liable for capital gains tax. If, however, you sell it after this period

then you will be exempt. Inheritance tax ranges from one to 30 per cent, depending

on the size of gift left.

Visas, residency and work permits

British citizens need a visa to enter Turkey. You can buy this once you have landed

for a fee of £10, and it is then valid for multiple entries for a period of up to three

months. Many people who want to stay for longer than three months simply leave

Turkey and then re-enter on a new visa. This is particularly easy if you live in a

coastal resort such as Bodrum, as you can simply go on a day trip to one of the

Greek islands.

If you are wishing to reside on a more permanent basis however, it may be worth

applying for a residence permit. You can do this at the foreigners section of your

local police station, and it will take anything from two to eight weeks.

If you wish to work in Turkey, your employer will have to apply for a work permit

which can be a lengthy process. If you are thinking of working for yourself once out

there, then you must set up a Turkish Limited Company which can only be done

through a local solicitor.

New-build versus resale properties in Turkey

There is a great deal of new-build property in Turkey, from one-bedroom apartments

to six-bedroom villas. However, as tends to be the nature of new-builds today, most

of this will be sold off plan. It is important that you buy off a reputable developer,

as estate agents are a dime a dozen in Turkey, and there are many horror stories

of people buying a property that has also been sold to someone else. There are

enough good firms around though, and buying off plan may enable you to secure

a home at a competitive price.

If you are buying a resale property, get an independent lawyer to check out the title

deeds before signing anything – or handing over a deposit. There has been much

confusion over title in Turkey, so you can never be too careful. Also, make sure that

the agreed price is mentioned in all official documentation, as sellers may try to list

a lower selling price to avoid tax. Do not agree to this – not only are there legal

ramifications, but when the time comes to sell, if you can’t find a buyer willing to

do the same thing, you may be hit with a tax bill on an amount that is larger than

the profit you have actually made.

Property in Turkey: Investment potential

Buying in any country purely for investment always comes with its risks, and Turkey

is certainly no exception. There are, however, some factors which may contribute

to higher capital growth than other destinations.

The prospect of Turkey joining the European Union is an issue which always arises

when discussing Turkish investment potential. The truth is that, while Turkey has

been an official candidate for EU membership since 1999, there is no sign on the

immediate horizon of this becoming a reality. That’s not to say that it won’t come

to fruition – but experts who are willing to put their predictions on the line state that

the earliest this is likely to happen is 2015.

The other factor affecting house prices is flights. Turkey is not on any cheap air

routes, and currently there are no direct flights to southern Turkey during the winter.

Many British owners are currently campaigning against this, as it limits their rental

season – as well as their own enjoyment. It is possible to change at Istanbul, but

this can considerably lengthen the average three and a half hour flight time.

Health and education

While you don’t need to have any particular vaccinations before you enter Turkey,

it is absolutely essential that you have private health insurance as there is currently

no reciprocal agreement with the UK. Most cities and tourist resorts have private

hospitals in which the standard of care is believed to be very good. Do, however,

be aware that the Turkish ambulance system doesn’t have such a positive

reputation, and taxi is often believed to be the quickest route to the hospital.

Much like in the UK, the Turkish education system is divided into preschool, primary

and secondary schools. British children are entitled to enter the state system, but

facilities do tend to be much better at either international or private schools.

Unfortunately, international schools can only be found in large cities. A child entering

the Turkish education system will need a student visa unless they are the legal

dependent of someone with a work visa.

Transport

British Airways and Turkish Airlines are among a number of carriers that offer direct

flights to Turkey’s major airports on a frequent basis. During the summer months

several charter airlines such as Cosmos and Thomas Cook Airlines fly to the

southern tourist destinations, but these tend to be limited to fixed term return dates.

Once in Turkey, be aware that public transport is pretty thin on the ground – although

there are more buses in busy tourist resorts than elsewhere. Taxi’s however tend

to be reasonably priced and in plentiful supply. If you are planning to do a fair

amount of sightseeing then your best bet is probably to hire a car – which can be

an economical decision, especially when travelling with a group.

And finally…

As with any property investment you should think clearly before investing in a

Turkish home. There are things to consider carefully before parting with any money:

is the title clear? Is the property built to earthquake specifications? Is the estate

agent registered?

Generally these are questions that only your solicitor can answer, so make sure

that you get an independent lawyer who is acting solely on your behalf. The same

should be said for financial advice as, despite low property prices, this is still a large

investment. A small outgoing now could save you thousands in the future. Ultimately,

do your research before committing to any property purchase..