Buyer Guide Turkey
VIEWING & RESERVATION PROCESS
On the Luxin Properties Turkey website, there are hundreds of properties available. Your needs with regard to lifestyle, family size, finances, and proximity to facilities, to name a few, will be taken into consideration by the sales specialists at Luxin Properties Turkey as they help you find the appropriate home in Turkey. Once we have found the right development, you will choose a specific unit and pay a reservation fee to the builder of approximately $1,000 USD or 1% of the purchase price (this could take 3–4 days). Major credit cards are accepted by the majority of developers, and under Turkish law, this reservation cost is also refundable for up to 14 days.
ACQUIRING A TAX ID
The initial steps of continuing with your purchase will then be completed. We will start by helping you get a Turkish Tax ID. (This process is quick and simple. Only a passport, home address, a phone number in another country, and your parents’ names are needed to complete)
OPENING A BANK ACCOUNT
In order to open a local account in your name, we will then take you to a bank of your choosing. (Side Note: The only services we provide for the procedure are transportation and translation. We are never given access to any account information. To make the switchover less difficult to manage, your monthly utilities will be automatically deducted from this account. The rental revenue will also be added to this account if you are purchasing as an investor.
COMPLIANCE
It would be beneficial to ask any questions you may have regarding the process at this time, gather the costs and the payment plan, and highlight any obstacles you may be facing. If the purchase is for the Turkish Citizenship by Investment program, we will meet with the lawyer of your choice. If you haven’t previously retained an attorney prior to our appointment, we will arrange a meeting with one of our partner attorneys to go over the procedure and timeline. While you’re there, the attorney will go over your requirements and the procedures from making the reservation to paying the last installment. (Our list of required paperwork can be found on the Citizenship by Investment tab.)
POWER OF ATTORNEY
The next step is to issue a Power of Attorney (POA), which takes one day. This step is crucial if you do not wish to remain in Turkey throughout the purchasing process. With the POA, your lawyer can represent you in all necessary purchase and immigration transactions, such as signing the Purchase Agreement, registering the Title Deed, and submitting residency and citizenship applications for you and your family members. For family applications, a separate POA is required for your spouse’s immigration application. The POA can be issued by Turkish embassies worldwide or by Turkish public notaries.
EVALUATION REPORT
Once the POA is finalized and the agreements have been reviewed and signed, the lawyer will request an Evaluation Report for your records. This report typically takes 3–4 days to prepare and costs 1,250 TL. After signing the agreements, you must order the Evaluation Report. The entire process costs approximately 10,000 TL and takes 3–4 days to complete. Please note that we are not involved in these assessments and have no control over the results. This report will inform you of any issues identified during the process, along with geographical comparisons, market value, permit, and construction details.
Only after these steps are completed can you return home and transfer the remaining balance from your local bank.
If you are applying for citizenship through investment, the account must be solely in your name. Any additional account holders will be considered property shareholders, increasing the required investment for citizenship.
ONE-TIME EXPENSES FOR PURCHASING REAL ESTATE IN TURKEY
While not always the case, the buyer and the developer typically share the 4% Title Deed transfer tax. This tax is paid once the unit is completed and transferred to the owner’s possession. However, some units require immediate payment to expedite the issuance of the title deed, especially for those applying for Turkish Citizenship by Investment.
In Turkey, VAT ranges from 1% to 20%.
Additionally, a natural disaster insurance policy, known as DASK, is required. This policy includes gas, electricity, and water utilities. There are also initial setup costs and deposits that must be paid to the respective utility companies.
ANNUAL & MONTHLY COSTS OF BUYING PROPERTY IN TURKEY
Turkey imposes an annual property tax on all real estate, which ranges from 0.1% to 0.6% based on the type and location of the property. For instance, owning an apartment in Istanbul incurs a higher city tax rate of 2% of the property’s value.
The value is determined by the municipal council using a notional value as a baseline, though the market value is typically higher. Property tax returns are filed every four years. The tax amount is calculated based on the plot’s square footage and available amenities. Fees are doubled for properties in major cities like Istanbul. Property tax is paid to local governments yearly in two installments. The second installment, due in November, can be paid in full along with the first one, due from March through May. Payments can be made in cash, by check, online, at banks, or at the local municipality. Late payments incur a monthly penalty of approximately 2.5% of the tax.
PROPERTY MAINTENANCE FEES
Although the cost of property maintenance varies from development to development (If rented, the tenant will assume the payment of these fees). For more information on expected annual costs of property maintenance, please contact to our team.
INCOME TAX ON TURKISH HOMES
All homeowners in Turkey are required to pay income taxes, which are deducted from their take-home pay. Rental income can be calculated using either the lump sum method or the actual deduction method. The actual deduction method involves subtracting expenses related to rental income, such as lighting, water, insurance, and depreciation. When using the lump sum method, taxpayers must deduct 25% of their gross income to determine their taxable income.