In Turkey, for foreigners came into force new rules for the sale of real estate. We understand
What additional conditions are introduced for foreigners in real estate transactions? How will innovation affect the Turkish real estate market? Will housing more expensive? About this in our material.
Sergey VolchenkovAbout the author: Sergey Volchenkov, director of the Turkish real estate and construction company Tolerance-Homes
New rules entered into force March 4, 2019. They are described in more detail in Circular No. 1795. In particular, we are talking about the mandatory receipt of expert assessment of Turkish real estate, which a foreign citizen intends to buy or sell.
New rules – new tax policy
The introduction of the new rules of the game will allow the state to bring the Turkish real estate market in line with international norms and rules, and also to collect statistics on the real cost of housing in each district. The latter will provide an opportunity to more correctly apply tax policy and receive additional revenues to the budget.
Before Circular No. 1795 entered into force, a tapa (certificate of title to real estate in Turkey) indicated an underestimated value of the property, with which the purchase tax was paid. Now, when you make a property, a foreign citizen should receive an expert report with the actual cost of housing indicated in it. And already on the basis of this amount to pay tax on the registration of property rights.
Dictionary of the buyer of real estate in Turkey. What does tapu mean, iskan, idat, ikamet
At the moment, the tax is temporarily reduced to 3% of the value of real estate, and this rate will be valid until the end of March 2019. From April it will be 4%.
Also, there is a tax on profits for developers and owners of secondary real estate, who have been its owners for less than five years. It is 20% of the difference between the purchase price and the sale price. According to the laws of Turkey, only after five years of ownership of real estate, its owner is exempt from this tax.
For example, a person bought an apartment in Turkey and showed a reduced cost of 100 thousand lire. Two years later I decided to sell my property. He receives an expert assessment of an accredited company (today an assessment is also required when selling an apartment) that the cost of an apartment is 300 thousand lire. Now the object must be sold for this price, and it is this amount that is indicated in the tapa. There was a documentary difference between the purchase price and the sale price of 200 thousand lire. Nevertheless, the seller must pay income tax from this difference in the amount of 20% – in this case 40 thousand lire.
If the examination indicated a cost higher than that for which the landlord is really ready to sell the apartment, then he can specify the lower price he needs in tapu, but the tax must still be paid with the difference with the amount of expert evaluation. Also, the seller must be prepared for possible tax audits.
Of course, the state is well aware of what the rules of the game were in the market before, and experts expect that it will not be so scrupulous in checking transactions. But in fact, no one knows how it will be in reality.
Foreign citizen – not one soldier in the field
Now a foreign citizen who has decided to buy or sell real estate in Turkey will not be left alone with an unfamiliar Turkish system, with unscrupulous realtors or developers. He will have an expert report with all the characteristics of the acquired object.
Valuation is issued by licensed companies of the Agency for Banking Regulation and Supervision (BDDK), as well as the Capital Markets Council (SPK).
Examination is paid. Its cost depends on the area where the real estate is located and the fees of the municipality when issuing documents to experts. Today it averages 1 thousand lira, including VAT.
The examination must be paid and carried out prior to the submission of documents for the execution of a tapa. Who should pay for this expertise, the law does not regulate, and so far it is left to the agreement of the parties. However, it is necessary to take into account that traditionally the additional costs associated with the purchase of real estate in many regions are borne by the buyer, therefore, the examination fee can also be charged to him.
Validity of the report – three months from the date of issue.
The evaluation will contain the following information:
cadastral data of the land on which the property is located;
the area of land that belongs to the new owner (proportional to the size of the acquired housing);
type of object;
the presence / absence of the act of putting the house in which the object is located, into operation (search) and permission to use the property or its independent part;
the estimated value of the property specified in lira. If the object has not yet been built, its future value will be indicated in the expert report, that is, the price at the time when the object is completed;
object plan and its area;
the presence / absence of all possible types of encumbrance of this property;
a description of the area in which the object is acquired, to determine its future liquidity, etc.
Prices in lira will rise