Foreign ownership in Turkey is ruled by the reciprocity principle.
Citizens of countries that allow Turkish citizens or legal entities to own property in their country are allowed to acquire property in Turkey. GlobalpropertyGuide.com notes citizens of most EU countries, including Britons, can freely purchase properties in Turkey. Foreign nationals also face restrictions on acquiring properties within municipal areas with less than 2,000 registered inhabitants (article 87 of Village Act). Foreigners are also not allowed to purchase properties in the confines of military zones (Military Prohibited and Security Areas Act). Foreigners are allowed to acquire a maximum of 30 hectares (74 acres) of real estate. Any piece of land exceeding 30 hectares requires a permit from the Turkish authorities.
A 10 to 25 per cent deposit is needed during the initial stage of property acquisition, upon signing of the purchase contract. Permission for sale needs to be acquired by sending the deeds of property and passport translations of the buyer to the local Army Headquarters for approval. The permission for sale usually takes six to eight weeks to secure. Once the permission of sale is secured, the transfer of title of deed (TAP) is undertaken at the local Land Registry Office. Having a solicitor enact the conveyancing is not a legal requirement, but it is highly recommended. Notarisation of all property sales to foreign nationals by a government-authorised interpreter is, however, a legal requirement. Moreover, both contracting parties (seller and buyer) are required to be present at the entry of title.
The whole process of registering property in Turkey takes nine days to finish. The Turkish government, in turn, takes three to nine months to process the application and release the title deeds for transfer. You are advised to hire and lawyer to look after your interests. See the Law Society website at www.lawsociety.org.uk for a list of international solicitors in the UK with experience of property law in Turkey.
Allow 4.6 to 5.5 per cent of the purchase price for purchase taxes and fees.
Registration and notary fees
Title deed charge
Capital Gains Tax (CGT) is nil in Turkey after five years’ ownership. Prior to that term, normal income tax rules apply with an allowance of YTL6,800 (approx £3,000). If you are a UK resident for tax purposes you will be liable to pay CGT in the UK too at the rate at which you pay income tax.
Mortgage broker Conti provides 75 per cent LTV mortgages over a maximum term of 20 years. The minimum loan amount is £20,000. Repayment only mortgages are available.
Property title for foreigners has been contentious in recent years, although it seems to have been satisfactorily resolved since legal amendments enacted in April 2008.
Turkey is not a member of the EU, and while GDP is growing and the country is modernizing rapidly it does not enjoy the robust structures of Western democracies.
Investment Potential: Capital Appreciation
Property prices increased by double digits and higher annually during the middle-noughties. Starting from a low price point - £25,000 for an apartment in many coastal resorts – they have not been as susceptible to the large price crashes seen elsewhere, but there has been a knock-on effect that has impacted the local market. Still, Turkey offers opportunities, particularly in high local population growth areas, such as Istanbul.
Investment Potential: Rental Yield
Most Brits head for the south west and south coasts of Turkey.
Resorts strung out along the coast include Fetiyhe, Kusadasi, Yalikavak and Altinkum, each well located for the main tourist airport at Dalaman, approximately 60 to 90 minutes away by car. The opposite direction lies Kalkan, a pretty town with a natural harbour and mountain backdrop, which prohibits too much future development from taking place. Approximately 90 minutes east of Antalya airport is the town of Alanya, set around a headland the splits two golden sand beaches. The majority of property available to purchase in the resorts is new build apartments and villas, but traditional stone houses are a feature too, especially outside the main resorts.
In the region of one million Britons take a holiday in Turkey annually, a figure that has grown year-on-year over the last decade. Approximately 73,000 Britons are registered as having bought locally.