Factors to Consider When Buying Real Estate in Turkey
Real estate investment in Turkey is increasingly popular for both Turkish citizens and foreigners. While the process of paying the sale price may seem like a simple transaction, it involves detailed research and several steps. Given that thousands of property-related lawsuits are filed in Turkish courts every year, this subject is of great importance.
There are key rules to follow when purchasing real estate for investment or residential purposes. Both parties must be very careful to avoid problems before and after the sale. Legal support from an expert lawyer is crucial for ensuring the process is handled smoothly.
In this article, we will discuss the key points to pay attention to during real estate transactions. You can contact us for more detailed information and professional support from our team of expert lawyers with years of experience since 2002.
1. What Should Be Checked in the Title Deed Records When Purchasing Real Estate?
Before purchasing a property, title deed records must be reviewed. Having professional checks on these records will help avoid unexpected issues after the purchase. The Turkish legal system ensures the accuracy of title deed records under the principle of "Trust in the Land Registry." Therefore, examining the records in the relevant land registry office is one of the most important steps when buying property.
So, what should be checked in the title deed records?
a. Identifying the Real Owner of the Property:
In Turkish law, the real owner of a property is called the "malik" (owner). It is important to verify if the person selling the property is the actual owner or authorized by power of attorney to do so.
b. Checking for Liens, Precautionary Measures, Mortgages, and Sale Restrictions:
Although the existence of liens, mortgages, or other restrictions does not prevent a sale, they are transferred to the new buyer. The buyer must accept these restrictions and their consequences.
b.1 What Happens If a Property with Liens or Mortgages is Purchased?
If a property has a lien or mortgage, the new buyer accepts responsibility for the restrictions and the consequences, including the risk of losing the property.
b.2 Can Properties with Public Liens be Purchased?
Public institutions such as municipalities or tax authorities cannot transfer properties with public liens until the lien is lifted. Official approval from the relevant public institution is required for the sale of such a property.
c. Confirming that the Property Matches the One Shown in the Title Deed:
This verification can be done through the title deed examination, where you can compare the address of the property with the registered information and ensure it is the correct one.
2. What Should Be Checked in the Municipality Records When Purchasing Real Estate?
Municipality records should be carefully reviewed to avoid any legal issues and unexpected consequences for the new homeowner. Factors such as the property’s history, zoning status, occupancy permits, and any property tax debts should be checked. This information can also help determine the property's actual market value.
3. What is the Title Deed Tax? How is the Tax Calculated?
The title deed tax is calculated as 4% of the sale price indicated in the title deed, with 2% for both the buyer and the seller.
3.1 Who Pays the Title Deed Tax?
The title deed tax is generally 2% for both the buyer and the seller, but the parties can agree to a different arrangement.
3.2 What Happens if the Sale Price is Underreported in the Title Deed?
Underreporting the sale price can result in severe penalties. The tax office may impose fines, including a 25% penalty on the unpaid tax.
4. What is the Difference Between “Kat İrtifakı” and “Kat Mülkiyeti”?
“Kat İrtifakı” (building rights) applies to properties where construction is not yet completed, while “Kat Mülkiyeti” (property ownership) applies to completed properties. Be sure to check the status of these documents.
5. What is a Building Permit, and Why Is It Important When Purchasing Real Estate?
A building permit is a crucial document that outlines the details of a property’s design and construction. This permit must be obtained before purchasing, particularly in cases of new developments.
6. How Can Foreigners Obtain a Residence Permit by Buying Property in Turkey?
Foreigners who purchase property that meets specific criteria are eligible to apply for a residence permit. However, the property must not be co-owned and must be used as a residence.
7. How Can Foreigners Obtain Citizenship by Buying Property in Turkey?
Foreign nationals who purchase a property worth at least $400,000 (or equivalent) can apply for Turkish citizenship. After approval from the Ministry of Environment and Urbanization, a "three-year non-sale" restriction is added to the title deed.
8. Can a Property with a Tenant Be Purchased?
When buying a property with an existing tenant, the rental agreement between the tenant and the previous owner is transferred to the new owner. The process should be handled carefully, especially if the property is purchased for personal use.
Other Factors to Consider When Purchasing Real Estate
Location: Ensure the property is near important amenities like work, schools, shopping, hospitals, and public transportation.
Building Age and Condition: The age and maintenance requirements of the building should be considered, as older buildings might need renovation.
Safety and Security: Research the safety of the neighborhood and available security systems.
Neighborhood Relations: Consider social dynamics, noise levels, and neighbors' lifestyles.
Property Condition: Inspect the property's infrastructure, including plumbing, electrical systems, windows, and walls.
Amenities and Social Spaces: Check for extras like a swimming pool, gym, or parking space.
Price and Financing: Compare prices with similar properties and evaluate financing options to stay within budget.
Occupancy Status: Ensure the property has an occupancy permit to avoid legal complications.
By carefully considering these factors, you can make a well-informed and secure property purchase.