You might want to consider buying an overseas property if you’re planning to have a holiday home, retiring to sunnier climes, or -an increasing trend- buying your first property in Turkey simply because you can’t afford to buy in your home country. But when speaking of buying a property in another country lots of questions will spring to your mind. Such as; What are the pitfalls and advice when buying property in Turkey?
Find a Reliable Independent Property Lawyer
Obviously, you would have to do a lot of research to get the correct answer to this question. Also, before you transfer your money to real estate investment, which is considered a relatively large investment, take some time. It should be your top priority to make sure that your investment will be legally valid. This is a time-consuming process and most of the time the validity of your resources would be doubtful. To shorten this step search for a reliable legal consultancy. Thus, the first step you should take is to consult an independent property lawyer on the regulations of Turkey and find out whether the plan seems feasible for you.
Here, we are presenting the key pitfalls to consider when buying property in Turkey to safeguard your investment.
Foreign Ownership Laws
Buying property in Turkey is regulated by Law of Title Deed, Cadastral Law and Civil Code, and Condominium Law. Unless stipulated by international agreements and other special laws, The Republic of Turkey allows Foreign investors to make investments in Turkey. However, they can do this by complying with certain rules of law, legal procedures, and paperwork.
Following the Legal Steps and Paperwork
A foreign citizen must submit an application along with some documents before buying property in Turkey. This application is done together with the seller, to the local Land Registry Office where the property is located. The purchase transaction has two steps accompanied by many documents. The first step is the pre-sale approval from the Land Registry Office. The second step is the signing of the documents for buying at a notary.
The two-step procedure sounds pretty easy to the ears. However, this is one of main the pitfalls. To follow, read and prepare a contract and all the conveyancing documents in the other language is not easy. If you’re not confident in the local language to handle these you need to hire a professional who speaks both the local and your language. It is recommended to hire an English speaking independent property lawyer who can help you to cover all the paperwork and pitfalls before buying real estate overseas. The lawyer will help you with simplifying the legal jargon as well as act in your interest.
Non-citizen Ownership
Very few nations around the world do not allow non-citizen ownership of properties. Luckily the Republic of Turkey is not one of them. Non-citizen foreign people can buy property in Turkey thanks to the amendments made to the Land Registry Law in 2002.
Reciprocity Principle
In the past, certain foreign people around the world were unable to buy properties in Turkey. Because their government didn’t allow Turkish nationals to buy properties in those countries. The Republic of Turkey changed the reciprocity principle in the law in 2012. Now, all persons with a foreign nationality can buy property in Turkey.
Area Limitations when Buying Property in Turkey
Foreign nationals can buy a total of no more than 30 hectares of property in Turkey and may obtain a restricted right of rem. Foreign nationals can buy property in Turkey up to 10% of the total area of that district or town.
Strategic Zones
The foreigners are not permitted to buy land or property in or close to military zones, security zones, or other strategic zones. They need to get a special permit from the Turkish authorities which state that the requested land or property is not within or close to such zones.
National Interests
You also should be mindful of the fact that the Council of Ministers might limit or even forbid your purchase if there are national interests related to the land or property. Your independent property lawyer will search any possible pitfalls on this matter.
History of the Property and the Seller
Let’s say you found the property that you want to buy. Now, you are going to finalize the transaction of buying/selling in front of a notary. Yes, a notary has the power to transfer deeds of a property. In order to do this, the notary identifies correctly the seller and the buyer and approves if there is a power of attorney. However, a notary does not close the liens on the property or examine the legality of a property. If there are, the notary can do nothing until the buyer and the seller solves the conflicts.
So, a proficient independent property lawyer who can go to the registry or can verify the documents that are asked for from the seller and examine the history of the property can overcome such pitfalls from the beginning. This is called as due diligence.
Due Diligence
Due diligence helps you to avoid from many hidden pitfalls and from making a big financial mistake. How? By learning the history of the property and the seller when buying property in Turkey. This process resolves any possible pitfalls before completing the transaction.
The lawyer will be able to pick up secret pitfalls during the due diligence process and include all those critical information in the search report. These reports help prospective buyers protect their hard-earned money and guarantee greater peace of mind.
Some important aspects relevant to the due diligence when buying property in Turkey:
- Verifying the legal status of the property.
- Controlling if there are any loans, mortgages, liens, or other legal pitfalls that will impact your investment in the future years.
- Making sure that the property has been registered legally.
- Verifying the entitlement and asset are in the seller’s name and that appropriate assignment documents exist.
- Verifying construction licenses or any other licenses issued by the local authorities
- Checking whether the property tax has been paid. (Both the new and the previous owner are jointly and severally liable for the tax debt if the previous property taxes have not been paid.)
The terms of payment
Potential buyers with foreign nationality should not make any payments before obtaining information from the relevant Land Registry Office about the property concerned. Also, shouldn’t sign a legally binding purchase or payment agreement without supervision of their own lawyer.
Be aware that a much higher price may be offered to prospective foreign buyers in certain locations than would be offered to local buyers. To make sure you get a fair deal look at a lot of properties and compare the prices with other properties on the market in the same location.
Exchange Rates
Exchange rates are another important issue that must be kept in mind. Since even a small change to the exchange rate could drastically affect the value of your money. Think of any foreign property investment as a property investment in the currency of that country. You should time your purchase to meet advantageous exchange rates which can significantly increase your purchasing power.
Taxes and Fees
When buying property in Turkey or anywhere around the world, you are to pay tax at some point. You need to pay all the property taxes, fees, service charges, and many other costs involved with buying property in Turkey. It’s always beneficial to gather a preliminary information about local tax laws. You should be sure that you account for all the tax that you are liable to pay, both in your home country and in the country that you are going to buy-in.
Please note that, since 2017, for their first property purchases, foreigners are not required to pay Value Added Tax (VAT) when buying property in Turkey.
The Real Estate Agent
Do you really know the area where you’ll be buying property in Turkey? While one of the ways to know is to ask questions and do your own investigation, consulting a real estate agent is the clever way. Yet, you should be sure that the real estate agent who lists your property is legal and reputable. Plus, the agent has to have the knowledge and experience to assist you. Trusting and finding the right one can be a hassle. An expert independent property lawyer in Antalya can also offer you some on-point suggestions on such buying property in Turkey when buying property in Turkey. Never forget that the estate agent is working on behalf of both the seller and yours. Always trust your lawyer who will only cover your own interests.
As expressed;
There is clearly a high volume of challenges and pitfalls that need to be overcome when buying property in Turkey or overseas. You should always seek the legal advice of an independent property lawyer in Turkey in the first place. Only by taking this step, you’ll stand a good chance of avoiding to do legal mistakes and pitfalls when buying property in Turkey. With this in mind, consider the above-mentioned factors and pitfalls before finalizing your property investment in Turkey.
