Hi ya there
How are you all doing?I am a new member here and i don't want to be too noisy as it s my first times and i would rather lean bk and watch what s goin on but as this is sth that i ite help i just couldn't stop sending a post. Here s some info which might be helpful .
BUYING PROCESS
Organise your Finances
Currently, there is no mortgage system in Turkey however the Turkish Government has prepared a draft Mortgage Law and the system is expected to be launched by the end of first half of 2006. In order to finance a property purchase in Turkey, you can re-mortgage your property in the UK or obtain a long-term loan from a Turkish financial organisation. To do that you need to provide acceptable financial guarantees such as a bank guarantee letter for a UK based asset. Please note that your property is at risk if you fail to make repayments. If you are looking to secure a property during your inspection trip with cash, prepare by finding out the timescales involved to release money from your account and transfer it to Turkey. Most UK banks will accept a faxed transfer authorisation but you need to arrange this with them prior to your visit. Alternatively deposits can be made with a cash advance on a credit card or you can use your cheque book provided by your UK bank. We advise you to compare the cost of transferring money from your UK account to an account in Turkey to the commission fee charged on your UK cheque by Turkish banks. According to current regulations, any monetary transaction which exceeds YTL 8,000 (approximately £3,000) has to be made through banks, private financial agencies or the Post Office. There are no restrictions on the amount of money (either YTL or any foreign currency) you can bring to Turkey. You can freely transfer money abroad that you make through either selling or renting out your property. Making your payments through the systems mentioned above will enable you to document your property-buying transactions. In case of any dispute or undesirable events, you will be able to make use of those records. You can make your payment in GBP, USD, EUR, New Turkish Lira (YTL) or other convertible currencies sold or purchased by the Central Bank of Turkey. If you want to carry out your transactions in YTL, then you are advised to convert your currency into YTL at Banks, Private Finance Organisations or authorised change bureaux in Turkey. You can find daily indicative exchange rates at
www.tcmb.gov.tr Opening a Turkish bank account You can open bank accounts in Turkey with your own name, all you need to do is go to a bank branch which you want to use, with your passport. When opening joint bank accounts, check if the other party(ies) has the right to withdraw money without your consent. If you want to open a Turkish bank account while you are in the UK, you can…
· assign someone to carry out the above transactions for you through a power of attorney, or contact the Turkish banks based in the UK
Contact with relevant professionals
We recommend you make contact with the relevant professionals - legal and financial advisors and a Sworn-Translator - to carry out the processes with experience and professionalism. Actual buying process A non-refundable reservation fee of 1-2% is paid to the buyer to take the property out off the market for up to 20 days or more. A private purchase contract is drawn up between the buyer and the seller. The contract should contain all details and conditions related to building specifications, the estimated time plan for completion, the milestones (if off-plan), terms and conditions for payment and the buyer's and seller's responsibilities. Two copies of the contract are made so each party can keep one. During this period (while the property is reserved for 20 days) you can prepare by making financial arrangements and checking-over the contract with your solicitor. This Contract Agreement is binding in Turkish Law and will be in both English and Turkish. To activate the contract and take the property off the market as sold, you will need to sign the contract and pay a deposit, which is negotiable between the seller and you. Real estate purchase deposits are averaged at 5 to10% of the selling price. In some situations interim payments may be required.
As a next step, both the buyer and owner (or their legally authorised agents) apply to the TAPU Office to transfer the ownership. During the application, the buyers are to provide the local TAPU Office with the following documents:
1) Title Deed or a document indicating the property’s exact location (plot or parcel number etc.)
2) Passport and/or ID Card of the buyer,
3) Two recent passport size (4cm x 6cm) photos of the buyer, If any agent is being used; · Passport and/or ID Card of the agent
· Two recent passport photos of the agent and
· An acceptable Power of Attorney
Upon your application, the office in question does a search on your behalf to see whether the asset is in a military or security zone. They ask the local military authorities to identify the property's exact status and once the military authorities confirm that the real estate is outside the military and security zones, your application is automatically accepted. At the moment military clearance may still take 2-6 months but new Turkish law (from the 5th of January) is expected to ease these military clearance transactions. If the area of the land you want to buy exceeds 25,000 m2, then the Council of Ministers' approval is needed. Finally, after military clearance has been finished, you are given an official ownership document called Tapu -Turkish Title Deeds. Without having a Turkish title deed, you are not considered legal owner of the property even if you signed a legally acceptable purchase contract with the seller.
You are advised to make the payments net of the deposit (plus interim payments, if any) to the seller at this stage.
TAXES AND CAPITAL GAINS
With regards to property in Turkey, following taxes or compulsory insurances are applicable:
· Personal income tax (based on rental income and capital gains)
· Inheritance and succession tax
· Real estate tax (similar to the Council Tax of the UK)
· Real Estate Acquisition and Purchase Levy (at the time of purchase or (sale)
· Stamp Duty (if a contract with a monetary clause exists)
· Environmental tax (collected through water utility bills)
· Earthquake insurance (a nationwide contribution rate is applied)
A real estate property may give an individual two types of taxable gain.
The market value of your asset may rise. If you sell your property within four years of the acquisition date, you will be subject to personal income tax based on the difference between the selling price and the inflation-adjusted acquisition price.
For sales by individuals after four years since acquisition, no personal income tax is charged on the gains.
Foreign nationals and Turkish citizens are no different in terms of taxes or levies to be charged.
Annual Property Tax rates for cultivated land, uncultivated (for building) land, non-residence-purpose buildings, and residential buildings are 0.1%, 0.3%, 0.2%, and 0.1% respectively. Tax is calculated on the basis of the declared value of the asset, which cannot be less than a threshold determined by tax authorities. Tax payments are made in two equal instalments in the period March-to-May and November each year and are collected by the local government (Municipality). The tax rate is annually updated by a coefficient determined by the Ministry of Finance taking into account the inflation rate.
The Real Estate Tax rates for properties in some provinces (metropolitan areas) are twice the rates stated above.
Wills
Wills prepared by foreign nationals in their own countries can be executed in Turkey so as to transfer the ownership of a property to the individual(s) stated within the wills. To carry out the property transfer pursuant to a will, an heir has to gather a court letter confirming the will from the relevant court of his/her own country and to have it ratified at the Turkish Consulate General. Then he/she has to submit that letter to the relevant Turkish provincial court where the property is located. Then the Turkish Court issues an official document, which allows the transfer. Finally, the heir presents the document granted by the Court to the Tapu Office as well as other documents required for the transfer of ownership. These transfers are exempt from any military clearance and the other restrictions applied to foreign nationals. Please note that transfer of ownership of a property to an heir is subject to inheritance tax. Thus, if the heir sells his inherited property, he is not subject to any personal income tax based on the capital gain. When a married couple gets divorced and one of the parties is to transfer the ownership of his/her property (or a share) into the name of the other party, then this transaction is not subject to any tax. Similarly, in Turkey, subsistence payments to be made by a divorced party to the other party are all tax exempt, Since UK pensions are already subject to tax in the UK, they will not be taxed again in Turkey. Furthermore, such an income is not gained as a result of a commercial activity carried out in Turkey. In this regard, you can freely transfer your pensions to Turkey. You can either have your pension transferred to your bank account in Turkey or get cheques sent to you.
LIVING IN TURKEY
Cost of Living
The average Turkish household lives on a monthly income much less than the average UK pension, therefore your pension should allow you to have a financially comfortable life in Turkey. Utilities Gas is normally used for cooking and can also be used for water heating. Big cities have gas piped directly to each house or apartment but lots of towns and villages use bottled gas. Kitchen hobs, ovens and water heaters are, where required, designed for this type of gas usage. Bottled gas supply, in those cases, is organised by private companies and service quality is very good. In coastal cities, solar energy heating and boiling systems are used very widely. Water is supplied by municipalities and is charged for according to the amount of water you use. Drinking water can be obtained from shops or, more economically, via private companies. Electricity, natural gas, telephone, and water utilities are billed monthly, quarterly or semi-annually depending on the supplier. You need a residential visa to have a telephone installed, however you can use a mobile phone from your own country and purchase a SIM card from one of the shops in Turkey on a pay-as-you-go basis. Land telephone lines are provided by Turk Telekom and can be connected next day, depending on availability in your area. There is a small line rental payable annually (approximately £12). Lines are generally good and internet access is easy and well served. All electricity, natural gas and telecom companies are audited by the relevant Regulatory and Supervisory Authorities to which subscribers can make complaints in case of disputes. Moreover, the Consumer Protection Law and the Competition Law are two laws aimed at protecting all consumers in the country. It is suggested that as soon as you take ownership, you should immediately subscribe to electricity, gas, and water companies in your own name. All subscription transactions can be completed in a day. On the other hand, if you plan to rent your property out, make sure that the tenants register with the utility suppliers in their own names. Taking into account the average consumption of Turkish residents, the total cost of the utilities explained in this section is expected to range between £50 and £200 per month, depending on the features of the asset and the use of the utilities.
Many banks in Turkey provide 'direct debit' services especially for payments to utility companies. In addition, if you will stay outside Turkey, you can use management companies to pay utility bills for you.
Healthcare
There are two private hospitals, one state hospital and various clinics in Fethiye. English speaking staff is available in many of them and medical insurance is also possible. Please note that Turkish health insurers provide very cheap insurance policies and cover diagnosis/treatment of lots of diseases. They are connected to very good private hospitals, scanning centres, and medical laboratories with no waiting lists and instant diagnosis and treatment. You can buy private health insurance policies at a reasonable cost and are usually renewable annually. Private companies offer in-patient and out-patient health services in private hospitals. There are also travel assistance products for contract lenghts less than one year, offering health services during yhe tourists’ trip to Turkey. Furthermore, prices of pharmaceutical products are very low in Turkey
Visa requirements
If you would like to reside in Turkey longer than the normal period allowed to tourists, you need a residence visa. All documents for a residence visa must be submitted to the Turkish Consulate General at least eight weeks before the intended date of departure (Nationals of European Union countries and nationals of Australia, Canada, Iceland, New Zealand, Norway, Switzerland and USA may be issued a one year resident visa in a week, depending on their circumstances). Please note that applications must be referred to the relevant Turkish authorities for their approval. Therefore, applicants are advised to contact the Consulate to find out the outcome in due course. After obtaining the residence visa, you are required to register with the local police within a month of arrival in Turkey in order to obtain a residence permit. If you wish to extend your permit for a further period, you should apply to the same police headquarters before the permit expires.
RESIDENCE AND WORKING PERMIT
According to Act No:4817 on "Work Permits for Foreigners" which entered into force on 06.09.2003, foreigners who are to work in Turkey have torecieve permission beforehand from the Ministry of Labour and Social Security. Domestic Application for Work Permit; Foreigners who have been granted residence permits in Turkey with validity period of at least six months, for any reason except training may apply for work permits within this period to the Ministry of Labour and Social Security. Application for Work Permit from Abroad; Foreigners may submit their application form for work permits from abroad through foreign representations of Turkey. The foreigners who will stay in Turkey for more than three months shall apply to security authorities and fill in a declaration in order to obtain a ‘residence permit’. The applicant shall be requested no fees or charges for this declaration. The foreigners who have arrived in Turkey for the purpose of working must obtain a ‘residence permit’ within one month beginning on their arrival dates. They must have received the permission before the start of work, in any condition. The foreigners arrived in Turkey with a common passport on purpose of touring or participating in a congress or conference or a cultural entertainment are not assigned to obtain permission within two months. This duration may be longer if necessary. Residence permits are obtained from the local police. If the claimant or the head of the family has already been granted a work permit, the residence permit will be extended easily.
Dealing with off-plan property or land
In the case of an off-plan property or land you will receive two Tapu’s.
The first one is the Land deed -Arsa Tapusu, This will show the new owners name. According to Turkish law as long as the owners name is on this certificate, then they own whatever is on the land. Building Permissions In the case of an off-plan property or land, you will receive two Tapu’s. The first one is the Land deed - Arsa Tapusu, This will show the new owners name. According to Turkish law as long as the owner’s name is on this certificate, then they own whatever is on the land. To have a building constructed on your land, you have to get permission from local official authorities and the engineering blue-prints of the building have to be in line with the official Construction Plans. We can advise you on choosing reputable Turkish companies specialising in construction and contracting services. We can also introduce architect and civil engineering bureaux to construct your building.
Secondly, a title deeds application must be made to the local council offices for a residential license (oturma izni). This is done by the property vendor (i.e. the builder), and is only issued once the building has been inspected to comply with the building regulations. Once this has been granted the title deed will show the words CINS TASHIHI, which confirms the classification on the property. In the case of re-sale,
the OTURMA IZNI should have already been granted. Source:
www.turkisheconomy.org.uk
I hope this will help!oughhh!i am tired.
I will try and write some more about Kemer later
Cheers
Thomas
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