Turkey Real Estate Program

Turkey straddles the point where Europe and Asia converge, situated at the closest point between the three continents of Asia, Africa, and Europe. The mainland of Anatolia has been a crossroads for numerous migrations, significantly influencing its historical trajectory due to its strategic location. Anatolia, rich in diverse civilizations, offers a unique blend of cultures that, while distinct, are deeply interconnected with their historical roots.

Turkey’s warm, sunny climate makes it a popular tourist destination, but its appeal extends far beyond resort attractions. The country is home to world-renowned cultural and historical landmarks, from the ancient ruins of Ephesus (Efes) to the majestic Byzantine dome of Aya Sofya. Influenced by a variety of historical figures and civilizations—including the Romans, Byzantines, and Ottomans Turkey has left an indelible mark along the historic Silk Road. Discovering this rich heritage, from Istanbul’s expansive Topkapı Palace to the enigmatic Lycian ruins, is one of the many advantages of obtaining Turkish citizenship by investment.

Turkey’s diverse landscapes offer stunning beauty, particularly in Asian Anatolia. Visitors can marvel at the Mediterranean coastline’s breathtaking vistas and explore Cappadocia’s surreal rock formations and “fairy chimneys,” which provide otherworldly views.

The country caters to all interests, offering activities such as relaxing in the warm, azure waters of Patara, kayaking over Kekova’s sunken ruins, or taking a hot-air balloon ride over Cappadocia. For those seeking adventure, relaxation, or cultural enrichment, Turkey provides an abundance of opportunities to suit every taste.

Turkey Real Estate

Turkey’s real estate market has demonstrated impressive resilience and growth, particularly in the wake of global disruptions such as the Covid-19 pandemic. Here’s a detailed look at the current state of the Turkish real estate market and key factors driving its success:

Market Overview:

1. Sector Growth and Investment:

• Construction and Infrastructure: Over the past 20 years, Turkey has seen significant advancements in its real estate sector, driven by robust construction policies and substantial infrastructure investments. These efforts have spurred development across the country and enhanced the overall attractiveness of the market.
• Interest Rates and Demand: The Turkish real estate market experienced a notable surge during the pandemic, with interest rates dropping and demand rising. This combination fueled a peak in housing sales and an influx of foreign investment.

2. Sales Statistics:

• Housing Sales: In 2020, Turkey reached a record of 1.49 million housing units sold. This high level of sales indicates strong market activity and a robust demand for property.
• Foreign Investment: Sales to foreign nationals increased by 43.5% in the same period, reaching a record high of 58,576 units. This surge reflects growing international interest in Turkish real estate.

3. Market Drivers:

• Attractive Financing: Lower interest rates have made property purchases more accessible and appealing to both domestic and foreign buyers.
• Growing Demand: The combination of favorable financing conditions and increasing demand has contributed to the market’s expansion, making it an attractive destination for investors.

4. International Appeal:

• Foreign Buyers: The significant rise in sales to foreign nationals highlights Turkey’s attractiveness as a real estate investment destination. The country’s strategic location, diverse property offerings, and favorable investment conditions continue to draw international buyers.

Key Considerations for Investors:

• Economic and Political Stability: While Turkey offers a vibrant real estate market, investors should stay informed about the country’s economic and political landscape, as these factors can influence market dynamics.
• Regulations for Foreign Buyers: Understanding the legal and regulatory framework for foreign property ownership in Turkey is crucial. It’s advisable for international investors to work with local legal and real estate experts to navigate these regulations effectively.
• Long-Term Potential: Turkey’s ongoing investment in infrastructure and development projects suggests continued growth and opportunity in the real estate sector. Investors should consider both short-term gains and long-term potential when evaluating opportunities.

Turkey’s real estate market has shown remarkable growth, particularly during the pandemic, thanks to favorable interest rates and rising demand. With a record number of housing sales and a significant increase in foreign investments, Turkey stands out as a dynamic and attractive market. Investors should be aware of the country’s regulatory environment and leverage local expertise to maximize their investment potential.

Frequently Asked Questions (FAQ)

Are there any restrictions on acquiring real estate in Turkey by foreign buyers?

Foreign investors are allowed to acquire properties and restricted real rights up to 30 hectares. However, the total area of properties owned by foreign nationals in a district cannot exceed 10% of the district’s total area. Additionally, foreign buyers are prohibited from purchasing properties located in military forbidden zones as specified by the Military Forbidden Zones and Security Zones Law No. 2565.

Are there additional expenses associated with real estate transactions?

Yes, there are additional expenses which include:

• Title Deed Fee: 2% of the property’s sale value, which is shared between the buyer and seller. The value used must be at least the amount stated in the appraisal report.
• Small Circulation Capital Fee: Charged to the buyer, which was under TRY 200 in 2021; updated rates may be announced.

How to acquire immovable property in Turkey?

There are two main methods for acquiring immovable property in Turkey:

1. Power of Attorney: Buyers can appoint a representative with power of attorney in Turkey to handle the acquisition process.
2. Direct Purchase: Buyers must obtain a Turkish tax number and open an account at a Turkish bank. After securing these, they can sign a contract with the seller. The title deed transfer is processed through the Directorate of Land Registry and Cadastre or can be completed online via Webtapu (webtapu.tkgm.gov.tr/), which is available in Arabic, English, French, and Russian.

Is it necessary to open a bank account to purchase property, and what is the procedure?

No, it is not necessary to open a Turkish bank account to purchase property. Buyers can transfer the purchase price directly from abroad.

What returns can be expected from property investment in Turkey?

Turkey experienced a significant increase in housing prices, with a 32% rise in 2021 according to Eurostat. Rental yields vary by location:

• City Centers: Typically offer yields around 7.6%.
• Coastal Areas: Can yield from 13% up to 16%.

How is rental income taxed?

Rental income must be declared to the nearest tax office between March 1 and 25 for the previous calendar year. Taxes are paid in two installments annually, in March and July. The minimum rental income threshold, which is tax-exempt, is TRY 9,500 for residential properties and TRY 70,000 for commercial properties per year.

What other property-related taxes and charges are there in Turkey?

In two equal installments local property tax is payable: the first in May and the second in November. The amount is calculated based on the minimum fair values of the property for that year. Buyers should contact the local municipality for detailed information and payment options.

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