It was written on 27 July 2017. The law and practice in Turkey change all the time. Our guides are updated as frequently as possible - typically every three years - but may be out of date.
Our guides are prepared by professionals from many countries. They are, of necessity, both brief and general and can take no account of your personal circumstances. They are intended to be a good introduction to the subject BUT ARE NO SUBSTITUTE FOR PROPER PROFESSIONAL ADVICE, which our contributors will usually be happy to provide upon request.
The advice and opinions contained in the guides are those of the author and are not necessarily those of Guides.Global.
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The purchase of a property is always expensive. This is true whether it's in Turkey or elsewhere. It is also something that has been happening for hundreds, if not thousands of years, so a lot of lessons have been learned. Thus, the process is complicated and very detailed.
It is likely to be very different from the process of buying a property that you are used to in your own country. More than ever, this chapter is an introduction to help you understand some of the issues that arise when you're buying a property in Turkey and to let you have a sensible conversation with your professional advisors: estate agents, lawyers, the Notary etc. It is not intended to be a do-it-yourself manual.
Yes. However, Turkish law makes a distinction between the rights of a foreigner and the rights of a local person when it comes to owning property. It does not matter from which part of the world the foreigner comes. The same restrictions will apply.
Certain areas of Turkey are designated as military zones. A foreigner will, generally, not be permitted to own property within a military zone.
The position is made more complicated because it is often not obvious why a particular piece of land has been designated a military zone. They are sometimes located in places where the most uneducated person would recognise the military important of the site but, sometimes, they seem to be located at random.
For many years, the process of establishing whether a piece of land was located within a military zone – and so whether you would be able to buy it – was time-consuming. You had to make an application to the Army of the Aegean, who would then issue a certificate confirming that the land was (or was not) in such a zone. This could take months.
Recently, the position has become a lot simpler. The Army of the Aegean has deposited a map showing the location of all military zones at the Cadastral (Land Registry) Office. A check can be made there. It typically takes 4-6 weeks and costs TRY200.
A further streamlining of the process means that if, since 2012, a person has already obtained a declaration that the property is not in a military zone, that will be recorded and you will automatically inherit it and so don’t need to make an application yourself.
Some foreigners fall in love with a plot of land within a military zone and which they would, therefore, not be able to buy. In the old days, they would simply set up a Turkish company and own the land through the company but that would now require the company to have more than 50% Turkish ownership. A company owned solely or mainly by foreigners will not work.
There are people who advise that there is a simple solution to this: set up a Turkish company where most of the shares are owned by a Turkish national (your estate agent, your lawyer etc) and then have them execute a document saying that they hold those shares in trust for you. We think that this is really bad advice. There is great potential for this to go long and, if it does go wrong, it will be hard, time-consuming, expensive and/or impossible to fix the problem. We think that it is better to recognise that if the State does not want you to own this piece of land, you will just have to accept that limitation.
There is one further restriction on the rights of foreigners to own land in Turkey. That is that no foreigner may own a piece of land in excess of 30 hectares (74 acres). That is quite a lot of land! If this is not enough for you, you can make an application to the Council of Ministers, and the limit can be increased to 60 hectares. Whether this application will succeed will depend upon where the land is located and the commercial rationale behind what you’re doing. This rule was put in place, basically, to protect Turkish agriculture from foreign intrusion.
One other matter that may cause you concern is that, for many years, the only foreigners who were allowed to buy land in Turkey were people who came from countries that gave Turkish people the reciprocal right to buy land in their country. This was not a problem for people from most European countries or the US, but it was an issue if you came from some Middle Eastern or Far Eastern countries. We mention this ‘problem’ only because people are likely to mention it to you but, in fact, it isn’t a problem at all any more. When the financial crash came in the late 2000s, Turkey wanted to sell land to people from the Middle East to replace the buyers from the UK and Germany who had dried up. As a result, this rule was cancelled. It now doesn’t matter which country you come from; you will be able to buy land in Turkey unless it is in a military area.
For many clients, buying a property in Turkey is a great decision. They buy for several reasons: as a permanent place for them (or, increasingly, for their children being educated in Turkey) to live, as a holiday home or as an investment.
Quite often the person buying a holiday home sees a huge lifestyle benefit - and sometimes becomes so comfortable in the area that they later decide to relocate or retire here.
You may enjoy a better climate, a lower cost of living and, often, a more active social life than you experienced at home.
Of course, there may also be all sorts of career and business opportunities in Turkey.
There’s a chance of making money, too, as property values can increase substantially. In fact, such are the investment opportunities in Turkey that many people – many of them Turks - are buying property solely for that purpose.
You probably need no reminding that there is no guarantee that properties increase in value. You will have seen, over the last few years, that in bad times their value can fall dramatically. Prices have increased since the dreadful years of 2008/9/10, but there is political and security uncertainty in Turkey which is currently making many people question whether now is the time to invest there. Of course, often, those who invest when nobody else is doing so are the ones who make real killings – but sometimes they simply get wiped out when things don’t go as they’d hoped.
So, buying a property in Turkey is not for everyone - none of us have a crystal ball to see whether the property market will improve or deteriorate. It is seldom economically attractive if you are only going to live here for a year or two. This is because the acquisition and disposal costs are both quite high.
Nor is buying a property in Turkey entirely risk free from a purely technical point of view. There are risks associated with buying a property in any country and Turkey is no exception. Do not over-estimate or fear the risks. The vast majority of transactions turn out to be danger-free. Making sure you get expert guidance will reduce your risk and increase your chances of a good experience - whether you’re buying a holiday home, an investment property or as a means of relocating to a new country.
In fact, one of the few things that all the experts agree on is that buying a property in Turkey really does require some specialist advice.
Ignore them at your peril!
Generally speaking, as long as the appropriate checks are carried out, in Turkey there is no more need to worry than there is when buying at home.
Unfortunately, many people buying property in Turkey (and in other foreign destinations) take little or no legal or financial advice and are far too casual about the purchase of property and about the signing of legal documents. If they go about things this way it can turn out badly. Sometimes very badly.
They may find that there is no title to the property, that it was built without planning permission - or, sometimes, that it does not even exist!
At the moment, the problems we come across most commonly are:
Kat irtifak title – or a kat irtifak tapu – is a provisional title deed relating to a property in a project which has not been fully completed. There is nothing in itself wrong with a kat irtifak tapu. You will often receive one when buying into a new development but, once the development is completed, it needs to be upgraded into a full, permanent title. It’s important to make sure that there is no apparent obstacle to this being done, and that the seller has an obligation to assist in that process.
If you do not do this, you can find that it becomes very hard to sell the property.
This is still a problem, though much smaller than it was a few years ago. A developer will obtain a perfectly valid building licence to construct six 150sqm houses on a site. He will then built eight 200sqm houses. Needless to say, it will then be impossible to obtain proper title to, and the right to use, those properties.
This remains a problem even after the property has been completed and you’ve taken delivery of it.
Fortunately, there are two fairly simple solutions. The first is to obtain a survey of the property you’re buying. This will confirm its size and that it has been built in accordance with the permission granted. The second, in some ways cheaper, is to take a mortgage on the property. If you do this, the bank will make the necessary checks, at no extra cost to you, and refuse the mortgage if all is not in order.
For many years, there has been a tradition in Turkey of stating (in the title deed selling the property to a new buyer) a price well below the real price being paid for the property. There were two reasons for this. The main one is to save paying tax, calculated upon the value declared in the title deed. The second, in some instances, is a desire for privacy.
Either way, under-declaration is illegal and if you assist the seller to reduce his tax liabilities in this way, you merely create an instant and completely artificial – and taxable – capital gain for yourself. Unless you can find somebody who will, in turn, under-declare the value paid when you sell the property to them, this can prove very expensive, particularly if you’re tax resident in a country with a high rate of capital gains tax.
Under-declaration is foolish and should be avoided.
This is, in particular, a problem when you are buying a property under construction, but should also be avoided in any property purchase.
Some contracts presented to buyers are simply bad contracts: they are unclear, unfair, or both. These contracts, which do not make clear the seller’s obligation to you – or your obligations to the seller (for example, in terms of payment of the price) – are highly likely to give rise to problems later on.
Fortunately, there is again a simple solution to this problem. Have your contract inspected by your lawyer before you sign it.
Whether you buy a property that has already been completed, or one still in the course of construction, you can find that problems still emerge with the fabric of the building after delivery. This is true in every country and it is a problem that cannot be completely eliminated. However, it is important that the contract makes clear the obligation of the developer to rectify any problems.
If no other periods are specified, then the law imposes an obligation for the developer to repair any large problems that arise within five years of the date of delivery of the house and any small problems (such as a broken door but not including problems caused by wear and tear) within two years.
Because fixing problems costs the developer money, they are often reluctant to do so – and if you have to go to court to enforce your rights, it can often be uneconomic as a case could easily take three years.
The principal solution to these problems is to have the property inspected before you take delivery and, ideally, to make sure that any issues found are rectified to your satisfaction before you take delivery.
Strange as it may seem, we have come across instances where buyers have been shown and agreed to buy House A (say, unit 26 in a development) but when the contract arrived it sold them House B (say, unit 50 in the same development – or even a property in a different development altogether). This is more often due to clerical error than malice but, you can image, it can cause massive problems; especially if the house you wanted to buy has in the meantime been sold to somebody else.
The solution to this problem is to make sure that you identify the property you think you are buying to your lawyer by reference to a map.
Your lawyer will have access to the maps at the Title Deed Office (Tapu office). Entering the plot number comes up with a Google Maps location. Brilliant!
This can cause a problem in two separate ways.
First, if the previous owner has not paid his condominium fees, they may become your responsibility.
The second is that, often, owners do not pay condominium fees because there is a problem with or in the condo. If this is the case, it’s better to find it out before you buy the property and, possibly, to look elsewhere. A condo with unsolved problems will probably not have the money to spend on maintenance etc. and so tends to decay.
It is quite usual, as in most countries, for developments to be financed by loans made to the developer by banks. There is nothing wrong with that. However, your contract needs to make it clear that it is the obligation of the developer to clear that finance before handing over the property and its title to you and – just as importantly – you need to make sure that the amount that you’re going to have to pay to the developer when you take delivery of the property is in excess of (and so sufficient to clear) any outstanding finance.
Don’t become one of the people who simply drifts into the purchase of a property without making any checks.
For your own safety, insist on taking proper, independent, legal advice. Independent legal advice is advice from a lawyer not connected with the seller: someone whose duty lies solely in looking after you.
Remember that for every ‘horror story’ you hear; hundreds or thousands of people buy safely in Turkey.
At the moment, in most parts of Turkey, this is a buyer’s market. There is lots of property on sale (though not as much as a few years ago) and there are relatively few buyers. There are local exceptions to this rule. For example, there is great competition to purchase property in central Istanbul. But in most of the tourist areas, you have the luxury of being able to choose from a number of suitable properties.
In most of Turkey, prices have fallen back from the heights they reached in 2007/8 but in some places – such as Bodrum – they have fallen hardly at all or they have now risen back to virtually the same levels as prevailed at that time.
The recent availability of mortgages for local Turkish people of modest means has generated lots of demand for properties of the type that they are wanting to buy – and that is also having an impact on other parts of the price range.
Going to look at houses should be the last stage in the exercise, not the first. The process of buying a property - whether it is for your personal use or for investment purposes - should start with thorough preparation.
This will save a lot of wasted time and money.
It is a good idea (though quite rare) to go to your lawyer before you go to look at any property. That way they will be able to take you through all the key issues (such as those listed below) calmly and clearly, before you get involved in the rush and pressure always associated with buying a property anywhere in the world.
There are certain steps that you can take yourself, just to make sure that you are ready to buy a property in Turkey: that you have the necessary paperwork and (if you’re thinking of applying for finance) that you’re likely to be acceptable to a mortgage lender.
We have a fuller checklist covering what you should be doing at www.guides.global/checklists.php. This is kept up-to-date and is therefore better than simply reprinting it in this book. You can a download a copy free of charge. The main points are set out below.
Be honest with yourself. This can often lead to some matrimonial moments! Is this for retirement or long-term relocation; a holiday home; a profitable holiday home; or a pure investment?
If this is an investment, where are you likely to make the most money? If it is for your own personal use, how easy will it be to get there? Surprisingly, answering a dozen or so simple questions such as these can narrow down the places likely to suit you to a radius of 30km or less (and that’s in the whole world!)
A villa, an apartment, a townhouse, or something else?
How are you going to pay for the property? Are you going to take out a mortgage? If so, where and for how much? What are you doing to guard against the risk of fluctuating exchange rates?
Will you do this yourself? Will it be done by local friends and neighbours or do you intend to use a professional property management company?
Who are your target tenants?
Who will manage the lettings?
How much money will you make?
The right choice here can save you a lot of money, even on a holiday home. See below.
Getting this question of ownership wrong is probably both the most common and the most expensive mistake people make when buying property overseas. There are many people who could be made the legal owner of the property or, possibly, the shareholders in the company that owns the property. The best choice is often not obvious.
Making the wrong decision can cost you lots of money in totally unnecessary fees and taxes - during your lifetime and on your death. Ask your lawyer for advice. It will be time and money very well spent.
Making the right choice can - in some cases - completely eliminate inheritance tax on the later passing of the property after your death or greatly reduce the taxes on any income from the property during your lifetime.
Some local lawyers will be unable to help you make this decision as it involves an understanding of both the local and your own legal, tax and inheritance systems. In this case, there will be lawyers in your own country who will be able to help.
There are many ways to purchase a property in Turkey. These include:
In your name alone
In your name and the name(s) of your co-purchaser(s)
or partly in your children’s names or in the name of somebody who you would like (eventually!) to inherit the property from you
Via your pension fund
Via a company
Via an investment fund
Via a trust
Each of these methods has advantages and disadvantages. The one that will be best for you will depend entirely on your individual circumstances.
The choice is NOT obvious. Just because a husband and wife are buying the property does NOT mean that the best choice is always to put it in both of your names. Just because your neighbours bought the property in their joint names does NOT mean that that will be the right solution for you.
A lawyer can advise the most advantageous method for you.
You can do quite a lot for yourself. Having a look at the property in a slow and methodical way and checking some of the basics could result in you rejecting a property without the need for a formal survey.
However, wherever you buy a property, it is sensible to have the property surveyed (US: inspected). We strongly recommend a survey, especially in the case of older or unusual properties - or properties that have been extended or modified.
Surveys are still not common in Turkey, particularly amongst Turkish buyers. They will invest in a survey for high value properties, but tend not to do so for more modest ones.
Surveys are carried out by licensed experts. They are inexpensive: perhaps TRY500-TRY1,000 (€121-€242/US$138-US$276/£107-£214) for a modest house.
It's also worth noting that it can be complicated (and expensive) to carry out a survey on an apartment, where the main walls and services can (and usually do) belong to the group of owners rather than to one individual apartment and where a survey of just your part of the building can be pretty much meaningless in the absence of a report about the rest of the building. A local surveyor or your lawyer will be able to tell you whether a survey would be realistic in your particular case.
Structural surveys typically take between 7-10 days. The time and cost does vary, but in Turkey a survey of a typical three-bedroom house will usually cost around €1,200.
Note that there may be cheaper alternatives to full structural surveys. These involve a surveyor or other skilled person inspecting the property (but not pulling up carpets, removing kitchen appliances etc.) and producing a general report as to the property's condition. These tend to be about half of the cost of the structural survey. However, they offer less reassurance and come with fewer guarantees.
It is also possible to get many of the benefits of a survey - but not a full structural survey - by having a builder look at the property. This is usually particularly relevant if you are thinking of doing extensive repairs or alterations to the property. If you’re going to virtually rebuild it, you may not care too much about its current state and care rather more about the cost of doing the work necessary to achieve what you want to achieve. Such an opinion by a builder is likely to be free if he thinks he’s going to obtain a sizeable job because of it.
Strangely, surveys are relatively uncommon in the case of locals buying local property. As a result, it can - especially in a sellers’ market - be difficult to persuade the seller to wait for a couple of weeks for you to get a survey before you sign some form of contract. Often, in reality, the pressure is coming from the agent (who wants to secure their commission) rather than from the seller!
Where possible, if you want a survey the best way is to persuade the seller to take the property off the market for a few days to allow the survey to take place and for you then, very rapidly, to sign a reservation or Preliminary Purchase contract (see above).
In these cases, it is legally possible to negotiate a special clause in your contract allowing you to sign a contract there and then but making the contract conditional upon your receiving a satisfactory survey result. However, many sellers are reluctant to do this because of the complexity of specifying what is a satisfactory report (meaning that the contract must go ahead) and what is an unsatisfactory report (giving you the right to cancel the contract).
No. The systems in Turkey are likely to be very different from those in your own country.
In Turkey, you should be safe to buy property if you take some basic precautions - just as you would in your own country. Just remember that this is a different country where we speak a different language and have a different legal system. If you are not familiar with either of these, you definitely need proper legal advice.
Sometimes the procedure for buying a property in Turkey may be better (quicker, cheaper, safer, easier) than the procedure in your own country. Sometimes it may be worse. But it is always different.
This can be a little confusing.
If it's any consolation, an Turkish buying an apartment in (say) Paris or New York would probably be just as confused and baffled as you are!
The important thing to understand is that there is no simple list of dangers that you need to check. For different people and different types of property or for people who are buying for different purposes the dangers will be different.
However, there are some dangers that arise in every country and every transaction. For example:
Does the seller have good legal title and the right to sell?
Is the property affected by debts?
Has the building been constructed legally?
Will you be able to use the property for the purposes you desire?
Does the property suffer from any defects?
Is what the seller and the agent have told you about the property true?
In addition, in Turkey there are other issues that often need special attention. These include:
Are you SURE you have chosen the correct form of legal ownership?
Is the property built in an area that is specially protected?
If you are buying rural land, is the land large enough to have an independent title deed?
If you are buying a 'ruin', will you be able to restore it?
Are the boundaries of the property clear?
Is the existing planning status of the property clear?
Does the property have a habitation certificate, permitting its occupation as a dwelling?
The price you declare in the Deed of Sale as the price paid for the property should, legally speaking, be the full price paid. This is the value used to calculate all the taxes arising out of the transaction. Declaring any other value can lead to all sorts of problems, both locally and in the country where you live. Declaring any other value is also illegal.
Are you aware of the rules of any condominium or home owners’ association of which the property forms a part? These can be very restrictive.
There will usually be other issues that arise in the special circumstances of any particular transaction.
All of these issues should be discussed with your lawyers, who should then be instructed to make the enquiries needed to protect your position.
Most buyers will use the services of a real estate agent (realtor) to help them find a property. Most estate agents in Turkey are honest and competent, but there are some who are not. It is always a good idea to seek out a personal recommendation about choosing the right estate agent from friends or family who have been through the process - or even from your lawyer.
At the very least, make sure that your estate agent is registered with the Turkish Chamber of Agents. At the moment, there is no legal obligation to be professionally qualified before operating as an estate agent in Turkey, or for the agency to be licenced. Licensing may come shortly.
You may come across estate agents in your own country offering property for sale in Turkey. If they are legally entitled to work as an estate agent in their own country, they are legally entitled to offer property in Turkey for sale as far as the Turks are concerned. However, such agents must (and most do) work through a registered Turkish estate agent when it comes to negotiating or finalising the transaction. So, when you come to Turkey to look at the property, you will be dealing with an estate agent experienced in selling property in Turkey.
Estate Agents in Turkey may operate differently from those in your countries. They do not operate a multiple listing service (MLS). As a result, you need to wander from one estate agent’s office to another to find everything that is on offer. Alternatively, in many parts of Turkey, you can select the agent you would like to work with and they will liaise on your behalf with other agents in the area to show you both the properties that they have been asked to sell and the properties on sale via all the other estate agents in the country. They will negotiate an arrangement whereby they will receive a part of the fee due to the other agent in return for introducing you to the property. You should not, yourself, have to pay the agent any fee for providing this service unless you specifically agree to do so in writing.
Another way in which the agents in Turkey will probably be different from the agents in your country is that they publish very little information about the properties they are selling. In places with a preponderance of sales to foreigners, you may find rather more than in other areas, but even then the information tends to be somewhat limited. There will be a picture. You will be told the number of rooms in the property, the number of square metres covered by the property and its approximate location. The rest is discovered by inspection.
You are not likely to find floor plans, the measurements of individual rooms, or any details about the facilities in the property, or in the condominium of which it might be part, in the estate agent’s publicity materials.
Yes. There are a growing number of ways in which you can find your new home.
Following the recession of the late 2000s, many banks have repossessed properties to sell. Such properties sound attractive, especially if the bank will grant you a mortgage to buy the property. However, remember that many of the properties are in undesirable locations and that many will have been neglected pending repossession. Finding a property through a bank can also be more time-consuming than when you’re using an estate agent as the estate agent will be able to help you filter the large number of areas and properties down to a few that you might really want to buy. Whilst some banks takes care of the sale of these properties themselves, most put them in the hands of local estate agents.
A few private individuals sell their property themselves - advertising on the internet, by signs on the property and (sometimes) in specialist press.
Finally, some properties are sold by auction. It is rare for a seller to sell via auction voluntarily but some properties may be offered in this way if the seller is desperate to sell and the property has been on the market for a long time. Other properties offered via auction are properties being sold upon the orders of the Court. Once again, the idea of buying property at auction can be superficially attractive but - unless you speak fluent Turkish and have the time to view lots of properties and attend lots of auctions - this approach is not, generally, a good idea for a foreign buyer.
It is usual for the estate agent or an employee of the estate agent to accompany you when you visit the property. You may find them very reluctant to give you the full details of the property, to take you there or to give you the details of the seller until you have signed a document confirming that it is they who have introduced you to the property. Whatever the reason they give you for this, the real reason is to protect their commission!
Always visit the property at least twice - preferably at different times of the day - before putting in an offer to buy the property.
Once you have found a property that you would like to buy you will almost certainly be asked to sign some form of reservation or preliminary/promissory purchase contract. If possible, it is far better to sign nothing until it has been checked by your lawyer. This can, usually, be done quickly. The market in 2017 is, once again, a bit of a buyer’s market. As a result, although you will be put under some pressure to sign some sort of preliminary contract in order that the property can be taken off the market, you should not be in any hurry to do so. Having found the property, you may well want to secure it in this way. There is, in principle, no reason you should not do so.
Although estate agents in Turkey are not professionally qualified, it is very common for them to produce these simple contracts themselves. The contract should contain little more than the details of the buyer and seller, the description of the property to be sold, the price agreed for the property and how long it will be taken off the market for you to complete your enquiries and sign a proper purchase contract. See the sample reservation contract in the documents section at the back of this book.
It is not strictly necessary to sign any form of preliminary purchase contract but it is almost universal practice to do so, especially in tourist areas.
Note that a preliminary purchase contract will usually give you only very limited rights. See below.
The alternative is to agree the deal with the seller, tell your lawyer and the notary what has been agreed and then proceed directly to the signing of the final contract of sale (title deed) (tapu) in front of the Notary. This, of course, means that you do not part with your money until you have the opportunity of obtaining full legal rights over the property.
The reason people want to sign some form of preliminary contract is that it reduces uncertainty; and uncertainty almost always equates to danger. If you have only a verbal agreement to the sale either party can change their mind and it is then at best difficult but usually impossible to do anything about it.
From the estate agent’s point of view, it also helps him collect his commission!
There are three main types of preliminary purchase contract that you are likely to encounter.
This is not, strictly speaking, a preliminary contract in relation to the purchase of the property, but it’s worth mentioning here just for the sake of completeness. This is only an agreement between you and the estate agent. In most cases, it will simply be an acknowledgement that this agent has introduced you to this property. This is more in his interests than in yours, as it’s really designed to safeguard any commission he might earn from the sale of the property, particularly if the property is listed in the offices of several estate agents.
A second type of estate agent’s contract is a contract where you agree to pay an agent a fee for helping you find a property. This is rare.
A Reservation Contract (see above for more details and the sample contract in the document library section at the end of this book) is, as already explained, usually short.
Under this contract, you pay a small amount of money (typically €1,000) to take the property off the market for a short time (typically 2-4 weeks) During this period your lawyer can carry out their checks to make sure that the house is safe to buy.
If your lawyer finds any problems before you sign the Preliminary/Promissory contract and you do not want to go ahead, you stop the process.
If you do not go ahead with the purchase because you change your mind you will lose this money. If you do not go ahead because there is a legal problem with the property you will, in theory, be entitled to recover this payment. It can sometimes be tricky to do so unless the problem is clear and obviously the responsibility of the seller.
You should understand that a Reservation Contract does not give you any rights over the property. At best, it means that – if the transaction does not go ahead – you will be entitled to the refund of your money. You will not be able to take action to force the seller to sell the property to you. This does not mean that signing a reservation contract is without any merit, but it is of limited use.
Once again, this contract is really of as much benefit to the estate agent as it is to you. If he later has any trouble with the seller he holds at least €1,000 of his commission.
A Preliminary Purchase Contract (PPC) is a true contract between you and the seller, under which the seller agrees to sell the property to you and you agree to buy it. In theory, it creates a binding obligation on both parties.
Until recently, these were used a great deal. Now their use is rather rarer. This is because it has become clear that these contracts are only really enforceable by either party if they have been notarised – and that costs money. The combination of the Stamp Duty and Notary’s fee will usually be 1.5% of the price of the property. If you do not sign a PPC but, instead, go directly to the Title Office and sign a deed of sale (tapu), you will not have to pay this fee – but you will still have to pay the Stamp Duty. If you do sign the PPC you’ll be paying it twice.
The upside of signing a PPC is that, although any penalties in the contract will not be valid unless notarised, it still forms a basis for you to get your deposit back and the basis for some kinds of litigation in respect of the contact.
This problem of notarisation – or lack thereof - is particularly important if the contract provides for a long term payment plan for the property – for example, where a property under construction is being paid for by instalments.
All in all, it’s probably sensible to dispense with signing a Preliminary Purchase Contract if you’re only paying a small deposit such as the €1,000 you would pay under a Reservation Agreement, but if you’re going to be expected to pay large amounts of money (such as by instalments when buying a property under construction) you should probably bite the bullet and sign a proper notarised contract, and pay the fees and taxes involved.
Alternatively, if the developer will agree to it, you can buy the land now (and take title to it) and then agree to pay the developer for the construction of the property by instalments as the work progresses. Few developers will accept this as, if you don’t make the payments, they’ve already handed over title to the land and have a very weak negotiating position.
An Offer to Buy is sometimes used instead of the Preliminary Purchase Contract. This is usually when your offer is subject to conditions or where the price or method of payment is very different from that sought by the seller.
It a formal written offer to buy a property. Your lawyers or a qualified estate agent should ideally draft it. This makes sure it contains the clauses needed to protect you. There are lots of possible protective clauses - for example, a clause saying that the contract will be cancelled if you do not receive a mortgage offer within a certain number of days; or if your survey shows defects in the property; or if the seller does not produce adequate proof of ownership and legal title.
The Offer to Buy will contain a closing date by which time the buyer must have accepted your offer. If she does not do so, the offer automatically lapses and the document is no longer of any legal effect.
However, it is very important to note that, if the buyer does accept your offer, it creates for both of you a legally binding obligation to go ahead with the sale and purchase upon the terms offered. It is, therefore, a much firmer commitment that just signing a reservation contract.
Offers to Buy are very rarely used in Turkey except in major commercial contracts.
Whichever type of document you are signing it is a good idea to get your lawyer to have a look at it before you sign. They are not always what they seem. It is all too often that a contract proudly headed ‘Reservation Contract’ contains all the words needed to make it an unlimited agreement to buy the property.
However, it will often not be possible to do this because of pressure from the seller or agent and, if you are using reputable estate agent, it is not strictly necessary to have your lawyer review this preliminary document. If you can get a day or two to get this checked, great. If you can’t, don’t worry too much about it - provided that you are using a proper estate agent.
It is sensible, where possible, to start your purchase with a Reservation Contract and then follow it up with a notarised Preliminary Purchase Contract. It is the safest way but it does come at a cost.
Sometimes you will be put under pressure to sign a more formal and fully legally binding Preliminary Purchase Contract at an early stage. Do not do it. By all means, sign a Reservation Contract, but do not sign the PPC until your lawyer has checked things out for you. There is never a good reason for doing so. If the seller claims to have another buyer prepared to do so if you do not, walk away.
There are some countries where the law grants buyers a period of grace, during which they can cancel their purchase contract without having to give any justification for doing so and without facing any penalty. Any money already paid must then be refunded.
Turkey is NOT one of these countries, so as soon as you sign a contract it is legally binding upon you.
It is, therefore, particularly important that you only sign a contract if:
You really want to buy the property
It is really necessary to sign a contract
It is also important that you sign the right type of contract and one that is properly drafted to reflect your circumstances and those of your particular purchase.
If you pull out of the deal simply because you change your mind, you are likely to lose your reservation deposit, if you’ve signed only a Reservation Contract. If you pull out because you discover something amiss with the property (for example, that it doesn’t have a valid building licence) you will be entitled to the return of your money.
If you have signed a full Preliminary Purchase Contract, your rights will depend upon whether the contract was notarised; and also upon the reason why you’re pulling out of the deal.
Unless you have signed a notarised PPC, you will not be able to force the seller to sell the land to you and transfer legal title to you. Otherwise, the best you will be entitled to is the return of your deposit.
Some people buy property directly from a seller or developer, without the intervention of an estate agent. You still need to take all the same precautions.
Even some major developers will sell property that is illegally constructed or not safe to buy.
If you're buying directly from a private seller or developer, it is absolutely essential that you use the services of a good lawyer.
Ideally, seek recommendations from people who live in the area. If you don’t know anybody, you may find recommendations on the consular website of your country. Such lawyers will usually be experienced in dealing with people from your country and will speak your language.
Be very careful before using the services of the estate agent’s ‘own’ lawyers. Are they looking after your interests or the interests of the agent who is providing all their work?
Find somebody who you are comfortable working with, who speaks your language and has experience of dealing with foreigners buying property in Turkey.
Always make sure that you agree, in advance, a fee with the lawyer.
He or she plays a large role in lots of legal transactions in Turkey - including dealing with Wills and inheritances and authenticating all sorts of important documents. See p263 for more details.
However, in Turkey (unlike in many European countries), the Notary does not play a major part in the process of buying and selling real estate.
If you’re dealing with a property transaction in Turkey, the most likely involvement with the Notary will be witnessing a Preliminary Purchase Contract in order to make it fully enforceable, or producing and witnessing a Power of Attorney (see p269).
It is important to bear in mind that the Notary is not there to give you legal advice or to promote your interests at the expense of the other party. He or she is much more a referee, to make sure the process is followed properly, than a lawyer acting on your behalf.
The Notary will usually know nothing about the law in your own country. Therefore, a Notary is no substitute for your own independent legal advice.
There is no state aid for the improvement of property in Turkey.
If you decide to sign a PPC, do so after your lawyer has carried out the following checks:
Your lawyer should carry out, or arrange, a variety of checks on the property. This would usually include:
A check to make sure that the person selling the property is its registered legal owner; and that the property is free from debts or other burdens (e.g. rights of way across the property) that might adversely affect you.
A check that the description of what you are buying matched the description in the title register. In the case of second-hand properties it is commonplace for there to have been illegal or undocumented changes or extensions to the property.
A planning enquiry to establish the current planning status for the property. Ideally, this would show that there is (in the case of a new property) a construction licence for the building of the property or (in the case of a resale property) a habitation certificate authorising the occupation of the property as a dwelling.
Checks on the proposed contract of sale to make sure its terms are fair and cover all the necessary points needed to protect you.
Checking that, where these are required, the proper guarantees securing the completion of construction of the property will be made available.
There may be other checks required in the particular circumstances of your transaction. Your lawyer should discuss these with you.
As we’ve already mentioned, surveys are rare when people are buying property in Turkey – but this does not make them a bad idea.
If you have the property surveyed, you will at least know:
That it is the property you thought you were buying
What has been built tallies with the building licence that’s been issued
If it is a resale property, you will have some idea of the condition of the property. Rewiring a house or replacing a roof is as expensive in Turkey as elsewhere.
This will also be the time to obtain an approval, in principle, of a mortgage.
If you wish to make alterations to the property (e.g., to put in a swimming pool) this will also be the time to check that the authorities are likely to agree to them.
If you want to use the property for a particular purpose (e.g. as a bar or office) you should check that this will be permitted.
Once all the steps appropriate in your case have been taken, your lawyer should produce a written report setting out their findings, their general observations and their opinion as to whether they think that it is – from a legal point of view – safe to proceed with the purchase.
If everything is OK when your lawyer checks things for you and you decide to go ahead with the purchase, you will then usually sign a Preliminary Purchase Contract, so committing yourself to the purchase.
You will then pay a part of the agreed price as a deposit. Typically, in the case of a resale property, this is 10% of the price. For property bought off-plan (not yet built) the deposit (often 30% of the price) is usually followed by a series of stage payments as the building work progresses. The triggers for these payments will be specified in the contract.
The PPC can either be signed informally or formally (in the presence of a Notary). If it is signed informally, you enjoy a lot less protection if things go wrong. On the other hand, signing in front of a notary involves additional expenses and taxes amounting to about 1.5% of the price of the property.
In some cases it is much more sensible to agree to an informal signing than it might be in others. Ask your lawyer for advice.
As already explained, there is no cooling off period when you buy a property in Turkey.
Once you have signed the Preliminary/Promissory Purchase Contract you are committed and you can only 'escape' from the contract for good legal reasons - those stated in the contract or laid down by the general law. It is, therefore, VITAL that you are entirely happy with the terms of the purchase before you sign any contract.
In many cases your lawyer will prepare a Power of Attorney authorising someone in Turkey to sign the Final Contract of Sale/Title Deed (Tapu) on your behalf. This will be needed if you cannot or do not want to be in Turkey to deal with the formalities yourself.
The Power of Attorney can be signed either in Turkey or in your own country. It is much cheaper to do it in Turkey if you happen to be in the country at the time.
They will usually also need to apply for a tax number for you, to open a bank account and/or to obtain other documentation needed to buy a property in Turkey.
If you are taking out a mortgage in Turkey, your lawyer may need to liaise with your lender.
They will certainly have to liaise with your seller and, when everything is ready, they will arrange for the Notary to prepare for the signing of the Final Contract of Sale/Title Deed (Tapu).
As already mentioned, some people omit all these earlier stages and proceed directly to the signing of the Formal Contract of Sale.
This is usually when the sale is going to be finalised quickly or when the property is of low value.
If you’re going to do this, it is important that you and the seller really have agreed all the relevant details so that you don’t get into an argument when it comes to the Notary preparing the formal contract.
Buying a house in this way can save you quite a lot of money in legal fees but it leaves you very exposed; the seller can change their mind or move the goalposts at any point. The might decide not to sell at all or they might try to bounce you into paying a higher price: sometimes on the day of the proposed signing and handover. If any of this happens, doing without the PPC can become a very expensive saving!
The Tapu Office will carry out, or arrange, a very limited range of checks on the property.
They will also require formal proof of your identity and other personal details. These are not only needed to prepare the various contracts but also to comply with international anti-money laundering regulations.
They will then also prepare the Formal Deed of Sale (Tapu) document for signature by the seller and the buyer.
Whilst this is all taking place you and your lawyer will make arrangements with your bank for any mortgage funding to be made available on the day the formal contract for sale is signed. In order to do this, the wording of a deed of mortgage will have to be agreed.
You will need to arrange for the rest of the money to be transferred to Turkey. This will usually be paid into your own bank account in Turkey, leaving you or your lawyer (using a power of Attorney) to draw it out when needed. Remember that you will need to transfer not only the balance of the price but also the amount needed to pay all the fees and taxes plus a small margin to deal with the unexpected. Your lawyer will give you a calculation showing the amount you will need to transfer.
Whatever that sum is, add a bit extra to allow for fluctuations in exchange rate. We suggest 1-2% of the total to be sent.
Make the transfer via a specialist foreign exchange (FX) company, rather than via your usual bank. See p108.
You will usually need to be present in person for the purchase of a property involving a mortgage. Most banks no longer accept the finalisation of such contracts via a power of attorney. If the bank will accept signature via a power of attorney, you and your lawyer will need to prepare the power of attorney. See below.
Once all these things have been done and you and your lawyer are happy that everything is in order, you can sign the Formal Deed of Sale.
The Final Deed of Sale (Tapu) is the document transferring ownership to you. This must, by law, be prepared by and signed in front of the Tapu Office, which must carry out various tasks before doing so. When everybody is ready to proceed, the Final Contract of Sale/Title Deed is signed.
It is either signed by the sellers and by each of the new owners in person or by people having Powers of Attorney on their behalf. As already mentioned, you will probably not be able to sign via a Power of Attorney if you're taking a mortgage in Turkey.
Shortly before the final contract of sale is signed, your lawyers will pay all the necessary taxes and expenses arising from the purchase.
You usually pay over the price of the property (less any deposit or stage payments already made), the Tapu Office’s fees and other fees when you sign the Final Deed of Sale.
These days, this is all a very slick process. Your lawyer will make an appointment to sign the Tapu, online, and will usually be able to sign that day or the day following.
Your lawyer will obtain approval from the municipality that the amount being declared in the title is at least the minimum they assess the property as being worth. Your lawyer will obtain the compulsory earthquake insurance (DASK) from the government at a massive cost of TRY100.
He will then pay the taxes immediately before signing… and that’s really it. The only delay comes about if you need to obtain a military clearance (which can add three or four weeks to the process) or if you want to obtain a mortgage (which will also add several weeks to the process). Your lawyer will receive an SMS saying that everything is ready for signature, giving a payment code and a time for the signing.
If you attend in person to sign the Tapu (which is an interesting thing to do and which could well cost you less than the cost of a Power of Attorney if you would otherwise have to sign the Power in your own country), a translator will also be required unless you speak fluent Turkish. Either way, you will be taken into a special room where the officer will read the title document to you (in Turkish) and where it will be translated (by your interpreter).
Once you or your lawyer have signed, you can collect your finished title deed five minutes later.
This whole process is then registered in the Land Registry’s computer system – TAKBIS – and forms the basis of your claim to ownership of the property.
One of the great joys of the Turkish system is that the Tapu Office, where you sign the Deed of Sale, is the Land Registry. So, by signing the Deed of Sale, you have complied with all of the steps that are needed to secure your title to the property.
This is a great deal faster and somewhat safer than the arrangements in many countries, which involve a signing before a Notary followed by a separate registration of title at the Land Registry office.
The whole process from seeing the property up to the signing of the Final Contract of Sale will (in the case of a resale property with no mortgage) typically take about 12-16 weeks, though this can vary enormously.
If you are going to take out a mortgage, this will usually add about a month to the process.
In the case of a property under construction, the speed of construction usually determines the pace - typically, perhaps, 18 months.
As the new owner of a property in Turkey, there are various steps that you ought to take:
Tell the local town hall that you have bought the house. This should have been done, automatically, as part of the purchase process but it is a good idea to contact them. It’s very important for the town hall that you register as an owner, because the grant that they receive from the government each year depends upon the number of inhabitants (local and foreign) registered as living in their area. By registering you will give them just a bit more money to spend on schools, roads, garbage collection etc.
If your house is part of a community of owners, introduce yourself to the president and to the administrator. Once again, they should have been notified about your purchase automatically but it is good manners to present yourself to them and it is helpful if, for some reason, the notification hasn’t arrived. You will need to make arrangements to pay your community fees. In some cases, these are payable monthly and in others they are payable in one annual lump sum.
Notify the utility companies - water, electricity and telephone - that you are the new owner of the property and arrange for future bills to be sent to you.
Insure the property. Your lawyer or estate agent should be able to suggest a suitable insurance company.
Finally, whilst it’s nothing to do with buying the house, this is a very good time to make a Will relating to your assets in Turkey.
Buying a property in another country - no matter which country it is - is always going to come with some amount of risk. The more you learn, and the more expert advice you receive, the less chance there is of anything going wrong.
|Turkey Country Guide
Essential facts and figures about Turkey
|Buying a New Property in Turkey
Special considerations when buying new builds
|Buying an Off-Plan Property in Turkey
Things to think about if you're buying an off-plan property
|Buying a Commercial Property in Turkey
Things to think about if you're buying an off-plan property
|Renting a Property in Turkey
What you need to know if you're renting a Turkish property
I hope you have found this guide useful. If you need any further help, please contact me.Başak Yıldız Orkun 27 July 2017
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