Türkiye Real Estate

Türkiye real estate

Türkiye has a highly attractive real estate market that has been rapidly enhanced over the past 20 years by policies that prioritize the construction sector and multi-billion infrastructure investments.

Compared to the global real estate market, which largely came to a halt in the second quarter of 2020 when most of the world shut down in response to the Covid-19 pandemic, the Turkish real estate market reached its peak due to plunging interest rates and booming demand. According to Turkstat, housing sales in Türkiye reached 1.49 million units, while sales to foreign nationals increased by 43.5% in the same period and hit a record-high 58,576 units.

Are there any restrictions on the acquisition of real estate in Türkiye by foreign buyers?

Foreign investors may acquire properties and restricted real rights of up to 30 h. (In Turkish law, real rights are rights that give direct control over movable or immovable property and that can be asserted by anyone). The total area of properties acquired by foreign nationals may not exceed 10% of the surface area of the property’s subject district. In addition, foreign buyers may not acquire properties in military forbidden zones, following the Military Forbidden Zones and Security Zones Law No. 2565.

How can immovable property in Türkiye be acquired?

There are two ways to acquire an immovable property in Türkiye. First, the buyer may entrust a power of attorney in Türkiye. Otherwise, they must obtain a Turkish tax number and open an account at a Turkish bank. The next step is signing the contract with the seller. The transfer of the title deed can be executed through the Directorate of Land Registry and Cadastre or online with Webtapu (webtapu.tkgm.gov.tr/), which is available in Arabic, English, French, and Russian.

What additional expenses will the real estate transaction incur?

The title deed fee is collected separately from the buyer and seller at a 2% rate of the disposal value. The value cannot be less than the value in the appraisal report, which shows the actual value of the property. A small circulation capital fee is charged from the buyer, which was less than TRY 200 in 2021. A new tariff is yet to be announced.

Does the applicant need to open a bank account in order to purchase property, and if so, what is the procedure?

No, the buyer is allowed to transfer the purchase price directly from abroad without opening a bank account.

What kind of returns can be expected from property investment in Türkiye?

According to Eurostat, Türkiye has the highest increase in housing prices in Europe — 32% in 2021. Rentals in Türkiye surged by 9.4% between 2020 and 2021, and gross rental yields vary from moderate to high. Properties in major city centers offer yields of 7.6%, while those in coastal areas can yield from 13% up to an impressive 16%.

How is rental income taxed?

If a buyer rents their property annually to an individual or a company, they would have to file a tax return for their rental income for the previous calendar year to the nearest tax office between 1 and 25 March. The tax is paid in equal installments twice a year — in March and July. The minimum rental income, which is not taxed, is TRY 9,500 for housing and TRY 70,000 for commercial properties per year.

What other immovable property-related taxes and charges are imposed in Türkiye?

Local property tax is payable in two equal installments, the first in May and the second in November. The buyer is required to contact the local municipality for further information and payment options. The amount to be paid for that year is calculated by using the rates below over the minimum fair values of the real estate within the relevant year.