TABLE OF CONTENTS
- Property taxes
- Utility costs
- Rental income
- Real estate management: management companies and project managers
- Few words about property transactions
- To sum up: what you should definitely consider when buying property in Turkey
Property taxes
The property tax is paid annually on all properties since 1986.
Depending on tax benefits, this tax can be paid at one time or divided into two parts. The size of the property tax that a property owner has to pay for is based on the minimum cadastral value at different rates depending on the type of ownership.
The tax must be paid by all owners of real estate. If a property is inherited, the property tax is divided between the new property owners.
When you buy or sell your property, tax obligations are not transfered to the new owner.
There are special tax benefits for certain social groups. For instance, veterans, widows, orphans and citizens with disabilities do not have to pay the property tax if they provide all necessary documents.
The Turkey's government every year specifies the deadline for tax payments. Usually you can split the payment in two parts and pay at the end of the month specified for tax payments. In 2020, the tax payment deadlines are May 31 and November 30.
The real estate tax can be paid in district and city municipalities or online on the official websites of municipalities and the tax office.
In 2020, the property tax rate increased by 11.29% compared to 2019. Tax rates depend on the type of ownership, the number of square meters of the property and may vary depending on what area/district the property is located in. The rate varies from 0.1 - 0.2% of the cost for residential properties and land without a building permit, 0.2 - 0.4% for commercial objects and 0.3 - 0.6% for land with a building permit.
Utility costs
Utilities in Turkey include electricity, water, gas (if there is a central gas system, there are areas where it is not available), and the development project maintenance services - Aidat.
Electricity, water and gas payments are based on the meters readings, which the utility service companies monitor every month. The rates are set by the government and are subject to indexation on a quarterly or semi-annual basis. Electricity and gas bills, depending on the amount of energy and cubic meters of gas consumed, are usually 250-300 Turkish liras. As a rule, water bills are smaller, usually 40-50 Turkish liras.
RENTAL INCOME
When your plan is investing into overseas property, the key issue is how much profit your property can bring you. You can get the highest rental income from properties located on the coast of the Mediterranean, Aegean Sea and Istanbul and Ankara. On average, the rental income ranges from 300 to 500 dollars per month for a small 1+1 apartment (an apartment with a minimum number of square meters). You should also keep in mind that property owner can rent out their property only for a long-term period, at least for a year. According to the Turkish legislation, only real estate agents can provide short-term rent services. These agents must have a licence for this type of service.
REAL ESTATE MANAGEMENT: COMPANIES AND REPRESENTATIVES OF MANAGERS
When it comes to property management services, property owners can choose a property management company to work with. Most of these companies are private businesses. Property management companies' services and rates may vary depending on the type of the project, its total area and infrastructure (pools, sports and playgrounds, and etc). Property owners may also manage their property on their own. In this case, they choose a manager of the block of the whole development by voting at the general meeting of all residents. The monthly fee for the maintenance of the project's facilities is called 'aidat'. Its size depends on the infrastructure of the condominium. The more developed the infrastructure is, the higher 'aidat' is. So, it can range from 15 to 300 Turkish liras (in some cases, even higher).
FEW WORDS ABOUT REAL ESTATE PURCHASE AND SALE TRANSACTIONS
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The title deed that proves your property ownership is called 'Tapu Senedi' or just Tapu. The process of buying a property does not take much time and it is a fairly simple procedure when it comes to registering the deal in the Property Registration Office. However, one of the most important things before signing the sales contract is to check the legal clarity of the deal, including all financial and technical aspects. To sign the contract and register the deal, a foreign buyer will need a passport (sometimes a notarized translation may be required), a tax identification number (for paying all necessary fees and duties), a photo of the new property owner and a translator.
TO SUM UP: WHAT YOU SHOULD DEFINITELY CONSIDER WHEN BUYING PROPERTY IN TURKEY
First, you should make sure that the property you are buying is legally verified and the contract is legally correct. Secondly, consider how profitable the property you are buying is and how much you will have to pay for its maintenance. And last but not least, don't forget that if you decide to resell your new overseas home, you will have to pay taxes and other fees.