Turkish Property Investment
Why Property Investment in Turkey Is a Good Idea
Turkish property investment offers a great “return on investment” for investors who are willing to put in the work. Whether you’re looking for penthouses in the most sought after neighborhoods or a plot of land in a new development, Istanbul has an abundance of great deals right now. Turkish real estate also offers low taxes and great maintenance options. And, Turkey’s historic significance on the world stage means you’ll get a tax break if you sell your property in a few years.
Off-plan property investment
The off-plan property market in Turkey is growing at an extremely fast pace. This means that capital appreciation is expected to be exceptionally strong for the next five years. Furthermore, tourism in Turkey is booming, leading to a high demand for high-quality accommodation. As a result, off-plan property investment in Turkey offers investors an excellent return on their investment.
However, investing in off-plan property in Turkey can be risky. It is important to know the risks and remain within your budget. You also need to have back-up plans in case the construction time takes longer than expected. Additionally, consider moving into a temporary property before you purchase so that you can see the building before the final touches are completed.
One of the biggest risks associated with Turkish off-plan property investment is project freezing. This can affect the progress of construction during the approval and design stages. It can also happen if a construction company goes bankrupt. It’s impossible to predict which company will collapse, but the government of Turkey acts as a guarantor to protect investors’ investment. Furthermore, the government monitors real estate transactions to make sure they’re secure.
Turkish Property Investment – Taxes
In Turkey, taxes on property investment are based on various elements. While there are some stereotypical categories, each individual property is unique in value. Therefore, you should always check with a real estate consultant firm to find out the exact amount of tax payable on your Turkish property investment. The total amount of tax payable on your Turkish property investment will depend on the size of the property and the market conditions. However, the tax rates are generally fairly low.
Capital gains tax: In Turkey, if you sell your property within the first five years, you will have to pay tax on the capital gain. This tax is calculated on the difference between the original declared value of your property and its resale value. For example, if you sell your apartment in Turkey for 217,000 Lira after two years, you will have to pay a capital gains tax of 25% on the 17,000 Lira profit.
Stamp duty: Whether you are purchasing immovable or non-movable property, stamp duty is a common cost of buying Turkish property. This tax is usually split between the seller and buyer.
Turkish Property Investment – Interest rate
Turkish property prices are rising, and interest rates have been cut to a historic low. The interest rate on new homes is 0.64 percent, while that for resale homes is 0.74 percent. The banks have also cut the first payment down to 10% and have extended the payment period to 15 years. As a result, many Turkish citizens have been flocking to sales offices of real estate projects throughout Turkey and Istanbul in particular. These buyers have purchased properties at historically low rates, and this local turnout is likely to increase the price of these properties considerably.
The government also made it easier to become a Turkish citizen, easing some of the requirements for foreigners to purchase real estate in Turkey. For example, the government recently dropped the minimum level for its citizenship by investment scheme, reducing the amount of foreign currency that is needed to apply. It also made the application process easier by reducing the Land Registry fee, which is payable by both buyer and seller.
Turkish Property Investment and Foreign buyers
Buying a property in Turkey may seem like a daunting prospect, but there are many advantages of investing in a property in Turkey. Firstly, you can take your time to research the local market. Second, you can avoid dealing with developers who want to sell you a property before you’ve even started looking. Third, buying property in Turkey may be a good way to secure a rental income if you plan to rent out the property to tourists.
Property prices in Turkey are still affordable for foreign buyers. However, there are risks and regulations you need to be aware of. The country has recently introduced strict regulations aimed at protecting the money of international investors. These include a ban on military checks on foreign buyers and the requirement that estate agents have a license. Despite these regulations, you should still do due diligence on the property you wish to buy. You should also hire an independent solicitor to ensure that you’re investing in a safe and profitable investment. A solicitor will be able to document the financial transactions, the costs of purchase, and even sign the title deeds.
There are a variety of different types of properties for sale in Turkey. Foreign buyers can choose from luxury apartments and villas off-plan, renovated properties, and new-build and resale properties. There are also many options for beachside property and urban living. If you’re looking for a getaway from the hustle and bustle of city life, consider purchasing an apartment in Bursa.
Turkey’s large domestic market
Investing in Turkey’s large domestic market for property investment offers a host of options, including resale properties and investment properties. The resale market is particularly attractive to individual investors, as the properties are generally located in central areas with good public transport. Prime locations include Taksim, Sultanahmet, Kadikoy, and Megidovlat. These are good places to start if you’re a first-time investor. However, smaller properties, such as grocery stores, are often less profitable. A first real estate investment in Turkey can help investors test the waters, and larger projects are possible once they have proven themselves.
Real estate in Turkey has experienced a steady rise in prices in recent years, with prices rising around 20% a year. Buying and selling apartments and commercial properties is a good investment opportunity, as profit is usually sufficient to pay for the maintenance costs. In addition, there is a secondary market for inexpensive apartments in good condition. By refurbishing them, investors can increase the market value and improve living conditions for their tenants.
Developer’s mortgages are an excellent option for Turkish property investment. You can make an initial deposit of 30% of the property value, with the balance to be paid upon completion. If you buy off-plan, the developer will often offer the property at a price below market value. This is great for overseas investors looking for an attractive return.
The mortgage scheme will be available in Turkey from late 2006. This scheme allows investors to raise up to 80% of the property’s price. Mortgages are not available against unbuilt property, so it’s important to make sure that you’ll be able to complete the purchase. Mortgages for Turkish properties can be raised from overseas mortgage brokers.
Turkish developers offer developer’s mortgages with finance terms of up to 5 years. Typically, developers require a 30-35% deposit, with the remainder to be paid in monthly installments. In exchange for this, the interest rate on the mortgage is usually zero percent. Developer’s mortgages are a good option for foreign investors who don’t want to pay too much upfront.
Exchange rate on property investment
In today’s scenario, the currency of Turkey has declined and overseas homebuyers and real estate investors are trying to take advantage of the situation. The perception among these buyers is that the Lira has depreciated against major currencies, thus, the Turkish property prices should be decreasing, and, in foreign currency, they should be cheaper.
The real estate sector in Turkey is experiencing an expansion, which means that it is a good time for foreign investors to invest. However, the real estate sector has a very low profit margin. This is because of the high taxes and expenses related to the sale of property. As a result, investors must be patient to earn profits. It is important to know that the real estate market in Turkey has the highest potential for investment, and that foreigners will benefit most from it.
Most properties along Turkey’s Mediterranean and Aegean coasts are quoted in USD or Euro, though in some areas, the currency may be quoted in GBP as well. Developers take into account the build cost, land price, and asking price when setting the price of a property. It is essential to remember that the Turkish Lira has weakened against the USD and Euro in the past few years, and it is vital for foreign property investors to monitor the currency exchange rate.