Property Management in Turkey requires full-fledged assistance by investment lawyers and real estate experts. Investors should analyze properly and timely all necessities and options.
Introduction
The Turkish property market covers a huge environment from West to East. This article will shed light on all necessary steps before and beyond owning a property.
Is Türkiye good for business?
The strengthening rates of foreign currencies, the development of capital markets, and ever increasing youth population makes Turkey a more popular and attractive investment area for foreign direct investments. Besides, several Turkish companies are interested in growing their business and extending their investments inside or outside the country. Business lawyers play a crucial role in growing businesses of foreign and domestic investors.
Regarding different investment advice and opportunities, you can take a look at our investment practice areas.
What is the role of the real estate sector for doing business in Turkey?
The property purchase is of great importance in navigating any investment project for foreigners or Turkish citizens. Owning a property is considered as a golden gate for the residence permit and or citizenship for foreigners.
For more information you can take a look at our articles on
Overview of the property management in Turkey for Foreign Investors?
Property management in Turkey for foreign investors contains a wide range of tasks including but not limited to the
- Due diligence,
- Checking clearances,
- Safe transfer of title deed to the new owner,
- Property maintenance,
- Renant screening,
- Rent collection and ongoing legal compliance.
An estate management requires the acquisition of commercial property such as shops and hotels and|or residential property such as houses. Therefore, property management is a type of process of supervising and maintaining a property on behalf of the tenant following the provision of the title deed. A proper property management requires an end-to-end expertise for contract law, tenancy law, real estate law, law of obligations, tax law.
Requirements for the Property Management in Turkey for Foreigners Before the Property Ownership
There are critical pre-conditions to buy a property in Turkey including the issuance of TAX ID and opening a bank account. We should underline at this juncture that buying a property does not depend upon having a residency in Turkey.
Provision of TAX ID
There are critical jobs that need to be done before purchasing a property in Turkey by foreigners. The first thing is to make an application for the provision of a TAX ID. Without any TAX ID, foreigners cannot make any progress about their investment models including the property purchase.
Opening a Bank Account
To transfer the amount of property in the most suitable manner, an account may be very helpful to facilitate the procedure. Indeed in practice, sellers and buyers really wish to make an exchange between title deed and money transfer simultaneously before the Land Registry.
Finding Suitable Property Compatible with Investment Plan
Property Management in Turkey for Foreigners involves property search to find a suitable house compatible with investment models. The amount, the type and amount of the property should be calibrated according to the profile of the investment model. For instance, despite that there is no minimum or maximum level for purchasing a house just for an investment, if the concerned foreigner is interested in a residence permit, the amount of the property should be over 200K. In addition to that, the zone should not be closed by the Ministry of Interior for the provision of a residence permit.
Carrying Out Due Diligence and Checking Clearances
After finding the most suitable option, online and physical recordings of the title should be scrutinized by the candidate buyer if everything is fine to buy. For instance if there is any kind of annotation on the candidate property arising from a debt, without paying that amount, the title deed cannot be transferred by the Land Registry [Tapu Müdürlüğü in Turkish].
In particular, the ownership should be verified through state sources including Land Registry Recordings. It is concerning to share that the Pi Legal Consultancy Dispute Resolution Working Group currently spends a lot of energy for some of pending fraudulent cases for our Clients who previously tried to buy a property without checking out who is the real owner.
Drafting the Contract and Managing the Transfer through Banking Account
In terms of sale contracts, under Article 237 of Turkish Code of Obligations [Numbered 6098], sale contracts for real estate must be formally prepared and signed. Formal type may be proven any pre-sale contract before notaries and|or Land Registry Offices. In the lack of these requirements, sale contracts cannot be regarded as legally binding to third parties and national authorities. It means that sale contracts are not suitable for providing the ownership of relevant lands.
Legal compliance of a proper lease agreement can be only possible in the light of effective and timely legal guidance.
The contract should be drafted carefully for the property management for foreigners. There are numerous property disputes in Turkey arising from foreigners and landlords in Turkey. Therefore, the contract terms must be carefully and transparently prepared. After the contract, it should be executed as soon as possible through sending the transfer of the property price to the owner through a banking branch.
After the Provision of Title Deed
Taxation Payment Obligations
After obtaining TAX ID, you should complete taxation procedures for the property. Annual property tax rates in Turkey vary depending on the type and location of the property. For residential properties, the rates range from 0.1% to 0.2%, while for commercial properties, they range from 0.2% to 0.4%. Higher rates apply to properties located within metropolitan municipalities.
Besides, despite that only %2 is the part of buyer obligation under Turkish legal framework, a one-time title deed transfer tax of 4% [tapu harcı in Turkish] of the declared property value is payable upon acquisition. Although this tax is legally shared between the buyer and the seller, in practice it is often borne entirely by the buyer.
What is meant by property management in Turkey for foreigners?
In a nutshell, even Turkish property owners find real estate law very complex. When it comes to foreign investors, regional regulatory nuances and language-based troubles make the picture so complicated. It necessarily follows that being a landlord presents a challenging field for people living abroad. Therefore, a full-fledged real estate legal assistance must be a first step within the context of professional real estate management. Such help must ensure preserving the rights of owner, improving contractual relationship with tenants on behalf of landlords as well as the performance of daily and|or monthly obligations.
Partner with our experienced Turkish citizenship law firm for expert legal assistance in obtaining Turkish citizenship
How much is property tax for the proper property management in Turkey?
The tax rates for residence buildings are between 0.1% and 2 and between 0.2% and 0.4% for other buildings. Additionally, property tax is paid by %4 of the value of the property.
For a comprehensive analysis of Turkish tax system, check out our article on Tax Guide
What is meant by property management in Turkey for foreigners?
In a nutshell, even Turkish property owners find real estate law very complex. When it comes to foreign investors, regional regulatory nuances and language-based troubles make the picture so complicated. It necessarily follows that being a landlord presents a challenging field for people living abroad. Therefore, a full-fledged real estate legal assistance must be a first step within the context of professional real estate management. Such help must ensure preserving the rights of owner, improving contractual relationship with tenants on behalf of landlords as well as the performance of daily and|or monthly obligations.
You can also read our article titled Conveyancing Lawyer in Turkey that we have previously written.
What are significant obligations for a real estate contract?
In terms of sale contracts, under Article 237 of Turkish Code of Obligations [Numbered 6098], sale contracts for real estate must be formally prepared and signed. Formal type may be proven any pre-sale contract before notaries and|or Land Registry Offices. In the lack of these requirements, sale contracts cannot be regarded as legally binding to third parties and national authorities. It means that sale contracts are not suitable for providing the ownership of relevant lands.
Concerning further obligations, take a look at our article on Contract Law
Legal compliance of a proper lease agreement can be only possible in the light of effective and timely legal guidance.
Conclusion
In the light of the foregoing, it is worth underlining that a genuine property management should involve all previous and follow-up steps including due diligence and checking clearances for safe transfer of title deed, optimization of rental income, protection of the rights of landlord, maintenance of property value, tax consultation, ongoing legal compliance advice. The assistance of real estate experts and real estate lawyers are found very beneficial by foreigners.
Pi Legal Consultancy work can cover all below-mentioned stages:
- Issuance of TAX ID
- Opening bank account
- Property acquisition
- Due diligence
- Purchase contract drafting
- Tenant sourcing
- Lease drafting
- Rent collection
- Maintenance
- Legal dispute handling
- Fraud risk mitigation
- Contract drafting
- Dispute settlement
