Early this year 2019, foreigners wishing to purchase property in Turkey should acquire a real estate valuation report before signing for their title deeds. The adjustment in regulations, declared by the Turkish General Directorate of Land Registry and Cadastre (TKGM), came about after a pilot scheme in Istanbul effectively trialed the procedure.
Why Has Turkey Introduced This New Regulation?
Initially intended to be executed by 2022, Turkey brought the scheme forward to combat tax fraud and irregular valuing affirmations. In Turkey, the selling price of a property is announced on the title deeds, and starting now and onto the foreseeable future , that price will be the equivalent as the real estate valuation.
Apartment complexes are normal properties in Turkey and regularly sold with 30 units or more units in a single structure . On the off chance the construction company has pronounced lower prices for apartments already sold, the new system will signal irregularities leaving the construction company to confront questions by the tax man.
The new law likewise plans to ensure foreign real estate investors who are unaware of Turkey’s housing market tax system and frequently fall foul of large tax bills when they later sell the property on or purchase properties for more than they are worth.
The government is sure this new report will prevent irregularities in the housing pricing market, and lift Turkey’s brand name for foreign real estate investors.
Valuation Department and SPK Validated Experts
The official division responsible for issuing the reports is the Tasinmaz Degerleme Daire Baskanligi. For a fair countrywide system to be actualized, they are utilizing the same practices as used in other countries and will consistently publish reports and studies about the real estate valuation industry. Appraisals will be carried out by SPK Validated experts who agree to terms, conditions, and standards as outlined by the Capital Market Board of Turkey.
About the Real Estate Valuation Reports
Real estate valuation reports have a three-month legitimacy period in which if the purchaser cancels a sale, the seller can use the same appraisal report for another sale. With off-plan properties or homes in the construction stage, the valuation team will estimate the value at the time of completion.
Details recorded on a valuation report will coordinate those listed on title deeds, and incorporate however are not limited to area coordinates, prices of property within a certain radius, photos, any debt connected to the home, and confirmed acknowledgment by the Land Registry and Cadastre Directorate.
Need to Know for Turkey Property Buyers
The expense of the real estate valuation report is between 1000 to 2000TL, and payment must be made directly to the real estate valuation department with the TKGM. Estate agents are not allowed to take a commission on this payment or to advertise themselves as independent evaluators.
To prevent a conflict of interest, anybody engaged with the official procedure of valuing property or issuing the report isn’t permitted to own or be employed by an estate agent. The normal time frame for a report to be generated is six days for Istanbul provinces and three-four days for all other areas in Turkey.
At the time of legally taking ownership for the property, the title deeds office will likewise enter the real estate valuation report into their system, before returning it to the buyer. Across Turkey, there are about 140 officially verified SPK valuators, and we or your lawyer can provide you with a list of choices in the region you intend to purchase in.
Turkish Stamp Duty / Property Purchase Tax in Turkey
What is Turkish stamp duty on property ?
At whatever point a property sale happens in Turkey, stamp duty obligation is paid. On most occasions the property purchaser pays the full rate. On certain occasions however the purchaser and seller can split the full percentage. The sum is determined as a calculated amount of the selling cost.
The current property purchase Tax in Turkey is 3% this was presented by the government to encourage property sales and introduced in 2018 which did see a boost to Turkish property house sales along with the incentive of becoming a Turkish citizen when you own 250.000 USD worth of property in Turkey. The stamp duty current rate will come to an end at the end of December 2019 .
As in previous years in Turkey the stamp duty rate will return to and will again be set at a 4% property purchase Tax cost from the beginning of January 2020.