Türkiye has increasingly become a magnet for expats looking to invest in property. With its alluring blend of vibrant culture, historical richness, and stunning landscapes, Türkiye offers more than just a strategic location. For expats, the country presents a unique mix of lifestyle opportunities coupled with potentially lucrative investment prospects.
Why Türkiye
Thanks to its central location between East and West, Türkiye offers a unique blend of both cultures, making it an increasingly popular destination for expatriates considering property investment. The country's appeal extends far beyond its geographical significance, presenting numerous advantages for those looking to purchase property.
Let's start with the practicalities. Purchasing property valued at over USD 400,000 makes you eligible for Turkish citizenship while buying real estate valued over USD 200,000 will give you grounds to apply for a residence permit.
Be aware that the Turkish government has recently announced plans to increase the minimum real estate value that would qualify you for Turkish citizenship to USD 600,000.
Conditions for buying property in Turkey
The growing interest in Turkish property among foreign investors is driven not only by the potential for personal use but also by the investment and rental opportunities it presents. The tourism sector's growth, coupled with a burgeoning expatriate community, has led to a high demand for rental properties, making it an attractive option for investors seeking regular income streams.
Türkiye's real estate market has been showing signs of steady growth, with a surge in demand for both residential and commercial properties. The market offers a wide range of options, from luxury seafront villas to modern urban apartments catering to diverse tastes and budgets. The cost of property in Türkiye remains competitive compared to other popular expat destinations, offering value for money and potential for capital appreciation.
Important:
In 2023, Türkiye introduced new legislation that requires homeowners to obtain a permit if they plan to use their houses for short-term rent to tourists (for instance, to rent your property on Airbnb). According to the new regulations, if you plan to rent out property to tourists, you will need to apply to the Ministry of Tourism for a permit. The application can be approved within three months; otherwise, you will not be able to rent out your property. Moreover, those who own apartments or villas in gated communities will need to make a communal decision on whether they should apply for a short-term rental permit. Applying for the permit will affect the sales tax for all properties.
If you are considering buying property in Türkiye with the intention of relocating, you may be pleased to know that expats in the country enjoy a generally high quality of life, with access to excellent healthcare, education, and leisure facilities. The cultural diversity is especially evident in major cities like Istanbul, Ankara, and Izmir, where ancient architecture coexists with contemporary living spaces.
Tukey's climate is as varied as its landscape, ranging from Mediterranean warmth in the coastal regions to more temperate climates in the inland areas. This diversity offers a living experience for every preference, whether it's the sun-drenched beaches of the Aegean and Mediterranean coasts or the cooler, verdant Black Sea region. The country's natural beauty, including its stunning beaches, mountains, and historical sites, adds to its allure as a place to live and invest in property.
Understanding the Turkish real estate market
Türkiye's real estate market has been experiencing significant transformation in recent years.
Since the beginning of the Russo-Ukrainian war in February 2022, Türkiye, especially its major cities and coastal areas, have experienced a large influx of immigrants from both countries, which has significantly affected the prices as well as the availability of property in popular areas in Türkiye.
In fact, in 2022, Russian nationals bought a record number of homes in Türkiye - over 16,000. In 2023, the rush of foreign buyers to acquire property in Türkiye has somewhat slowed down. By the end of the year, Türkiye experienced a significant decline in home purchases by foreign buyers, dropping by 46.1%.
Despite the decline in property purchases, one of the key trends in the Turkish real estate market is the increasing demand for modern, luxurious residential properties, particularly in metropolitan areas and along the coast. This demand is driven by both domestic buyers and an influx of foreign investors attracted by Türkiye's lifestyle, climate, and investment opportunities.
The market is also witnessing a growing interest in sustainable and environmentally friendly properties. Developers are focusing more on green buildings, energy-efficient designs, and incorporating natural elements into urban living spaces. This shift towards sustainability reflects a global trend and caters to the growing awareness of environmental issues among buyers.
Popular areas in Türkiye for buying property as an expat
Where you choose to buy property in Türkiye will be guided by many personal factors. However, there are some areas that expats in Türkiye often prefer when it comes to real estate purchases.
The Aegean and Mediterranean coasts are particularly popular, with areas like Bodrum, Antalya, and Fethiye drawing significant interest. These regions offer a pleasant climate, beautiful beaches, and a relaxed lifestyle, making them ideal for holiday homes or retirement living. Another factor here is that a lot of these areas have an active and established expat community that is conducive to building a community and feeling more "at home" in the long term.
Istanbul, the country's largest city and economic hub, is also a top choice for those seeking a vibrant urban lifestyle. Ankara, the capital, and Izmir, with its Mediterranean climate and culture, are also popular among expats for their combination of modern living and cultural richness.
Areas such as Bursa and Yalova are emerging as attractive real estate markets. These regions are gaining popularity due to their lower property prices compared to major cities, natural beauty, and potential for development.
Good to know:
The Turkish real estate market is sensitive to both national and global economic and political shifts. The value of the Turkish Lira, inflation rates, and interest rates can significantly impact property prices. For instance, a weaker Lira may make real estate more affordable for foreign investors dealing in stronger currencies, but it can also lead to increased costs for local buyers.
Political stability and government policies, such as the Citizenship by Investment program or regulations around foreign property ownership, also play a crucial role in shaping the market. These policies can either encourage or deter foreign investment in the Turkish real estate sector.
In recent years, Türkiye has experienced economic challenges, including inflation and currency fluctuations. However, the real estate market has shown resilience, with continued foreign investment and a steady interest in property acquisition, both for personal use and investment purposes.
The legal framework for buying property in Türkiye as a foreigner
Foreign citizens can legally buy property in Türkiye — and such practices are even encouraged by the Turkish government via programs like Citizenship and Residency by Investment.
With that, purchasing property in Türkiye as a foreign buyer involves navigating a specific legal framework that may differ substantially from what you are used to back home. Understanding these legal requirements and restrictions is crucial to avoid potential pitfalls.
Here are several key things you need to be aware of:
- Most foreign nationals are eligible to buy property in Türkiye, but there are exceptions based on reciprocity and specific national regulations. It's important to verify your eligibility before initiating any property transaction.
- There are limitations on where foreigners can purchase property, particularly near military zones or in rural areas. A check is conducted by the Turkish military to ensure the property isn't located in such restricted areas.
- Foreigners are restricted in terms of the total amount of land they can own in Türkiye, which currently stands at 30 hectares per individual across the country, and no more than 10% of the land in any designated town area.
- If you are purchasing property to apply for Turkish residency or citizenship, keep in mind that buying or renting property in certain areas may not make you eligible for residency and citizenship applications. This is often the case when a large number of properties in the area are already in foreign ownership. Make sure to check with the local immigration office about any area limitations when it comes to residence and citizenship applications.
Deeds, permits, and other documents for purchasing property in Türkiye
The most important document in the process of purchasing property in Türkiye is your property deed known as 'Tapu'. You will also be using this document when applying for residency or citizenship in the country. This is why it's essential that you check the Tapu carefully, ensuring there are no encumbrances, liens, or mortgages on the property.
You will also need to arrange for a government-accredited expert to conduct a valuation of the property to determine its market value. This report is essential for the title deed transfer.
A valid passport and Turkish tax number are required for all foreign buyers.
Keep in mind that all property transactions involving foreign buyers are subject to government scrutiny, primarily to validate the legality of the sale and compliance with Turkish laws.
If you feel unsure about certain elements of the transaction or don't speak Turkish, it is strongly advised that you work with a professional agency to guide you through the property-buying process. They provide access to listings, assist in negotiations, and often offer services in various languages.
The property buying process in Türkiye
Buying property in Türkiye involves several steps, from the initial search to the final acquisition. Here's a brief overview of this process:
- Begin by researching properties online. Spend some time researching property websites like Sahibinden and Hepsiemlak. Consider factors like location, amenities, and budget.
- Engage a local real estate agent for in-depth market knowledge and a lawyer for legal procedures. Their expertise is invaluable in navigating the Turkish property market.
- Arrange visits to shortlisted properties. Consider a professional inspection to check for any structural or legal issues.
- Once you find a suitable property, negotiate the price. Your agent can guide you through this process, ensuring you get a fair deal.
- Often, a contract is signed, and a deposit is paid to secure the property. This step formalizes your intent to purchase.
- Obtain an official valuation report as required by Turkish law.
- The final step involves transferring the title deed ('Tapu') into your name. This process is done at the local Land Registry Office and includes paying the necessary fees and taxes.
Real estate taxes in Türkiye
Buying property in Türkiye means that you will be subject to certain taxes and fees. Understanding these fiscal responsibilities is crucial to avoid unexpected costs and legal complications.
Expats buying property in Türkiye are subject to a property acquisition tax. As of April 2023, this tax is generally levied at a rate of 4% of the declared value of the property. However, this rate can be subject to change, so it's important to verify the current rate at the time of purchase. Note that this tax is usually split equally between the buyer and the seller unless negotiated differently in the sale agreement. It is paid at the time of the title deed transfer.
The declared value of the property for tax purposes should be at least equal to the value assessed by the government for that property. It's crucial that this declared value is accurate to avoid legal issues or penalties for under-declaration.
In addition to the acquisition tax, property owners in Türkiye are also liable for an annual property tax. The rates vary depending on the type and location of the property: For residential properties, the rate is generally 0.1% to 0.2% of the property's assessed value. For commercial properties, the rate can be higher, around 0.2% to 0.4%. This tax is paid annually to the local municipal office where the property is located.
VAT (value-added tax) applies to the sale of new properties in Türkiye. The rate can vary from 1% to 18%, depending on the size and location of the property.
Good to know:
Foreign buyers may be exempt from VAT if they meet certain conditions, such as not residing in Türkiye and making the property purchase in foreign currency. However, these regulations can change, so it's important to consult with a legal expert to understand the current rules.
Other potential fees and expenses related to buying property in Türkiye
Besides taxes, there are also legal fees and, if used, real estate agent fees. These are generally a percentage of the property price and should be factored into the overall budget.
If you sell your property within five years of purchase, you may be subject to capital gains tax on any profit made. However, properties held for more than five years are typically exempt from this tax.
Good to know:
If you plan to buy property in Türkiye with the purpose of renting it, you should be aware of the new law that is about to come into effect. The new law requires owners to first apply for a short-term rental license before being able to list their property on short-term rental platforms. Moreover, if you own property in a residential complex, note that all homeowners in the residential complex must sign a written agreement that properties in the complex will be available for short-term rent. The consequence of signing this agreement will be that the market value of the properties in question will be increased by 50%. As the law is still new, it may be affected by a variety of changes — so make sure to check with the local authorities before making any long-term decisions.
We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
