Real Estate Law In Turkey: What Buyers and Sellers Need to Know

Turkey is a popular destination for real estate investment, with a diverse range of properties available for both local and foreign buyers. However, like any real estate market, there are legal considerations that buyers and sellers need to be aware of when purchasing or selling property in Turkey. In this article, we’ll take a closer look at the legal framework for real estate transactions in Turkey, including property ownership, taxes, and legal disputes.

Property Ownership in Turkey

One of the key legal considerations for property buyers in Turkey is property ownership. In Turkey, there are two types of property ownership: freehold and leasehold. Freehold ownership is the most common type of ownership in Turkey, and grants the owner full ownership rights over the property, including the right to sell, lease, or transfer the property to another party.

Leasehold ownership, on the other hand, grants the owner a lease on the property for a specific period of time, after which the property reverts to the original owner. Leasehold ownership is less common in Turkey, and is typically used for commercial properties or properties with long-term rental agreements.

Foreign buyers are allowed to purchase freehold property in Turkey, but there are certain restrictions and requirements that they must comply with. For example, foreign buyers are required to obtain a military clearance certificate before purchasing property in Turkey, and are limited to purchasing a maximum of 30 hectares of land.

Taxes on Property Transactions in Turkey

In addition to property ownership, there are also taxes that buyers and sellers need to be aware of when purchasing or selling property in Turkey. The most common taxes on property transactions in Turkey include:

1. Title deed fees: These are fees paid to the Land Registry Office when transferring ownership of a property. The fees are calculated based on the sale price of the property, and typically range from 3-4% of the sale price.
2. Value-added tax (VAT): VAT is levied on the sale of new properties in Turkey, and is typically calculated at a rate of 18% of the sale price.
3. Property tax: This is an annual tax paid on the value of the property, and is typically calculated at a rate of 0.1-0.3% of the property’s assessed value.
4. Capital gains tax: This is a tax on the profit made from selling a property, and is typically calculated at a rate of 15-35% of the profit made from the sale.

Legal Disputes in Real Estate Transactions

Like any real estate market, there is always the potential for legal disputes to arise in real estate transactions in Turkey. Some of the most common legal disputes in real estate transactions in Turkey include:

1. Contract disputes: These can arise when there is a disagreement between the buyer and seller over the terms of the purchase agreement, such as the purchase price or the date of completion.
2. Title disputes: These can arise when there is a dispute over ownership of the property, such as when there are multiple claims to ownership or when the property has been illegally occupied.
3. Construction disputes: These can arise when there is a dispute over the quality of the construction or when there are defects in the property that were not disclosed by the seller.
4. Disputes over real estate agents : These can arise when there is a dispute over the commission paid to the real estate agent or when there is a disagreement over the role of the real estate agent in the transaction.

To minimize the risk of legal disputes in real estate transactions in Turkey, it is important for both buyers and sellers to work with experienced legal professionals who are familiar with the Turkish legal system and can help ensure that