Costs and Fees Involved in Property Purchase in Turkey
When purchasing property in Turkey, it is essential to be aware of the various costs and fees involved in the process. These expenses go beyond the property’s purchase price and include taxes, legal fees, notary fees, and other associated costs. Additionally, there are ongoing costs such as maintenance, service charges, and utility setup that need to be considered. Below is a detailed overview and breakdown of these costs.
1. Overview of Purchase Costs
- Property Purchase Tax (Tapu Harcı)
- Rate: The property purchase tax, known as Tapu Harcı, is calculated at 4% of the declared purchase price of the property. This tax is typically split equally between the buyer and seller, meaning each party pays 2%.
- Payment: The tax must be paid before the title deed transfer at the Land Registry Office.
- Value Added Tax (VAT) on Property Purchase
- Rate: VAT is applicable to new properties purchased directly from developers. The rate varies depending on the property size and price but generally ranges from 1% to 18%.
- Exemptions: Foreign buyers are often exempt from paying VAT if they meet certain conditions, such as making the payment in a foreign currency and committing not to sell the property for at least one year.
- Legal Fees
- Rate: Legal fees for hiring a real estate lawyer in Turkey typically range from 1% to 3% of the property’s purchase price. The fee may vary depending on the complexity of the transaction and the lawyer’s experience.
- Services: A real estate lawyer will assist with the legal due diligence, review contracts, ensure compliance with laws, and oversee the title deed transfer.
- Notary Fees
- Rate: Notary fees are required if you are granting a power of attorney or for certifying documents related to the property purchase. These fees usually range from €200 to €300, depending on the services required.
- Payment: Notary fees are paid directly to the notary public at the time of service.
- Property Valuation Report
- Cost: The cost of obtaining a property valuation report, which is mandatory for foreign buyers, typically ranges from €200 to €300. This report is required for the title deed application and ensures that the declared property value is accurate.
- Translator Fees
- Cost: If you do not speak Turkish, a sworn translator will be required during the title deed transfer process at the Land Registry Office. Translator fees are usually around €100 to €200.
2. Breakdown of Additional Costs
- Maintenance and Service Charges
- Rate: If you purchase a property in a residential complex or a building with shared facilities (e.g., swimming pool, gym, security), you will be responsible for paying monthly maintenance or service charges. These charges vary widely depending on the location, amenities, and the size of the property, but can range from €20 to €100 or more per month.
- Purpose: These fees cover the cost of maintaining common areas, security, landscaping, and other shared services.
- Utility Setup and Connection Fees
- Electricity and Water:
- Cost: Setting up utilities such as electricity and water in your name involves paying a connection fee, which is usually between €50 and €100 per utility.
- Deposits: In addition to connection fees, you may also be required to pay a refundable deposit, which varies depending on the provider.
- Natural Gas:
- Cost: If the property uses natural gas for heating, cooking, or hot water, you will need to pay a connection fee to set up the gas supply. This fee typically ranges from €100 to €200.
- Deposits: A deposit may also be required by the gas provider.
- Earthquake Insurance (DASK)
- Cost: Earthquake insurance (DASK) is mandatory in Turkey. The cost is relatively low and depends on the size and location of the property. Annual premiums typically range from €30 to €100.
- Coverage: DASK covers damages caused by earthquakes and related events, such as landslides or fires. It is a necessary requirement for obtaining utilities.
- Annual Property Tax (Emlak Vergisi)
- Rate: Property tax in Turkey is paid annually and is calculated as a percentage of the property’s assessed value. The rate is generally 0.2% for residential properties in metropolitan areas and 0.1% in non-metropolitan areas.
- Payment: This tax is payable to the local municipality and can be paid in two installments (usually in May and November).
- Home Insurance
- Cost: While optional, it is advisable to purchase home insurance to cover risks such as theft, fire, and water damage. Premiums vary depending on the coverage and the value of the property but typically range from €50 to €300 annually.
- Furniture and Renovation Costs
- Cost: If the property is unfurnished, you will need to budget for furniture and any desired renovations. The cost for furnishing a property can vary widely, from a few thousand euros for basic furnishings to much more for high-end or custom items.
- Real Estate Agent’s Commission
- Rate: If you use a real estate agent to help find and purchase a property, the agent’s commission is typically 3% of the purchase price. This commission is usually paid by the buyer.
The costs and fees associated with purchasing property in Turkey extend beyond the purchase price itself. It is essential to budget for these additional expenses, including taxes, legal fees, notary fees, and ongoing costs such as maintenance charges and utility setup. Understanding these costs upfront will help ensure a smooth and financially manageable property purchase process in Turkey.