Key considerations when buying real estate in Türkiye

Investing in real estate in Türkiye requires thorough due diligence, from verifying the title deed to assessing the building’s condition. Failing to do so may lead to financial losses and legal complications. Buyers should be aware of potential risks such as fraudulent sales, hidden legal restrictions, and tax implications. Here are some critical factors to consider before finalizing a purchase.

Verify title deed before buying real estate in Türkiye

One of the most important steps in purchasing property in Türkiye is ensuring that the title deed (tapu) is legally sound. The title deed should be registered as either floor easement (kat irtifaki) or condominium ownership (kat mulkiyeti). These types of deeds confirm that the property complies with zoning and construction regulations, making them suitable for obtaining residence permits and mortgage financing.

Avoid purchasing properties with a land deed (arsa tapusu) if you are looking for an apartment. Unlike a floor easement or condominium ownership deed, a land deed does not specify individual apartment numbers. This can lead to disputes over which unit actually belongs to the buyer.

To verify the authenticity of a property’s title deed, buyers should check the official Parcel Inquiry System (https://parselsorgu.tkgm.gov.tr/) to confirm that the property’s location matches the registered address.

Check for family housing annotation

If the title deed contains a family housing annotation (aile konutu serhi), additional legal precautions are necessary. This annotation indicates that the property is a family residence, meaning that both spouses must consent to its sale. To avoid legal complications, buyers should request a notarized written consent from the non-selling spouse or ensure that the annotation is removed before proceeding.

Naked ownership vs usufruct rights

Buyers must be cautious when purchasing properties with a naked ownership (ciplak mulkiyet) clause. Naked ownership means that the buyer acquires the legal title to the property but does not have the right to use, reside in, or lease it. The right to use and benefit from the property remains with the usufructuary (intifa hakki sahibi), who may retain these rights until their death or for a predetermined period.

Capital gains tax

Real estate sales in Türkiye may be subject to capital gains tax (Deger Artis Kazanci Vergisi), depending on the holding period of the property. If the seller has owned the property for less than five years, any profit from the sale is taxable under the Turkish Income Tax Law (193 Sayili Gelir Vergisi Kanunu).

Tax calculation:

• The tax applies to the difference between the adjusted purchase price and the selling price.
• The purchase price is adjusted for inflation based on the domestic producer price index (YI-UFE).
• Some costs, such as title deed fees, appraisal costs, and loan interest, can be deducted.
• For 2024, capital gains up to ₺87,000 (2,412.94) are tax-exempt.

Tax tates:

• ₺110,000 or less: 15%
• ₺110,001 to ₺230,000: 20%
• ₺230,001 to ₺580,000: 27%
• ₺580,001 to ₺3 million: 35%
• Over ₺3 million: 40%

If the property is sold after five years of ownership, no capital gains tax is due. Additionally, properties acquired through inheritance or donation are exempt from this tax.

Special considerations for sellers over 65

When buying a property from a seller who is over 65 years old, additional legal safeguards may be required. The Land Registry Office (Tapu Mudurlugu) may request a mental competency report (akli meleke raporu) to confirm that the seller is legally capable of making financial decisions.

Key points to consider:

• If the seller is deemed mentally unfit, a legal guardian may need to be appointed by the court before the transaction can proceed.
• If the selling price is significantly below market value, the seller’s heirs may challenge the sale in court under the doctrine of fraudulent conveyance (muris muvazaası).

Final due diligence checklist

Before finalizing a property purchase, buyers should conduct a comprehensive assessment, including:

• Structural and legal checks:
  – Does the building have sewage issues, roof leaks, or foundation corrosion?
  – Is the property compliant with municipal zoning laws?
  – Does the apartment have an energy performance certificate (EPC)?

• Urban renewal and earthquake risks:
  – Is the building at risk of demolition under urban renewal projects?
  – Does the building comply with earthquake resistance regulations?

• Neighborhood and lifestyle considerations:
  – Are the neighbors suitable for your lifestyle (e.g., noise levels, cultural differences)?
  – Is the area well-connected to public transportation and essential services?

Conclusion

Purchasing real estate in Türkiye is a significant investment that requires careful evaluation of legal, financial, and structural aspects. Title deed verification, legal restrictions, tax implications, and building conditions should all be assessed before committing to a purchase. Seeking assistance from real estate lawyers, surveyors, and financial advisors can help mitigate risks and ensure a smooth transaction. By conducting thorough due diligence, buyers can secure their investment and avoid potential legal disputes in the future.

In our forthcoming article, we shall elucidate the crucial factors to heed when acquiring an unconstructed apartment within a development project.

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About the author: Kagan Orhan is a human resources and immigration consultancy expert at “Expat Solutions Turkey”, dedicated to facilitating the adaptation processes of foreigners in Türkiye with the expertise and knowledge in managing legal procedures such as residence permit applications, work permits, business establishment, real estate and citizenship processes for foreigners settling in Türkiye with their team of lawyers and consultants.