Property in Alanya. Ideal Estates, +90 532 777 4 777

SERVICES

CONSULTANCY

Let us assist you with your legal consultancy issues in Turkey

Consultancy in Preparing Purchasing Contracts

In accordance with Private Laws in Turkey, both buyers and sellers have the right to seek legal advice from a lawyer during contract signings. At Ideal Estates, we are pleased to facilitate this service for you. Our consultancy professionals will connect you with reputable and trustworthy lawyers who possess valuable experience in this field.

However, you are free to seek advice from a lawyer of your choice for consulting.

Drafting a Will for Inheritance

To underscore this, Turkey stands out as a prominent business and holiday destination globally. The process of purchasing real estate in Turkey has become notably streamlined since the enactment of new property laws in 2003, leading to an increased number of foreign buyers owning real estate in the country. Our consultancy services are designed to assist you at every step of this process.

In light of this, the question arises: “How should overseas investors go about preparing a testament or deposition of properties in Turkey in accordance with Turkish law?”?

Indeed, a testament allows you to dictate the distribution of your properties after your passing. For your testament to be valid and executed correctly, it must be in Turkish and prepared in accordance with Turkish laws and regulations.

For further information on this situation, don’t hesitate to contact our consulting lawyer.

There are two ways to prepare your testaments for foreigners living in Turkey:

  1. Handwritten
  2. Court of Notary Issued
To create a handwritten testament, follow these steps:
  • Introduction: Begin by stating that this document is your last will and testament. Include your full name, address, and the date of writing.
  • Declaration of Sound Mind: Clearly declare that you are of sound mind, fully aware of the contents of the testament, and making it willingly without any pressure.
  • Appointment of Executor: Designate an executor, the person responsible for carrying out the instructions in your testament. Provide their full name and contact details.
  • Distribution of Assets: Specify how you want your assets and properties to be distributed among your beneficiaries. Clearly name each beneficiary and describe their share or inheritance.
  • Guardianship for Minors: If you have minor children, designate a guardian who will take care of them in the event of your death. Include the guardian’s full name and contact details.
  • Funeral Arrangements: If you have specific preferences for your funeral or burial, outline them in the testament. This may include burial or cremation preferences, funeral ceremonies, etc.
  • Debts and Expenses: Address any outstanding debts, loans, or expenses. Specify how you want these obligations to be settled and from which assets.
  • Witnesses: A handwritten testament typically requires the signatures of at least two witnesses. Choose individuals who are not beneficiaries and have them sign the document. Include their full names and addresses.
  • Notary Public (Optional): While not always mandatory, having your handwritten testament notarized by a notary public can add an extra layer of validity. Consult local regulations for specific requirements.
  • Safe Storage: Keep the handwritten testament in a safe and accessible place. Inform your executor and close family members about its location.

Remember that legal requirements for handwritten testaments may vary by jurisdiction, so it’s advisable to seek legal advice to ensure compliance with local laws.

Issuing a Testament before a Turkish Court or Notary?

Formalize a testament with court or notary attestation for secure posthumous execution. Foreigners in Turkey can fulfill this with witnesses. It’s crucial for them to know that the state may claim properties without a successor, emphasizing professional assistance for secure processes.

Preparation of Wills and the transfer of property to heirs

Wills drafted by foreign nationals in their respective countries can be implemented in Turkey for the transfer of property ownership to the individual(s) specified in the Will.

To facilitate the property transfer in accordance with the Will, an heir must procure a court letter validating the Will from the relevant court in their home country and have it authenticated at the Turkish Consulate General. Subsequently, they need to submit this letter to the relevant court in the Turkish province where the property is situated. The Turkish Court then issues an official document authorizing the transfer.

Ultimately, the heir presents the document issued by the Court to the Tapu (Land Registry) Office, along with other necessary documents for the ownership transfer.

It’s important to note that the transfer of property ownership to an heir is subject to inheritance tax. Therefore, if the heir chooses to sell the inherited property, they are not liable for any personal income tax based on capital gains.

Inheritance 

In Turkey, you have the right to inherit earnings, property, rights, and debts. Equal inheritance rights exist for both genders. International Law applies to inheritance matters for individuals with different statuses in Turkey. For real estate inheritance, foreign investors must adhere to regulations. Consult a legal advisor for detailed inheritance law information.

Rights of inheritors for real estate acquired by foreign investors are protected in Turkey. Foreign individuals can inherit real estate, but citizenship restrictions apply. If the inheritor is not eligible, the property must be sold or disposed of to prevent confiscation.

The Ministry of Treasury allows one year to sell or dispose of real estate. Failure results in Ministry acquisition, with an appraised amount paid to the rightful holder.

For further information, please get in touch with our Lawyer

REAL ESTATE CONSULTANCY     

Ideal Estates’ team of real estate consultants specializes in transforming your complex real estate challenges into opportunities for growth. As leaders in development consultancy, feasibility studies, and real estate market analysis, we provide business owners, investors, lenders, and corporate groups with the expertise, knowledge, and strategic planning needed to make informed and profitable decisions.

Our consulting services encompass due diligence, market research, portfolio services, and leasing consulting, all aimed at enhancing the value of your investment. Leveraging cutting-edge technology and analytics, we generate profound and transformative insights in valuations (in collaboration with partners), due diligence, and portfolio optimisation. This approach empowers our clients to achieve successful outcomes and optimise their investments.

Through our Real Estate Consultancy app, companies can convert their critical and intricate real estate challenges into opportunities for growth, resilience, and long-term advantage. By comprehensively understanding the dynamics between asset valuation, capital markets, and the evolving real estate landscape, we provide clients with innovative ideas to enhance their results and navigate potential challenges. Our clients trust our expertise and experience to deliver forward-thinking insights that aid strategic planning and decision-making with confidence.

IDEAL Estates consultants conduct thorough market research in every region, collaborating with affiliates across Turkey to successfully execute comprehensive feasibility studies. We gather precise analyses and detailed reports from customers, investors, and government institutions.

TAXES AND INSURANCE CONSULTANCY

Basic property-related taxes

Concerning real estate in Turkey, the following taxes and insurance are compulsory:

  • Real Estate Acquisition and Purchase Tax (at the time of purchase or sale)
  • Earthquake insurance (a nationwide contribution rate is applied)
  • Property tax
  • Personal income tax (based on rental income and capital gains)
  • Inheritance and Succession tax
  • VAT (if a commercial delivery takes place)
  • Corporate tax (for company business transactions)

More information about the Turkish Revenue Administration of taxation can be found in the booklet prepared by the Presidency of Turkey.

Real Estate Sale and Acquisition Levy 

Each buyer and seller has to pay a real estate sale-and-acquisition levy of 2% based on the declared value of the asset (This value cannot be less than the threshold determined by authorities). It has to be paid before the transfer of ownership at the TAPU office.

Earthquake Insurance

Property has to be insured by the owner against earthquake risks. It is compulsory, and a national uniform tariff is applied. Other property insurance types are available, and they cover risks, including theft, fire, etc. For further information, please visit our insurance page.

Real Estate Tax Consultancy    

After successfully registering the property under your name at the municipality, an annual property tax is required. This tax is computed based on the declared value of the asset, which must not fall below the threshold determined by tax authorities.

The property tax is paid in two equal installments, scheduled for March-to-May and November each year, directly to the local government (municipality). Annually, the tax base undergoes an update through a coefficient determined by the Ministry of Finance, adjusted to the inflation rate.

The seller assumes responsibility for the property’s real estate tax in the acquisition year, while subsequent years’ taxes are the responsibility of the buyer, the new owner.

For additional details and payment options, it is recommended to reach out to your local council (Municipality). The tax calculation is based on the property’s value and is subject to thresholds established by the tax authorities as follows:

For real estate located outside of a metropolitan municipality:

Residences, Apartments               0.1%

Commercial Buildings                  0.2%

Plots (Construction Purpose)       0.3%

Agricultural Land                         0.1%

For real estate located inside of a metropolitan municipality:

Residences, Apartments                0.2%

Commercial Buildings                    0.4%

Plots (Construction Purpose)         0.6%

Lands                                               0.2%                          

 
Personal Income and Capital Gains tax Consultancy:
What earnings are gained through property investment? Are those gains taxable?

There is no distinction between foreign nationals and Turkish citizens regarding taxes or fees, with tax rates subject to periodic updates. Real estate ownership offers individuals the opportunity to gain income through two means.

Firstly, by renting out the property and earning rental income, individuals are obligated to pay personal income tax. In such cases, if the property is rented to an individual or a company, a tax return must be submitted to the nearest tax office for the previous calendar year, within the period from March 1 to March 25. Tax payments are made in two equal installments, with the first in March and the second in July.

Secondly, the market value of the asset may be appreciated, allowing individuals to realize a capital gain. If a property is sold within five years of the acquisition date, a capital gains tax is applicable based on the difference between the selling price and the inflation-adjusted acquisition price. No capital gains tax is imposed on sales by individuals occurring after 5 years following the purchase.

Inheritance and Succession Tax:

Turkish citizens and foreign individuals inheriting property in Turkey are liable to pay inheritance and transfer taxes. A taxpayer, in this context, refers to someone acquiring property through inheritance or receiving the property as a gift without charge.

Inheritance and gift taxes are computed based on the return submitted by the taxpayer.

For inheritance situations, the declaration must be submitted within four months from the date of death. In cases where the taxpayer is outside Turkey at the time of death, the return period is extended to six months. If the declaration is not related to a death and the taxpayer is absent from Turkey, the submission timeframe remains at four months. However, in instances where the death occurs in a foreign country and the taxpayer is in another country, the declaration period extends to eight months.

For property transfers made as gifts without charge, the declaration must be submitted within one month from the date of acquiring the property.

The tax base undergoes an annual update, with certain discounts applicable for inheritances to daughters, sons, and spouses.

It’s important to note that the transfer of property ownership to an heir is subject to inheritance tax. Consequently, if the heir decides to sell the inherited property, they are not liable for any personal income tax based on capital gains.

Corporate Tax:

A Turkey-based company is required to pay corporate tax calculated based on its business transactions.

Corporations with legal or business centers within Turkey are considered residents, and they are subject to taxation on their income generated in Turkey. In cases where both the legal and business centers are situated outside Turkey, these corporations are classified as non-residents and are only liable for taxation on income derived within Turkey.

Corporate Tax Rate: In Turkey, the corporate tax rate applied to business profits is 20%. However, for the tax periods of 2018, 2019, and 2020, the corporate tax rate increased to 22%. However, the President has the authority to reduce the 22% rate back to 20%.

VAT Tax  

In Turkey, the provision of goods and services, as well as the importation of such, is subject to value-added tax (VAT).

VAT liability is triggered when an individual or entity engages in commercial, industrial, agricultural, or independent professional activities within Turkey.

VAT rates range from 1% to 18%, with the standard rate set at 18%.

For the commercial sale of residential properties with a net area of up to 150 m2, a VAT rate of 1% is applicable. Conversely, sales of commercial properties exceeding 150 m2 are subject to a VAT rate of 18%.

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