Choosing real estate in Turkey requires a balanced approach to assessing the associated financial expenses. These expenses include not only the initial purchase costs, but also the subsequent maintenance costs and possible taxes upon sale.
Expenses When Buying Real Estate
Purchasing real estate incurs the following expenses:
- Registration fee of 1% of the cadastral value.
- Title deed transfer tax – 4%, usually split between buyer and seller.
- Real estate agent commissions – from 2 to 5% of the transaction value.
- VAT, ranging from 1 to 18%, depending on the property type and area.
- Additional expenses include notarizing the contract, obtaining the technical passport (ISKAN), and compulsory earthquake insurance (DASK).
Expenses When Selling
Sellers of real estate face a capital gains tax if the property has been owned for less than 5 years. The tax is calculated as the difference between the cadastral values at purchase and sale, with a progressive rate from 15 to 35% for individuals.
Ongoing Maintenance Expenses
Annual expenses include:
- Property tax of 0.1-0.3% (and 0.2-0.6% in major cities).
- Earthquake insurance and utility bills, which vary depending on the location and size of the property.
Rental Expenses
Owners renting out properties must include rental income in their overall taxable income. Income tax in Turkey has a progressive rate of up to 40%.
Additional Tips When Buying Real Estate in Turkey
In addition to the expenses mentioned above, you should also consider other potential costs such as:
- Legal due diligence costs for the property documents.
- Repair and maintenance costs for the property.
- Possible management and service fees in residential complexes.
Carefully analyzing and planning these expenses will help optimize the overall cost of owning real estate in Turkey, as well as provide a clearer picture of the profitability of investments in this region.