Sell Property In Turkey: discover what only the top, expert property lawyer in Turkey know about sell property in turkey
Foreign individuals or companies who own real estate in Turkey may rent, sell or establish charges on the relevant property.
It is possible to make a transaction regarding the sale with two basic contracts which are sales contracts and real estate sales promise contracts. According to Turkish Law, the sale of real estate can be completed by the attendance of the seller and the buyer at the the Land Registry Office. For the transfer of ownership and completion of the purchase agreement, the transfer should be carried out by the relevant land registry officer.
In addition, before the sale of the real estate, the seller and the buyer can sign a “real estate sales promissory contract” which is a type of preliminary agreement. In order for this agreement to be binding, it must be prepared by a notary public and signed in the presence of a notary public and annotated to the land registry in order to be valid against the claims made by third parties.
The seller or seller’s representative may carry-out the sale of the real estate. However, if the transactions are to be carried out by a power of attorney, it must be prepared by and signed before the notary public.
As a rule, the powers of attorney issued abroad with an “Apostille” annotation in accordance with the Hague Convention of 1961, and the power of attorneys issued in a foreign country with the signature and authority of the foreign country notary which is approved by the Turkish Consulate in that country, are valid. However, in order for a power of attorney issued in a foreign country to be valid for transactions involving title deeds, it must be a power of attorney prepared by a Turkish consulate.
Taxes, Fees And Expenses
Every real estate acquisition is subject to some transaction taxes and costs such as “Title Deed Fee”, “Capital Gains Tax”, “Stamp Duty” and “Notary Charges”.
Gains on the disposal of real estate in Turkey as a result of the increase in value is taxed as income. It should not be forgotten that in the case of a real estate sale made by a foreign individual, if the real estate is disposed of less than 5 years following the purchase of it, the earnings obtained will be subject to income tax. However, earnings from real estate sold at the end of the 5-year holding period will not be subject to income tax.
The income obtained may be subject to different taxes and taxation conditions depending on the liability of the seller. In other words, if the transfer is carried out by a company: corporate tax; if it is carried out by an individual: income tax will be applied.
Turkey has double taxation prevention agreements with certain countries. In these agreements, it is regulated in which of the countries of residence and origin the income will be taxed or how the right to taxation will be shared between these two countries.
If there is an agreement to prevent double taxation between Turkey and the country of residence of foreign individuals who have capital gains, the provisions of the agreement will be applied. However, the provisions of the Turkish Income Tax Law will be applied in the absence of such an agreement.