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FAQ Turkey Property InvestmentsThis page on our Turkey Property site is dedicated to queries raised by clients and our detailed responses, mainly with regards purchasing property in Turkey, Turkish property law and Turkey property legal framework. Since we took our time to respond carefully, we thought we should share the same with our readers and potential Turkish property buyers.18 Dec 2007, Chris Paddock - Turkish Income Tax on Interest earned on YTL account Cameron Hi Chris If you have an income of say YTL100,000, then it will be taxed as follows
So your calculation is nearly accurate. I think you mis-calculated the sums somewhere but got the concept right. Basically, if a tax haven account gives you as a minimum of 17% x (100-29.8%) = 12%, then it is worth it. I believe off shore accounts actually give about 15% on YTL. If you are UK resident, then you will also be taxed in the UK, however, there is double tax relief between UK and TR hence it will only be at top slice. Provided you are a 40% tax payer in the UK, then your overseas income is likely to be assessed at that rate, therefore there will be some further tax payable in the UK. If this is indeed the case, then it will be wise not to transfer earnings to the UK at all. Here is an idea for you. You know the Bargylia project I emailed you below. You can put down 30% of that after contract and convert GBP into YTL for 60% of the balance. This leaves you with 10% unaccounted. Your YTL investment will grow in 12 months with compound interest and provide for the balance. In GBP terms you will purchase 100% of the property with just under 90% cash. Food for thought! Chris Hi, Thanks for the tax figures although I am not absolutely clear on them. As I understand them, if a person had an income of say 100,000 YTL then the first 43,000 would attract tax of 9,905 leaving 33,095 and the remaining 57,000 would be taxed at 35% leaving 37,050 and a net total of 70,145 . Would this be correct. Regards Chris Cameron Hi Chris. Nice to hear from you. Yes indeed the interest rates on YTL are gradually coming down. One way of avoiding income tax on interest is to open a YTL account in say Luxemburg or a haven like that. I can arrange that for you if you wish. For Turkish income tax table please refer to the attached file. I hope this is self explanatory. Regarding Turkish properties, please let me know when you are ready to make a move and we can analyse your requirements in line with different regions available. Hope to speak to you soon. By the way the Bodrum Bargylia deal below is a smashing one if you are interested. Please click on Private Beach Turnkey 3 Bedroom 2 Bathroom Golf Properties in Bodrum Bargylia Move in Now and Pay Later... Chris Hello Cameron, How are you? Thanks for the email, we are still looking for a place in Turkey and hope to go over in the new year. I wonder if you can help me.........I understand the interest rate is 17%, can you tell me how much the government taxes money earned on interest rates. Regards Chris Kirsty - Query about investment regions in Turkey Many thanks for your kind e-mail. Turkey is indeed delivering very exciting investment returns. If we are looking at maximizing rental income, say in the next 5 years, with a view to selling on thereafter for handsome capital growth, then I would advise as follows:
STARR tips for investors seeking steep capital appreciation Stay small and exclusive, keep away from large compounds with over 100 units, no matter how appealing it may look, its all marketing! These days most investors are buying with a view to turning around their investments on completion. This means you will have a large stock of identical products on the market at the same time disabling you from realizing maximum capital appreciation. Target premium locations rather than ones that are sold on a promise. If you are investing in a resort like Bodrum, try to stay within Bodrum peninsula rather than Tuzla etc for this is and will be the most premium area going forward due to scarcity of supply and small development plots available. Acquire at the sea front, front line if possible. Reserve penthouses rather than apartments Resist extensive marketing. If you see a project marketed in more than 3 web sites, then it is already yesterdays news, all best plots have been reserved and whats left is what we call the dogs (sad but true) Steve Adams - Query about Key Factors to consider when investing in Bodrum property and Turkey property investments in general Dear Steve Many thanks for your valued enquiry regarding our Bodrum investments and mortgages. Although the subject is certainly rather comprehensive and we would not be doing it any justice via e-mail alone, I would at this stage advise as follows (I am assuming that you are looking for a high ROI investment judging from the properties you selected) Keep away from any development with over 100 units. These days most investors are buying with a view to turning around their investments on completion. This means you will have a large stock of identical products on the market at the same time disabling you from realizing maximum capital appreciation. Try to stay within Bodrum peninsula rather than Tuzla etc for this is and will be the most premium area going forward due to scarcity of supply and small development plots available. Get as close as possible to the sea front, front line if possible. Try to purchase penthouses rather than apartments We have managed to deliver capital growth of up to 70% in one year. This is rather exceptional, however, with careful selection, still achievable. The idea is to find an exclusive project, which is not in the hands of large property agents, at premium locations, and reserve the most attractive units, which in time will create a price gap in the market. Mortgages are not straight forward in Turkey. It is certainly not like your high street lender in the UK extending finance based on a standard credit check. On paper 75% mortgages are available on completed projects in Turkey in GBP or Euros, usually fixed for 3 years and then variable. Current rates are c7%. There are several lenders, who are willing to finance off plan projects, however, these are rare and far in between, we do have several in Bodrum, which I shall list below. Please see below my list of recommendations in Bodrum. Please review and the same and let me have your feedback, ideally over the phone. You can reach me on 020 8361 4231. Should you wish to visit Bodrum and view our portfolio, please note that we will be happy to organize a subsidized viewing trip for you at your convenience. Our viewing trips cost 99 and are refundable after purchase. Place Overseas is a UK firm with local offices in various parts of Turkey including Bodrum. Our Turkey property price watch ensures we deliver honestly priced properties at most competitive prices. Please refer to our TURKEY PROPERTY PURCHASE PROCESS and our TURKEY PROPERTY INSPECTION TRIPS. You may also wish to focus on Our Top Capital Accelerators in Bodrum as of 24 Aug 07 Mervyn Patton 27 August 2007 - Queries about resale potential of Turkish properties and general return on investment on Turkish property. Hi Mervyn Many thanks for your kind feedback. Please see below my notes to your e-mail of 27 August. Hi Cameron Just back from a business trip to Ankara. Would have an interest in Antalya area and have never visited it or any other part of turkey for that matter ( apart from Ankara) Antalya region, having the longest summers and a major city at the centre, has rather high rental potential. Therefore I would focus you on this region as opposed to Bodrum etc. The bottom line has to be finance. I would look at 2 bedroom attractive apartments under 70k. This hopefully will exert minimum pressure and also give you ability to pay over 12 months. Regarding acquiring a mortgage in Turkey, I would advise against it. Try to raise finance in the UK, it will be more stable and cheaper and also you will get a result within 1 month as opposed to a very long approval process in Turkey Not wanting a burden. At the same time need to know about rental potential ie as in how many weeks per year could one reasonably expect. Please refer to TURKEY PROPERTY PURCHASE PROCESS on our web site and scroll down to the bottom of the page. There you will find a word document explaining purchasing process and expected return on investment. I believe this will help. How much rental income. What is resale market really like. Looks like too many new properties for a good resale market at the moment. Would be concerned that in five years time might have problems reselling at a reasonable profit. By the way five years is just a figure plucked out of my head. I don't envisage living there but can envisage family holiday trips in summer and winter (skiing). Bit concerned if there was a finance crisis at home that i might not be able to sell within a reasonable amount of time. Who knows whats around the corner - might win the lottery. There is an expression nothing ventured nothing gained if we are to take the worst case scenario, then financial crises and recessions can happen anywhere in the world such as the big recession of the 90s in the UK, where a lot of people went into negative equity!! I think one should bear in mind that Turkey is a fast developing country and economic indicators have been pretty stable and upwards over the recent years. I believe these trends will continue. Please refer to Turkey Property Market Sector Analysis The resale market is not yet very strong you are right, this is pretty typical of emerging property markets. In the long terms, you will have a strong resale market too for what people are building on now are premium locations. However, if you are looking for a short to medium terms investment, then we have to talk about different projects, where we can get you in at pre-launch price levels so that you can sell on prior to completion. I can earn you up to 35%-40% capital growth in 18 months, however, this is a different strategy all-together. Please click on 2 Bedroom 2 Bathroom Seafront Residences near Port Bodrum Yalikavak at Pre Launch Prices 7% Rental Guarantee & Buy Back Option to review one such project. Does one own the ground rent ? Yes, most properties are freehold, hence you would own the ground rent I live near Belfast so how would a site visit go ? How many people can go out ? You will provide us with suitable dates for a viewing trip, we will then put together a custom-made package for you including flights, accommodation, airport transfers and of course services of our local consultants. We would fly you out from your nearest airport. Our viewing trips usually last 3-5 days and are very competitively priced. Our trips are for 2 people visiting. I hope this helps Best Regards Cameron Deggin Chris Ferrisson - 6 August 2007 - Question regarding investment potential of Turkey versus North Cyprus Dear Chris, Many thanks for seeking our advice on investment opportunities in North Cyprus and Turkey. Indeed both North Cyprus and Turkey are perceived as prime property investment destinations. Prices are currently very favourable, economic indicators are positive and existing legal infrastructure fully supports and encourages foreign investment. Most investors aim to take advantage of increasing property prices in some shape or form so as to realize healthy capital appreciations. Rental yields for attractive properties tend to be at least couple of percentage points higher than the average achieved in the UK. Most investors tend to organize their affairs in such a way that the rental income pays for the incremental finance costs and running costs therefore paving the way for capital growth to be the main incentive. In our experience over the last 3-4 years, we have seen larger capital growth and therefore on average higher investment returns in Turkey as opposed to North Cyprus. This is not only because of the fact that we believe we have given some very sound investment advice, which paid off, but also because of the general level of price increases in Turkey, which outweighed those in North Cyprus. I believe the following are the main reasons in favour of Turkey Positive economic indicators in Turkey since 2002, Turkish economy has been on a steep upward trend. Inflation is below 10% for the first time in living memory, Turkish Lira has been steadily gaining against hard currencies (YTL now stands at 2.5 to GBP, last year this time it was at 2.9), the ruling party was recently reelected with a landslide and this signaled continued economic stability in the country, the very next day Istanbul stock market jumped a premium. Availability of scheduled and charter flights serving the Turkish resorts Izmir, Bodrum, Dalaman and Antalya airports now have direct flights pretty much all year round from major airports in Europe. Increasing regulatory framework pertaining to construction and planning permissions North Cyprus certainly benefits from the first and last of the points above for North Cyprus economy is consistently index-linked to Turkish economy. However, there is a perceived political issue surrounding the property market in North Cyprus, that of the land matter. You may be aware of the perceived issue on title deeds in North Cyprus pending a full and final settlement between the Turkish and Greek administrations on the island. The Greek administration claims that some of the land in North Cyprus does not belong to Northern Cypriots to sell. In our opinion, shared by many legal and international opinions, the Greek claims are ill-founded and will not come to anything, however, the sheer existence of such a debate seems to be depressing property prices in North Cyprus. In other words, there is a degree of uncertainty, which in the short to medium term prevents the full potential from being realized. The bottom line is If you are after speedy capital appreciation, then we suggest Turkey If you have a longer term view, then North Cyprus could be more advantageous for inherent gains in North Cyprus property will most certainly be higher in the long run. I think we need to discuss your intended investment profile. Then we shall be able to advise you more effectively and with specifics. Short terms capital growth? Long terms portfolio building + rental income? I look forward to hearing from you soon. Best Regards Cameron Deggin Jeri Bidinger - 1 July 2007 - Queried about attributes and investment potentials of various regions in Turkey including Istanbul Dear Jeri Firstly may I take the opportunity to thank you for your kind enquiry with our company seeking advice on relocation to Turkey. I would like to briefly introduce our company to start with. We are a UK based property investment consultancy with local offices in various parts of Turkey and North Cyprus. We assist our clients with the search and acquisition of their ideal Turkish home and viable property investments in Turkey and North Cyprus. We recognize the fact that purchasing real estate is an important decision and more so relocation to a new country requires careful planning and sound advice. We will therefore work closely with you to identify your precise requirements and then advise accordingly as well as assist you throughout the purchase process. It probably is a coincidence, and if not may be you could advise me why, that in the last 2 weeks we received half a dozen enquiries from British and US ex-pats living in Abu Dhabi and looking to relocate to Turkey. I wonder if there is an underlying reason? Turkish property purchase process is pretty straight forward and provided you seek independent legal advice, there is really no hidden charges or major obstacles for foreign buyers. We will of course assist you with all aspects of the process. Please do refer to our TURKEY PROPERTY PURCHASE PROCESS for a more detailed write up that I trust will come in handy. Deciding where to buy, I guess, will be the main task. I believe we shall need some further communication and discussions before I can solidly guide you, however, I would like to give you some brief insides as follows. Istanbul you mentioned in your e-mail that Istanbul looks appealing. In my opinion, unless you will take up a position based in Istanbul, this city, albeit extremely beautiful and mysterious, may not be the right place for permanent living. Istanbul is a very large and somewhat disorganized city. It is home to over 14 million people and is spread out in many directions. Transport is very challenging and it certainly is not an ideal place to take it easy and watch the world go by (if thats what you are looking for). Istanbul is a city on the go 24/7. It does have seaside suburbs, however, these are not your quiet seaside resorts where you can enjoy the sea and the Mediterranean climate. In other words, Istanbul is a bit like living in London or New York. People move there for business opportunities and the bottom line is it is a place to make money and not to relax and unwind. In terms of property investments, Istanbul is one of the top investment cities according to The Economist and we would certainly vouch for that. Please review our ISTANBUL PROPERTY INVESTMENTS Antalya and the Mediterranean The Mediterranean coast of Turkey stretches from Antakya on the Syrian border to Kas, some 450 miles westwards. The stretch between Antakya and Antalya is still unknown and not as developed. You will have difficulties finding the right schools and required infrastructure. Antalya is the main town on the Mediterranean coastline, a large town housing about 1 million. Antalya is surrounded with smaller touristy towns to the east and to the west. The main towns are Alanya on the far east of Antalya, and Side, Belek coming toward Antalya and Kemer to the west of Antalya. My natural choice would be Kemer due to the fact that it is the most developed and prettiest of these towns with a healthy number of local inhabitants ensuring the town does not exist just for tourism. Antalya city is only 20 minutes by car, where you will find all required amenities including international schools and an international airport. The region has hot summers and warm winters. Having said that the summers are not as hot as what you would have in UAE. Please refer to a map of the region and a brief reading on Kemer - Antalya & The Med Fethiye and Oludeniz region - Strictly speaking, Fethiye region is in between the Mediterranean and Aegean coasts. Fethiye is a developed resort with a very British existence due to a high number of Brits, who have purchased holiday homes and permanent homes in the area. The nearest large town would be Antalya. There are several international schools and healthy amenities in the region. I would say the only down side is that the region is fairly touristy and in winter tends to go rather quiet. Main areas that I would recommend would be Fethiye and Gocek. Fethiye has several districts with excellent scenery, mountains and always a nearby beach such as Calis, Ovacik, Hisaronu. Gocek is a little up-market resort on its own and well known for its beautiful and high-society yacht marina. The nearest international airport is Dalaman, which is under 1 hour by car from all of these resorts. I would recommend this region, however, only secondary to Kemer, Antalya. Please refer to Fethiye and Oludeniz Bodrum and the Aegean The Aegean coast of Turkey starts from Fethiye and stretches all the way to above Izmir on the west of Turkey, this is a coastline of again over 500 miles. In my opinion the only cosmopolitan and certainly the most refined resort on the Aegean is Bodrum. Bodrum is extremely scenic, hilly, green and well celebrated amongst Turkish citizens as a natural destination for a second home. The region is not as hot as the Mediterranean and there is always a comfortable sea breeze blowing in land. The nearest international airports would be Bodrum airport and Izmir airport. In summer months Bodrum does become rather hectic and busy, however, there are some excellent get-away areas on the outer sphere of Bodrum peninsula, only 15 minutes by car to Bodrum town centre, such as Yalikavak, Gumusluk, Turkbuku, etc. Please refer to BODRUM PROPERTY FOR SALE I hope the above gives you some idea as to various possibilities and acts as a good foundation to build your search upon. In terms of finding the ideal property, I have no doubt that we can assist you in all of these regions through our local offices, however, I believe firstly you will have to evaluate pros and cons of these regions, which are in some ways rather different from one another, Turkey is a huge country! Please let me have your feedback in due course. Best Regards Cameron Deggin |
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