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Legal issues - Foreigners buying in Turkey

The Turkish government only recently redefined their law for the acquisition of real estate through foreigners. In the second half of 2005 the previous law was put on hold which meant that for approx. 6 months property buyers' details were not being processed by the authorities, which led to a decline in the number of purchases made. In January 2006 the new (and current) law was introduced and the backlog of buying applications could be processed.

The new regulations

The new regulations were introduced to limit the amount of land to be purchased by foreigners and to specify the areas in which land and property purchases could be made. Foreign nationals are now allowed to buy up to 2.5 Hectares of land in areas which have been included in regional city planning (Imar). Foreigners are not allowed to buy in military areas and in villages and rural locations without Imar. In recent months more and more foreigners decided to establish a Turkish Limited company before purchasing their desired real estate. This is a completely legal strategy and avoids the military checks and the connected delay (between three and six months) in property purchases and allows purchases in areas which would otherwise be out of bounds. However, you should be aware that setting up a company is connected with extras costs. The setting up of a Limited company by a professional accountant will cost between 2,200 and 3,700 Euros (1,500 - 2,500 GBP; 2,900- 4,800 USD). The yearly expenses for accountancy can be expected to be approx. 1,500 Euros (1,000 GBP; 2,000 USD). As a Limited company you will have to pay VAT on your property purchase but setting up a Turkish firm also has its benefits: If you are planning to rent out your property you can calculate any generated income against expenses such as furniture and maintenance costs.

Once the area in which you have bought your property will be included in city planning, you may simply resolve your company and transfer the property from your company name to yourself.