At Capital Developments Turkey, we believe that our clients should have total visibility of all costs that are involved in the purchase of, and subsequent upkeep of, their property. We have put together this comprehensive list to help you when budgeting for your property purchase.
OBTAINING A TAX NUMBER
You will need to obtain a tax number for paying property taxes when purchasing your property and for taxes due on an annual basis.. Capital Developments Turkey will assist you in this process which is very straight forward and entails a visit to the local tax authority. You will need to bring your passport and a photocopy of the picture page in your passport with you.
SETTING UP A BANK ACCOUNT
We strongly recommend that you set up a bank account before leaving Turkey as this is the best way to transfer funds both in and out of the country and is also ideal for arranging direct debits for utility services, insurances etc.
Capital Developments Turkey will assist you in opening a bank account during your stay in Turkey. Again this is a straight forward process - you will need to bring your passport with your for idendification purposes and your Turkish tax number. Usually the Bank will open two accounts for you, one in Euro (or Sterling for UK Customers) and one in Turkish Lira Currencies.
The Euro or Sterling Account is open to allow ease of transfer of currency from your home country to Turkey and the Turkish Lira Account is set up to facilitate direct debit payments that you may want to set up for Utility Bills and Insurances. When completing a standing order mandate for bill payment, ensure you take a current bill along to the bank with you to ensure everything is set up correctly.
BANKING SERVICES
Once your accounts are opened you can apply for an ATM Card (which will be on your Turkish Lira Account) and can also apply to set up on-line banking thus allowing you to do all of your Turkish Banking online whether at home or in Turkey.
Turkish Banks offer a range of current, savings and deposit acounts which can all be managed via the internet. Credit and Debit Cards are also usually available to customers and can be applied for in branch.
Turkish Lira Deposit Accounts and investement funds still give a good return, currently around 18% and your local branch will be able to provide you with the information you require. Deposit accounts are also availaible for foreign currency but interest rates are much lower.
Credit cards are widely accepted in Turkey. The Chip & Pin system has been introduced so you will need to ensure you know your PIN before using cards in Turkey. Check with your bank in Ireland or the UK as to how much they charge for foreign transactions as some banks provide this service free whilst others charge per transaction or by percentage.
Cash Machines (ATM’s) – know locally as Paramatik are found in all resorts and towns and most display instructions in Turkish, English and other European Languages. Most machines pay out cash in Turkish Lira only but several around the Kusadasi area pay out in Euro, Sterling and Dollars.
Foreign credit cards and Maestro or Cirrus cards are accepted in all ATM Machines but a fee is levied on withdrawals.
OTHER COSTS TO CONSIDER WHEN BUYING A PROPERTY
Legal Fees – Dependent on the Solicitor and the work involved, see can range from €750 up to €3,500. Obtain a quote from your lawyer or solicitor before appointing them to include a list of works they will carry out on your behalf.
Surveyors Fees - € 250 - 1500 approx.- Official surveyors from Government Office are very expensive (€1500) - private independent surveyors are more reasonable (€250 - 400). (NB - Properties built since 2000 will have a building certificate from Yapi Denetimi (building regulations authority) so surveys are not necesary in this instance)
Interpreter Fees - €100. The attendance of a government recoginsed interpreter during the transfer of the Title Deed a the Land Registery Office is required by law. Capital Developments Turkey will make all translator arrangments for the Translator on the day the deed is transferred to your name. We will also assist you in registering your deed with the council as the new owner and this task is included in the fees.
Title Deeds/Property Tax - Depends on the square meters of the property, the property location and the value of the title deed for the property and is calculated by the County Council and Title Deeds Office. (Cost vary between 1% & 3% of the value of the Tapu)
Estate Agent Fees 3% of Total Purchase Price (if buying resale or co-operative property), - Fees are subject to an additional 18% sales tax. (e.g if Fees are €1000 -you will pay an additional €180 sales tax - Total €1180). There are no Estate Agents Fees to be paid when buying a Capital Developments built Project.
Water & Electricity Connection Fees - Costs for Water and Electricty transfer of services to your own name, can vary hugely and depend on where your property is, if it is new build and has up to date recommended meters, if the supply for water is from a large county council or other local supply etc. Costs in 2008 vary from 350YTL up to 1800YTL for both services to be transferred to your name. These costs are paid to the local authorities and you will receive receipts for same from them. These costs can also be changed annually by the service suppliers as they see fit.
INSURING YOUR PROPERTY
Natural Disaster Insurance (DASK) cover is compulsory under Turkish Law and should be immediately activated on receipt of your title deeds. Natural Disaster Insurance covers the basic cost of rebuilding the structure of the property but it does not include fixture, fittings and contents Insurance.
Capital Developments Turkey strongly recommend that all owners also take out a private insurance policy as this does cover the other costs involved in rebuilding in the case of an earthquake. A good private insurance policy will also cover, theft, flood, fire and accidental damage cover including broken glass. You will need to estimate the value of contents to be insured for this policy.
Earthquake Insurance Depends on square metres (eg. 100m2 house in Kusadasi - € 45 per annum approx)
Private Insurance. Varies on the square meters of the property and the value of the contents cover required. Average costs between €70 and €250 per annum.
Capital Developments Turkey will automatically obtain an insurance quote for you for both Earthquake and Private Insurances with 24 hours of receipt of your deed. You can chose to go with this quote or can another insurance company if you wish. Capital Developments Turkey also provide a renewals services to our customers for any policies taken out with our recommended supplier.
Capital Developments Turkey do not charge any fees for new policy set up but do charge a €20 fee for annual renewals carried out by us. If you dont wish to pay these renewal charges you can deal directly with the Insurance Company.
If for any reason you need to make a claim on your insurance, Capital Developments Turkey Office will help with all the required procedures and claim applications including informing the police in case of a breakdown to arranging visits from the Insurance Assessors and all aspects of the claim processing including claim acceptance payment forms.
REGISTERING YOUR DEED WITH THE LOCAL COUNTY COUNCIL AND ANNUAL PROPERTY TAXES
Once you have received your title deed from the Tapu Office you should immediately register your deed with the county council as the new owner. A small fee of 10YTL (at time of publishing this information – Oct 08) is charged per person (e.g 20YTL if two names on the deed) along with other general council and environmental charges. You will then receive a County Council Card and you should keep this to bring with you to the County Council every year when paying your annual taxes.
Capital Developments Turkey, can on request, escort you to the County Council Offices to register your deeds and obtain your Council Card.
For annual payments of council taxes, Capital Devleopments Turkey offer a service to pay these for you annually if you dont wish to do so yourself or are not in Turkey to pay in person. A €10 fee is charged per property for this service.
ANNUAL PROPERTY TAXES
Annual property Tax Costs (Environmental & Property Taxes) are due to be paid on two occassions annually - half the annual fees must be paid before 31st May every year and the 2nd half before the end of November every year. If you are not in Turkey to pay these prior to the 31st May and come later in the year you can pay the full amount and a small late fee of a few lira will be levied.
Annual Property Tax vary from between 0.01% - 0.03% of the value stated in the Tapu and other small taxes are also levied. Annual Tax amounts range from €30 - €150 annually.
ANNUAL MAINTENANCE CHARGES
Maintenance Charges - Annual Charge if property is in a community complex and vary depending on complex and services available. (between €500 & €1250 dependent on complex).
Capital Developments Turkey usually set the maintenance charges for their developments at €600 for the first year. Accounts are then presented to the general residents and at a general meeting, usually held in Ireland, these accounts are signed off on and new fees set for the following season based on agreed services. A Residents Committee is formed so the site becomes owner managed and the committee represents the general residents in all matters of site management outside seasonal times. Site fees would expect an annual increase of around 10% a year at a minimum. Site Fees will also increase if the residents decide on other Services for the site.
UTILITY CHARGES
Electricity Charges – Charge per Kw, prices in Kusadasi per Kw are currently 0,145982 YTL (7.5 Cent approximately) and there is 18% KDV (VAT Tax) and a small reading charge added to the usage costs.
Water Charges – Water charges vary depending on whether supply is from the county council mains supply by private tanker.
Kusadasi County council charges are based on usage with the first 20 tonnes charged at 2,05 YTL per tonne (was 1.90YTL but in January 2008 has been increased and will is subject in increase annually), Sogucak Village (supplying Walnut Grove) charges 2.75 YTL per tonne of water. Usage thereafter increases depending on the amount of tonnes thereafter in a billing period.
Gas Charges – Mains gas is not available in Kusadasi currently but is supplied in metal gas cylinders. Gas is normally used for cooking and can also be used for water and central heating. On your first delivery of a full Cylinder a deposit is paid on the cylinder and costs approximately 85YTL (including full gas). Cylinder refills cost approximately 45YTL and lasts approximately a month for water and central heating and three months for cooking.
ANNUAL RUNNING COSTS
In order to give our customers a rough outline of their annual running costs, we have compiled a Annual Costs Overview Analysis for a Capital Property in the Kusadasi Region to cover Annual Maintenance Fees, Annual Property Taxes, Insurance Costs and Utility Charges – please click here to view PDF.
These charges are a rough guideline only and will be affected by annual inflationary and budget increases and will depend on various factors such as usage of utility services, value of property contents etc.
CAPITAL DEVELOPMENTS CUSTOMER BILL MANAGEMENT SERVICES
Capital Developments Turkey also offer services for payment of Annual Taxes, Insurance Renewals and payment of Utility Bills for our customers. A Credit Amount needs to be lodged with our Kusadasi Office and we then set up a customer account for you and continually manage all of your bills and update you on a bi-annual basis or on request as to the status of your Customer Account. Fees for payment of Annual Taxes and Insurance Renewals are quoted above. A €20 fee is charged to set up a Bill Management Account with payment of utility service bills included in this fee.
FURNISHING YOUR PROPERTY
Furniture & White Goods Costs - If your property does not come furnished then you will need to allow a budget for this - €5,000 - €20,000 approx for a 3 bed property will cover these costs depending on the quality of furnishing you chose and the extend you wish to go to in terms of fixtures, fittings, decorations.
Capital Developments provide a complete turnkey furniture package service for our own built projects and full details of these services can be viewed on our website under showhouses for each development. Prices vary from €9,800 - €17,000 depending on your chosen package.
FINANCING THE PURCHASE OF YOUR PROPETY
Turkish mortgages are now available but we would advise all prospective buyers to also consider re-mortgage in Ireland or the UK - generally speaking this would be the cheaper route as both Ireland and the UK will have a lower interest rate. Turkish Interest rate is currently start from 5.95%.
Our experience to date, has shown us that many of our customers choose to re-mortgage their existing Irish or European property to fund the purchase of their foreign investments, or use personal funds or arrange a personal loan.
However, some people prefer to borrow against their overseas property so there is no risk to their property in Ireland or the UK.
Recent changes in Turkish legislation have allowed several Turkish and European Banks to start offering foreign nationals pound and euro mortgages secured against Turkish Property.
The lenders typically offer repayment mortgages of up to €200,000 or a maximum loan to value ratios of 75%. Loan periods are up to 20 years. Interest rates are presently around 6% for Euro loans and 7% for sterling loans, fixed for 1 – 5 years.
Major restrictions on Turkish Mortgages are that they can only be used to purchase in Istanbul or in a Coastal Resort. More recently (July 2008) Capital Developments Turkey has partnered with TEB(Turkish Economic Bank) who are now also offering equity release mortgages on Properties for those who have already received their title.
Turkish mortgages can be arranged directly with banks and most Banks Head Offices and indeed some of the local branches have Mortgage advisors who speak excellent English and are available to help with your queries.
The application process differs slightly to Ireland and the UK and you may need power of attorney in place to sort our property insurances ad other legal requirements.
Dont agree to purchase a property or part with any non-refundable fees, such as deposits or stage payments until you are confident you can get a mortgage or raise sufficent funds to completely fund the purchase of your property.
