With the diversity of real estate in the Turkish real estate market, we notice a large difference in the prices of these real estate, and there are several factors that play an important role in determining the price of the property, in terms of the location of the property, its area, quality of planning and implementation, internal and external specifications, and services available in the area in which the property is located, in addition to global economic factors which has a significant impact on the mechanism of determining the price of real estate in Turkey.
The mechanism for determining the price of real estate in Turkey
On our way to searching for a mechanism for determining the price of a property in Turkey, we will address the factors involved in that mechanism:
1. The high volume of demand for real estate in Turkey:
Since investing in the real estate sector is a type of long-term investment and is considered a safe investment in crises that witness sharp fluctuations in exchange rates, real estate investment in Turkey is witnessing a strong demand by investors to protect their capital from the risks of investing in other sectors, this increase in Demand has led, in one way or another, to a rise in real estate prices to approximately 45%, according to the economic theory that says that high demand for a commodity will lead to a gradual rise in the price of that commodity, and real estate is the commodity traded in the Turkish real estate market.
2. Real estate tax rate on real estate in Turkey:
In all countries of the world there is a specific tax system that governments adopt to finance the state’s public treasury, and in the real estate sector, the Turkish government imposes a tax called the real estate tax on real estate traded in the real estate market, buying and selling, where both the seller and buyer pay the tax on the property and its value is 4 % of the value of the purchased property and it is paid in half, i.e. 2% by the seller and 2% by the buyer, and this tax is paid only once and not annually, and of course there are some costs necessary to pay the tax, and therefore this tax is added to the price of the property in Turkey indirectly.
3. Ownership fees for real estate in Turkey:
After following all the necessary steps to buy a property in Turkey until we reach the stage of transferring ownership of the property from the seller to the buyer, in this step, a fee called the property ownership fee in Turkey is imposed, amounting to 0.003% of the property value, to be paid annually.
4. Profit tax on real estate in Turkey:
Forms of real estate investment in Turkey vary between renting or reselling real estate in Turkey, benefiting from the price difference and collecting capital gains. As long as there is a financial return that has been achieved, the Turkish government imposes on it a tax called a capital gains tax that is deducted from the net profit, but the investor adds it to the price of the property in order to benefit from the profit in full, which leads to an impact on the price of the property in Turkey.
5. Costs of services on real estate in Turkey:
The costs of services on real estate in Turkey are security protection fees, electricity fees, maintenance fees and other costs required by any property in order to live in it and benefit from its facilities, all of which are indirectly added to the price of the property in Turkey.
6. The location of the property in Turkey:
It is one of the most important factors that interfere in the mechanism of determining the price of real estate in Turkey. The real estate located in the city center or in areas close to vital and service centers differs in price from the property located in remote or extreme areas remote from hospitals, schools, universities and transportation lines, noting that remote areas and cities suburbs have recently witnessed a wide real estate and urban renaissance, which is a single type of successful real estate investment in Turkey, and the view of the property on the coastal areas, or within the forests and green areas, all of this affects the price of the property in Turkey, and the price of the property located within the safe areas is definitely different from the price of the property near the hot spots.
7. There are no accumulated taxes, seizure signs, mortgage or legal problems on the property you intend to buy, and here it is necessary to communicate with the Land Registry Office to ensure that this property is in a sound legal status, and that the title deed does not contain any fines or owed debts, because All these expenses you will find yourself obliged to pay until the ownership of the property is transferred to you, therefore, it is considered an additional amount over the price of the property in Turkey.
8. Benefits on real estate loans to buy a property in Turkey:
If the property was purchased through a real estate loan, you will have to pay interest as a percentage of the loan, and therefore the price of the property here will increase by the amount of that interest.
9. Some administrative fees that appear suddenly, such as the fees of the sworn translator if one of the parties does not speak Turkish and the fees for the transfer of ownership transaction, all of which are actually added to the price of the property in Turkey.
10. The specifications of the property in terms of elegant interior design, modern facilities, and the status of the property if it is in good condition or needs additional repairs, all of this affects the price of the property in Turkey.
11. International economic changes that affect the economies of most countries of the world by changing the exchange rate, which in turn affects the purchasing power of the local currency, which is directly reflected in prices in general, the real estate sector is one of the sectors affected by these changes, but in the long run, and this is one of the factors affecting the mechanism of determining the price of real estate in Turkey.
It should be noted, however, that despite all the global economic crises that the region and the world are witnessing, and the state of inflation and the significant rise in the general level of prices, the mechanism for determining the price of real estate in Turkey remains slower than others in terms of being affected by these changes, due to the strength of the investment ground on which it is based in Turkey.
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