So, dear friends, let’s dive into the exciting world of investing in foreclosed property in Turkey. This market may seem complex, but in reality, it offers numerous interesting opportunities.
Here, I will try to explain various aspects of acquiring such real estate, how to choose the right bank, and how to participate in auctions. Everything will be presented in simple and clear language so that everyone can understand how to invest profitably in Turkey.
What is Foreclosed Property in Turkey and How Does It Become Available for Purchase?
Foreclosed property refers to real estate that has been seized by banks from debtors. Such properties are often sold below market value, making them especially attractive to investors.
The purchasing process may seem complicated, but I will help you understand all the nuances.
Let’s start from the beginning and go over the steps necessary to successfully acquire such property.
Starting a Company in Turkey: First Steps
Starting a company is a fundamental step in acquiring foreclosed property. In Turkey, you can choose between registering as a sole proprietor or establishing a limited liability company (LLC).
Opening a sole proprietorship is cheaper, but if you plan to make large-scale investments, it’s better to choose an LLC.
- Choosing the Type of Company: It’s recommended to open an LLC as it provides more options and flexibility in the future.
- Charter Capital: Deposit the charter capital amount (starting from 5,000 euros) into an account at any Turkish bank. This is a mandatory requirement for company registration.
- Company Registration: Register the company through a notary and the chamber of commerce. This process takes a few days.
- Tax Number: After registration, obtain a tax number for the company. This will be necessary for conducting business and participating in auctions.
Choosing a Bank and Searching for Foreclosed Property
Now that the company is registered, it’s time to choose a bank and start searching for property. In Turkey, there are several major banks actively involved in selling foreclosed property:
- Kuveyt Türk: One of Turkey’s leading banks, known for its attractive offers.
- Ziraat Bankası: A state bank that offers a wide selection of properties.
- Garanti BBVA: A popular bank with a good reputation and many offers.
- Halkbank: Another major bank known for its transparent terms.
Visit these banks’ websites and explore the available listings. You may find properties priced 40,000 to 100,000 euros below market value.
Participating in Auctions: What You Need to Know
Participating in auctions is the next important step. To do this, you need to fulfill several conditions:
- Guarantee Letter: Provide the bank with a guarantee letter confirming you have 3% of the property’s value. This is required for auction participation.
- Deposit to Account: You can deposit 3% of the property’s value into the bank conducting the auction.
- Auction Process: Auctions proceed in increments of 25,000 Turkish lira. This means each subsequent bid increases the price by 25,000 lira.
Different Types of Foreclosed Property
In Turkey’s foreclosed property market, you can find several types of assets:
- Bank-Seized Property: This is the most common type. Banks seize property from debtors and put it up for sale.
- Government Property: State banks also sell property, which may not have been foreclosed but is offered at auction.
- Inherited Property: Sometimes, owners of inherited property decide to sell it through a bank. This can also be an attractive option for investors.
Taxes and Additional Costs
When buying foreclosed property, it’s important to account for taxes and additional costs:
- Purchase Tax: For properties up to 150 square meters, you must pay 1% of the cost to the bank and 2% to the government.
- Large Property Tax: If the property exceeds 150 square meters, the tax is 18%.
- Potential Changes: Tax laws may change, so it’s always important to stay informed about current requirements.
Conclusion: Risks and Benefits
Purchasing foreclosed property in Turkey is an exciting and potentially highly profitable process. With the right approach and thorough preparation, you can make a great investment and acquire quality property at an attractive price.
If you need assistance at any stage, don’t hesitate to contact us. We are ready to provide you with professional support and advice to make your real estate buying experience in Turkey as successful as possible.
Good luck with your endeavors!
