Real estate fees are taken from the sales process of all kinds of real estate.
Real estate is the common name for commercial immovables such as houses, land, field, building, office, workplaces, stores, etc. Regardless of their type, all types of properties are in a sub-category of real estate.
Generally speaking, there are 6 real estate fees as follows;
- Title Deed Transfer Fee (Tapu)
- Attorney's Fee
- Real Estate Agency Fee
- Property Tax
- Earthquake Insurance
- Utility Services
1. Title Deed Transfer Fee (Tapu)
During the sales of real estate, the parties pay the title deed transfer fees. For the transfer of title to take place, both the buyer and the seller pay title deed fees. However, most of the time, only the buyer pays this fee, if the parties agree.
Every year, the Official Gazette announces real estate fees and taxes to the citizens. The rate for title deed costs is the same this year. Accordingly, in 2022, a fee of 20 per thousand will be charged separately from the buyer and seller for the transfer of Tapu.
A revolving fund fee is also paid in addition to the fees in the title deed transactions. A total of 265 TRY / 18 USD will be paid, with working capital of 233 TRY / 15 USD and an additional service fee of 32 TRY / 3 USD.
2. Attorney's Fee
The attorney's fee can be freely agreed upon between the real estate attorney and the client or the person requesting consultancy services. In addition, there is a lower limit imposed by the bar association for lawyers. No agreement can be reached for an amount below the fee determined here. Otherwise, the bar association imposes sanctions on the lawyer. Therefore, the parties can agree on any amount.
The amount that the land registry and real estate lawyer will charge the person who will request legal aid is not always the same. Many factors will affect this fee. While title deeds sometimes require inclusive and extensive research, sometimes it is enough to follow a few small procedures. Administrative cases and criminal processes have very different structures. Here, the workload and scope of the lawsuit are the main factors while determining the attorney's fee.
3. Real Estate Agency Fees
In the case of working with a real estate agency in transactions such as real estate buying and selling, you need to pay a certain commission fee to the real estate agent.
Consequently, real estate agents receive a real estate agent commission fee from their real estate purchases, sales, and, rentals.
By the relevant regulation, real estate sales transactions commission is at the rate of 2 percent in addition to VAT (18 percent) of the sales price. Both parties pay this fee.
If there is a written agreement between parties, either buyer or seller can pay the real estate agent commission, which is 4 percent in total.
4. Property Tax
After buying a property in Turkey, you have to pay property tax. This tax differs depending on the city and type of the property you purchase. For instance, if you buy an Istanbul property, the annual property tax is 0.2%. The tax depends on the city you buy and its type as well.
5. Earthquake Insurance
TCIP stands for the Turkish Catastrophe Insurance Pool. TCIP is the public institution that regulates and manages the compulsory earthquake insurance policies that take all residences under state guarantee in Turkey.
Compulsory earthquake insurance is a type of insurance that secures houses within limits against damage caused by earthquakes and earthquake-induced landslides, fire, explosions, and tsunamis.
While calculating the compulsory earthquake insurance prices, 14 different price tariffs, which are renewed every year, are taken into account according to 7 risk regions and 2 different construction styles in Turkey.
As of January 2022, the square meter unit costs used in the calculation of the insurance amount (guarantee amount) and determined according to building type were as follows:
- Reinforced concrete: 1,508 TRY / 102 USD
- Other: 1,040 TRY / 70 USD
6. Utility Services
Turkish citizens and foreigners can make applications to open a subscription to electricity, water, and natural gas through the branches and directorates of the relevant institutions, as well as online. Utility service fees vary in Turkey.
To benefit from the electricity service, the buyers must pay the fee. The residents have to pay a subscription fee of at least 165 TRY / 12 USD.
The water subscription fee is 166 TRY / 12 USD as of 2022.
The natural gas fee for 2022, is within the standard range for any home with an area of less than two hundred square meters. For a residence with a maximum size of two hundred square meters, the buyer must pay a security deposit of 775 TRY / 52 USD and a tax of eighteen percent.
What Happens if Property Fees are not Paid in Turkey?
The real estate buying and selling process is subject to certain fees. Unless the parties pay these fees, the land registry officer will not perform the requested transaction.
Immovable property is the most important issue of property rights. Legal affairs arising from this field have great financial consequences for individuals. However, the legal legislation about real estate law is complex. For this reason, in case of need for legal assistance regarding real estate law or case of a dispute, it will always be in the interests of people to seek help from an expert and experienced real estate lawyer. Otherwise, monetary sanctions are in question.
Should Foreigners Pay Real Estate Fees in Turkey?
According to Turkish Laws, foreigners can have the same rights and liabilities as Turkish citizens. Therefore, there is no property tax exemption for foreigners.
The tax rate for residences is 2 per thousand in the metropolitan borders; in non-metropolitan areas, it is 1 per thousand. The workplace, and shop property tax rate is applied as 4 per thousand in the metropolitan city and 2 per thousand in the non-metropolitan municipality.
Are the Property Fees High in Turkey?
It varies according to the type of real estate, its value, and the status of the province to which it is connected.
The real estate tax rate of increase for 2022 has been determined as 36.20%. For example, the tax amount will be $7,30 in 2022.
Property tax is calculated using different rates for residences, workplaces, plots, and lands. These rates are as follows:
- Per thousand for residences,
- Per thousand for workplaces,
- Per thousand for lands, and 1 per thousand for lands.
If the municipality to which the real estate is affiliated is in metropolitan status, these rates double. The amount to be paid for that year is calculated by using these ratios over the minimum fair values of the real estate within the relevant year.