Things to Consider in Real Estate Purchases

Check Property and Environmental Cleaning Taxes

Real estate purchase and sale transactions must be carried out in official form in deed. There are a number of aspects that need to be considered when performing these operations. One of them is the old tax debt of real estate. Because according to the Property Tax Code, the buyer and seller are responsible for the “Unpaid property tax debt” for the year in which the property was sold or previous years, i.e. together. In this way, the accumulated taxes on real estate can also be charged from the new owner of the real estate. In this case, the person who buys the real estate will have to charge the previous malike for this amount paid. In order to avoid such situations, the sale of real estate to the relevant municipality so as not to encounter a follow-up of the real estate and environmental cleaning taxes of those who sell real estate with a petition there is benefit in reporting.

Check the Value of Real Estate Declared in the Deed

The second point to note is the “declared value of real estate in the deed”. Gains from the disposal of real estate within 5 years from the date of acquisition are declared as “Value increase gain” for natural persons and range between 15-35% Rates are subject to income tax. If the relevant real estate is dispose of earlier than 5 years and the deed is declared low in value, a high amount of income tax may be paid for the seller. However, if the property is acquired through inheritance or donation, no income tax will be paid regardless of the sale price. Likewise, there is no payment of income tax on the sale of real estate held for at least 5 years.

Land Mortar

The title fee payable during the purchase and sale is calculated on the declared turnover and acquiring price, not less than the minimum property tax value. The price to be declared shall be the “real” purchase and sale price of the real estate in question. “Minimum property tax values” are determined every 4 years, after which new values are determined by half the revaluation rate according to the provisions of the VUK each year. The purchase and sale prices to be declared in the deed cannot be below the minimum property tax value set for that year.

Property Tax

Buyers of real estate are required to provide a “Property tax notification” to the relevant municipality by the end of the year in which the purchase is made. The property tax for the year in which the real estate is purchased is paid by the seller, while the buyer is responsible for the property tax for the following year.

What is Reckless Economy?

The purchase of real estate on behalf of the spouse or children only if the price is paid by the head of the family, there is a “Recalling Economy”. Unrequited intikal status is subject to the tax of probate and intikal. The spouse or child who owns the real estate must pay the tax on the heirloom and incursion, which can vary between 5-15% by submitting a declaration. However, if the family chief has given the price of the real estate as a loan, the subject of the probate and intikal tax will not be the subject.

In case of sale of real estate registered in the business of commercial enterprises, commercial enterprises are obliged to make invoices and also collect VAT. However, when an enterprise that is not engaged in real estate trading and leasing sells real estate in assets for at least 2 years, the sale price is cash within two years following the calendar year in which the sale was made for 50% of the real estate gain provided that they keep the excluded sale price in a passive special fund account until the end of the 5th year following the year of collection and sale. they do not pay corporate tax, the sales transaction is not subject to VAT, and they also do not pay income tax withholding.

Documents Required for Real Estate Buying and Selling

• Satılacak gayrimenkule ilişkin tapu bilgileri
• Alıcı ve satıcının nüfus cüzdanları
• 2’şer fotoğrafları
• Tüzel kişiler için vergi dairesi bilgileri
• Temsil söz konusu ise vekaletname, temsilcinin nüfus cüzdanı ve bir adet fotoğrafı
• Gayrimenkule ilişkin ilgili belediyeden alınmış emlak vergisi değerini gösteren belge

The title officer checks the existence of these documents before performing the transaction, but although the documents are complete, some restrictions on the persons who will do the transaction may not be carried out can lead to.

Restrictions on Real Persons That Can Lead to Fall of the Purchases in the Deed

- Being under the guardianship of the person

- Lack of appeals (lack of mind angels)

- The person is a minor

- Restricted person (Kayyum or legal adviser appointed)

- The person has foreign nationality

In addition to restrictions on natural persons, the following records in the house of comments and statements of the title log page of real estate may prevent the purchase and sale process:

- Precautionary measure

- Public digits

- Bankruptcy

- Period given by koncordato

- Explanation according to Article 31/b of the Expropriation Law

- Family dormitory and family housing

- Foundation explanation

- Military ban and security zone designation

- Indication of the presence of culture and nature

- Explanation according to the Law of Housing No. 2510

- Explanation according to Slum Law No. 775

- Comment on the share of participation in expenses according to the Municipal Revenue Code

As a rule, the presence of the buyer or their proxies is sufficient in the purchase and sale transactions in the deed. However, it is necessary to have two witnesses in the following cases:

- If one or more of the parties does not read, write or sign

- If one or more of the parties is deaf, blind or dumb

- If the identity of the parties is doubted

- In the currents of looking until death

- If the interested person does not know Turkish, a sworn interpreter is kept.

For the purchase and sale transactions of companies, there must be clear provision that real estate transactions of the company can be carried out in the company's strength. These transactions are carried out through the authorized representative of the company. According to the Land Law, the title officer will request the introduction of a certificate of authorization from the Registration Registry Directorate that the company officer who will make the registration is authorized. The Land Directorate will examine what operations the company can do. The main contract of the company must explicitly state that the company is allowed to save real estate.

You can find our previous post at https://www.endeksa.com/tr/blog/yazi/konut-kredisi-taksitleri-nasil-hesaplanir link.

It is an excerpt from the book “Professional Real Estate Investment” by Kürşat Tuncel.