Declaration of Value in Turkish Property Buying Process
Property sales value is the amount of money paid by the buyer in exchange for a property. There are a number of factors like area, property features, and the age of the property for determining the best value for property for sale. (Read more about recent property sales values; Property Price Overview.) But, the finalizing factor for the sales price is the negotiation between the buyer and the seller.
Declaration of property value is the proclamation of the price of the property at the Title Deed Office. This is a necessary step for title deed conveyance. The declaration of value for Turkish property is generally lower than the sales price of the property.
The Differences Between Sales Value and Declaration Value
The main reason for the difference in declared home value vs sales price is the real estate taxation system in Turkey. Tax amounts are calculated from the declared sales value of real estate in Turkey. So, declaring a lower sales amount decreases the taxes buyers pay.
When you buy a property from a construction company, they also pay a tax from their profit. In such cases, companies are also willing to declare a lower sales price. This is especially true for commercial property sales value. 18% value-added tax besides other business taxes must be paid for commercial properties. So, construction companies prefer providing buyers with a much lower invoice.
Declaring a lower sales price and invoicing lower amounts during real estate dealing is very common in Turkey. Istanbul is an exception in this matter. Construction companies in Istanbul generally invoice the real sales amounts.
Declaring a lower value than the real sales price may be a problem for buyers in two cases. The first one is buying a property in Turkey to apply for Turkish citizenship by investment program. You are supposed to purchase real estate valued at a minimum of 400.000 USD to apply for this program. So, declaring the real sales price would be a much better idea for you.
A property appraisal report is required for applying to this program. The Ministry of Environment and Urbanization verifies the declared property value with sworn experts.
The second case is buying a property with a mortgage in Turkey. The banks in Turkey will provide the mortgage amount based on the property appraisal reports. So, the buyer or the seller will not be able to declare a lower sales price.
As the leading real estate company in Turkey, Tekce Overseas always offers its clients the correct property options that suit their expectations and needs.
If you are interested in the Turkish citizenship program, we eliminate the options with low declaration value from the beginning. This way you won't waste your time and energy. Also, if you want to buy a property in Turkey with a mortgage, our team offers you options suitable for bank credit.