TEB House Purchasing Guidelines

You should make sure that the house you intend to purchase has been constructed by a reliable construction contractor with solid reputation in the industry. You may utilize housing loans under special conditions from the contracted construction companies of the Bank. Click here for access to all Housing Projects, for which TEB offers special housing loan conditions.

Points to Be Taken into Consideration While Purchasing a House

Selection and purchase of a house may be a challenging process. These guidelines are intended merely to assist you in the process. We hope these guidelines to be useful for you.

Accumulated Tax Liabilities Related to the House to Be Purchased

Real Property Tax Expenses

Title Deed Fees and Income Tax

The amount in TL to be declared of the sales price in respect of your house purchasing – selling transactions is important both for the determination of the basis of title deed fees and for the calculation of earnings from appreciation.

The title deed fees applicable for house purchasing and selling transactions are calculated not to amount to any less than the applicable real property tax on the basis of the value declared by the purchaser and the seller by three percent, separately by the purchaser and the seller, and are so payable both by the purchaser and the seller, individually, by 0.15 percent.

The earnings derived from house sales may, under certain circumstances, be subjected to income tax as a part of ‘appreciation earnings’. The amount declared for title deed registration purposes during the sales is, thus, of importance as it is taken into consideration fort he calculation of the amount of earnings, on which income tax is to be assessed.

The amount of difference between the sales value and the cost amount of the house (the costs incurred by the seller due to disposal as well as the taxes and fees payable thereby shall also be deducted from the value yielded) is taxed as “Appreciation Earnings”. In the cases, where the house is sold 5 years after the purchase of the house, the concerned will be exempted from “Appreciation Earnings” tax.

As of 2009, TL 7,600 of the earnings derived from house sales is exempt from "Income Tax". Any earning amount in excess of the said amount will be taxed by 15 to 35 %, depending on the actual amount of excess.


Real Property Tax

In respect of the house you purchase, you are required to file “Real Property Tax Return” with the concerned municipality ‘until the end of the year of the transaction’. The “Real Property Tax” rate applicable for houses is 0.2 percent.

Both the purchaser and the seller are severally and jointly liable for the accumulated outstanding “Real Property Tax” amounts related to the house at issue as of the year of sales. (In other words, the accumulated outstanding real property tax related to a recently purchased house may be collected from the new owner thereof. Those, who purchase a house, should file real property tax return "until the end of the then current year". The real property tax assessed for the year of sales will be borne by the seller. Therefore, it would be expediential to check with the Tax Department whether or not there are any accumulated real property tax amounts outstanding in relation to the house you intend to purchase. You can check the payments regarding the taxes assessed in the passed with the Tax Department, and you can also check the matter with the receipts held by the seller and keep copies thereof. Furthermore, “Contribution for the Protection of Immovable Cultural Assets” is payable by 10 % on the basis of the “Real Property Tax” amounts.

Environmental Cleaning Tax

The liability for environmental cleaning tax emerges as of the date of purchase of the property. In the event the Environmental Cleaning Tax related to the house you have purchased has never been paid, you can, being liable as of the date of purchase of the property, apply to the municipality along with a copy of the title deed and file your return.

The “Environmental Cleaning Tax” is calculated as TL 0.18 by Metropolitan Municipalities and as TL 0.15 by other municipalities per each cubic meter of the water consumed as of 2008. The “Environmental Cleaning Tax” so calculated for the houses is collected as a part of the water utility bill.

Cases of Encumbrances on the House with the Title Deed Registration

The house you intend to purchase may be subject to such encumbrances as mortgage or seizure. An encumbrance is an annotation, which may have been entered into the title deed registry of the house and restricts the tenure of the owner on the house (usufruct, mortgage, promise to sell, option to purchase, adherence, redemption, lease, seizure, attachment, injunction etc.). Any real property, which, according to the title deed registry, is subject to encumbrances will not be eligible to be placed as security guarantee for housing loans.  Even though further mortgages may be created on real properties already under encumbrances, such real properties are not acceptable for housing loan guarantees since they do not constitute sufficient and necessary security guarantee for the housing loan. The real properties, which are annotated to be “Family Residence” as per the title deed registry pursuant to the Civil Code, are also required to be cleared of such annotations in order the creation of mortgage thereon. You may find out about any encumbrances on the house you intend to purchase by inquiring the respective title deed registration office, with which it is registered, of the matter. Upon any such inquiry, the registrar should check the title deed registry page related to the real property and investigate whether or not there are any circumstances at issue, which may preclude further proceedings.

Servitude/ Property Ownership

The Housing Loans are available only for such houses, for which servitude/ property ownership title has been duly issued. The title deeds for the houses, for which housing loan is to be extended, should be issued as servitude or full ownership.

A servitude is easement established by owner or the co-owners pursuant to the provisions of the Property Ownership Law in respect of the independent sections of one or more structures, which are to be or are being constructed on a land parcel. The decision on the extension of housing loans for the real properties, for which a “Servitude Title Deed” has been issued in place, is at the discretion of the issuing bank.

Property Ownership is the private title established by owner or co-owners of a real property pursuant to the Property Ownership Law in respect of each section of fully constructed real property, which is available for use separately and independently such storeys, apartments, offices, shops, stores, cellars, warehouses. According to the Property Ownership Law, each apartment is considered as an individual ‘independent section’. It would be expediential for you to know about the ‘independent sections’, ‘common spaces’, ‘annexes’ and ‘the surface area of each independent section’.  The reference of your share as per the title deed for the independent section, which you intend to purchase or may have purchased, is land parcel share may preclude the creation of servitude or property ownership. In that case, the nature of the real property has not been transformed pursuant to the Property Ownership Law.  Another possibility is that a habitation permit may not have been issued in place for the house. Transition to property ownership from servitude would require several actions to be taken with the title deed registration office. The said transition, actually, constitutes a transaction of type modification. Type modification is the action conducted on the map section and title deed registry of the real property in order to modify it from structured nature to unstructured nature or vice versa.

Ground Study for the Building, Where the House to Be Purchase is Situated

The soundness of the ground, on which the building is erected, is important in the case of natural disasters such as an earthquake. However, two matters should be especially taken into consideration on the matter; any building would not be resistant against earthquake no matter how sound the ground is if the construction quality had not been observed and the project had not been properly implemented and materialized. - Another important matter would be the ground study. The buildings constructed on random basis without ground study in problematic regions are exposed to great risks in the case of an earthquake. The establishment of the earthquake resistance condition of a structure primarily requires to study whether or not it has been constructed in compliance with the related project. If there are no irregularities with the project, then a ground study should be conducted with due consideration of the conformity of the structure to the respective project thereof.

The establishment of the earthquake resistance condition of a structure primarily requires to study whether or not it has been constructed in compliance with the related project. If there are no irregularities with the project, then a ground study should be conducted with due consideration of the conformity of the structure to the respective project thereof. You can apply to Building and Earthquake Application and Research Center of the Faculty of Construction of ITU (Istanbul Technical University) or the Dean's Office of the Faculty of Construction of ITU.

Other Critical Matters

The real estate brokers charge both the purchaser and the seller a commission by 2 to 3 % on the basis of the actual sales value of the house subject to the transaction.

Such matters as the façade, number of apartments, characteristics, noise and heat insulation condition, quality of construction materials used for the building, whether or not there are any tenants in the building, whether or not the building is installed with fire escape stairs, the security features, landscaping and the building class of the building are taken into consideration for the appraisal of the value you intend to purchase.

In the cases, where there then currently are tenants in the real property you intend to purchase, you should, primarily, review the lease contract executed with the respective tenants, meet the tenant in person or, if the tenant has committed to evacuate the building, compare the date as per such letter of commitment and the date of the respective lease contract. In the cases, where the lease contract has been annotated to the title deed, you may have problems with loan extension since the real property would not be acceptable for security guarantee purposes and the same conditions would also apply for you in exact.

In the cases, where you are to purchase a real property as a part of a construction project implemented by a contractor on flat-for-land basis; you are required to execute an agreement with the concerned contractor, in which the date of completion as well as each individual material to be used should be specified in exact, and incorporate necessary amounts of damages therein.

In order for relief from such liabilities as power and water utility liabilities, which may arise after the sales, it would be expediential for you to obtain a written and undersigned statement of liability in respect of such amounts from the former owner.

The construction quality and standards in Turkey have recently improved since the “Mortgage System”, which is yet a new practice in Turkey, has been becoming widespread. Nevertheless, it would be an additional assurance for the house you purchase to have been constructed by a reliable and reputable construction or contracting company.

• The neighborhood and surrounding facilities will mainly affect the prospective value of the house you intend to purchase; therefore, act in due diligence on the said matter.
• Make sure you conduct a research on the average current market value in the locality, where you intend to purchase a house.
• Find out whether or not there are any accumulated tax, power, water or contribution fee liabilities outstanding in respect of the house you intend to purchase.
• The distance between your prospective home and your office is of crucial importance. Make sure you determine the alternate means and modes of transportation available before you purchase a house.
• If you have children at schooling age, check whether or not there are schools in proximity to the house.
• Any individual, who is knowledgeable about construction – related matters, in your social circle; you may obtain reliable technical information from him/ her about the construction quality, installations and the insulation conditions. If you intend to purchase the house for investment purposes; you are recommended to investigate the average rent return in the locality by inquiring the real property brokers and resident neighbors of the matter.
• It would of importance for you to take the costs to arise out of the potential needs of maintenance, modification and renovation into consideration for your budget control.
• We urge you to investigate the reliability, performance track record and financial standing of the respective construction company and to review the “Preliminary Contract for Sale” to be executed therewith in order to make sure that the house will be delivered to you in the contracted time and at the contracted cost and quality in the case of buildings under construction. 
• We, further, recommend you to check whether or not the building is a certified "Load-Bearing System Project", has been constructed in compliance with the “Earthquake Regulation”, whether or not “Waterproofing” has been applied to the foundation and whether or not the respective load-bearing system has ever been repaired, and inquire the reasons of any such repair if applicable, and to obtain the ground study report and review the ground conditions.

Tips for the Purchasing of Incomplete Houses

If you intend to purchase a house within an incomplete building, we urge you to check the project permit with the respective contractor in case the construction remains incomplete. It would also be expediential to confirm whether the incomplete houses are eligible for “Utilization Permit.”

Second-Hand House Purchases

It is crucially important that you check the title deed to any second-hand house you intend to purchase. As a part of such check, you should pay due attention to whether or not the servitude has been established and the habitation permit, being the building utilization permit, has been obtained.