A recently announced VAT increase on new build property in Turkey is expected to boost the property resales market according to Turkish real estate specialists, Oceanwide Properties.
Commenting on Turkey’s latest tax increase,Suleyman Akbay, Managing Director of Oceanwide Properties says: “I foresee a shift in buying trends of property in Turkey on the horizon, with a boost to the already demonstrably profitable resale market.”
The value of land and property in Turkey has risen dramatically over the past five years. Not only has the demand and weekly gain for holiday home rents increased substantially (the number of tourists arriving in Turkey reaching 31.78 million visitors in 2012), but also the capital gains on property are impressive. To June 2012 alone, Turkish property was being tipped to represent the third fastest value growth in the world, outpacing both Russia and China by investment press (source: Knight Frank Global House Price Index).
“In some regions, such as Fethiye for example, we are seeing a three bedroom apartment bought off-plan and completed five years ago now fetching 30 per cent plus above its original purchase price”, says Akbay.
Little development land remains
Those lucky enough to have already brought a property in Turkey during this time are, no-doubt, enjoying the benefits of their investment particularly when presented with the gloomier outlooks from within the Eurozone. For those now looking to sell on, newly announced increases to KDV (value added tax) in Turkey are set to further boost the attractiveness of a resale home, as the increases are expected to push up the prices of future off-plan and new build developments.
“Although builders may have seen this coming and gained relevant licenses prior to this January,” says Akbay, “for new projects in the longer term, prices will more than likely rise to accommodate the additional expenses now involved. The new tax hikes don’t affect older properties as it stands, and therefore resale property in Turkey will likely present better value for money for many buyers”.
In light of this month’s announcement, coupled with the fact that in many coastal areas like Ovacik in Fethiye, future new builds are now limited as little development land remains. Oceanwide Properties is offering its exclusive resales service at a vastly discounted price to vendors for a limited period only.
Akbay explains: “As an overseas estate agency exclusively specializing in Turkey, we are pleased to be able to offer a flexible range of sales options allowing vendors to maximize their sales potential in tune with Turkey’s maturing resales property market.
“Our exclusive resales package offers vendors all the benefits of our online promotion, which includes advertising properties on popular paid portals like Rightmove and A Place in the Sun, but also the trained and locally experienced support of our marketing team who will take sales photos, write up detailed sales descriptions, keep them up to date on a regular basis and promote all resales via our international agent network.
This includes some of the biggest names in the overseas property investment business that use us exclusively. It should result in far more potential clients for our sellers, and hopefully far more sales in 2013. Vendors are advised to register their interest soon to qualify for our limited time discount.”
- The KDV (Turkish equivalent of VAT) increase on real estate came into effect 1 January 2013 and is defined by the value and size of a new property. If a property is less than 150msq with a value of between 500-1000TL per msq, tax is set at 8%. If the value per msq is in excess of this, 18% is payable. KDV charges apply to new build, corporate developer projects only and not to older resale properties bought from an individual.