Turkey gains World Bank funding to upgrade TAPU system

Turkey Partners with World Bank for Modernization of Land Management Systems

WASHINGTON, May 1, 2008 – The World Bank today approved a loan equivalent to US$203 million to the Government of Turkey for the Land Registry and Cadastre Modernization Project. The Project will improve the effectiveness and efficiency of the land registry and cadastre services.

"The Project constitutes a next generation of Bank operations in the area of land management and cadastre, where the country already has a well functioning property rights regime, but is striving to take the land registry and cadastre data use to the next level by spreading its benefits to people, businesses and multiple sectors, and facilitating better access to real estate information through the e-government platform,” said Wael Zakout, Sector Manager and Task Team Leader for the Project. “This project will also help improve customer service by reducing the time taken to register a property transaction to a few hours, and develop property appraisal function in line with international standards.”

The project will (i) renovate and update cadastre maps to support digital cadastre and land registry information; (ii) make the digital land registry and cadastre information available to public and private entities (iii) improve customer services in land registry and cadastre offices; (iv) improve human resources in the Turkish Land Registry and Cadastre Agency (TKGM); and (v) develop policies and capacity to introduce best international practices in property valuation in Turkey.

While the Turkish Cadastre and Registration system is considered one of the most effective in the region and registration of property transactions is done within one day in many offices, there are still many shortcomings to be addressed to ensure that the system modernizes to reach the same service level as in the European countries. Many of the Cadastre and Land Registry offices rely on manual systems, with old documents, some of them dating back to the Ottoman times. In addition, the TAKBIS system (Turkey’s computerized Cadastre and Land Registry Software) runs in only 140 out of the 1000 offices.

The most challenging aspect is that cadastral maps continue to be in a paper format, vary in accuracy and consistency, and are not linked to the national network. This makes it difficult to support E-government applications as cadastre maps serve as a base mapping for many government applications. Furthermore, in many localities maps are out of date and do not correspond with the ground locations and areas, differing sometimes by up to 10 meters.

The project will be funded by an IBRD flexible variable spread loan. It will have a maturity of 23.5 years including a 5 year grace period.

Source: www.worldbank.org

Credit: www.turkeycentral.com

Turkish Property Tax Evasion

There is a warning causing anxiety among Akbuk property buyers that I have been hearing frequently - that the Turkish government intends to crack down on property tax evasion and are out to get you! This is becoming an increasing issue as property prices rise, particularly in areas with a lot of foreign buyers. But the burden of suspicion here is NOT falling on foreign property buyers - despite what you may have read in other places including the Turkish Embassy in London's own website! The government's concern is that construction companies are effectively laundering their incomes by requesting payment in a combination of cash and bank transfers, persuading property buyers to under-declare the purchase value of the property on their title deeds, and then only declaring the minimum amount to the taxman.

Now if you've bought a property in Turkey before this may all sound rather familiar. Did you put down a deposit for your property and pay the rest in installments by bank transfer? Did you declare the council's assessed value for the property on your title deeds because your solicitor recommended it for tax reasons???

Well don't be scared. So did most people. And it's all perfectly legal. Even the Turkish Embassy admits it in a fairly dramatic u-turn on their informative (!) website: "Each of buyer and seller is to pay real estate sale-and-acquisition levy of 1.5%, based on the declared value of the asset (This value cannot be less than the threshold determined by authorities). It is collected in prior to the transfer of ownership at TAPU office." Which means that you CAN declare the council's assessed value of the property on your title deeds and pay tax accordingly. And as for paying in a cash/installments combination, nothing could be more sensible. Just make sure that you agree the payments in your sales contract arranged by your solicitor to make sure everything is above board. The real target of this worry-provoking campaign isn't you, it's the builder whose property you are buying. And how he declares his tax is his responsibility, not yours.

So what's the moral of the story? Leave a paper trail. NEVER buy a property without involving a solicitor and having a detailed intent-of-sale contract drawn up. Oh, and unless you are VERY confident about the buying process, don't bypass the estate agent just to save your 3%. We don't just exist to point you at properties you can find by yourself, we also understand the ins and outs of the property buying process in Turkey - which is more than I can say for the Turkish Embassy in London! (Sorry guys, but you're not good at this. Really. Pull yourselves together.)

To get the real lowdown on buying property in Akbuk safely and legally, contact Dizayn Homes at info@dizaynhomes.com - we are happy to anwer any questions you have, no matter what your intention re buying property is. Or take a look at the Turkey Central forum, where more information is constantly being added about the local property-buying process.

Turkey further expedites foreign property sales

According to Today's Zaman (my favourite source for news about Turkey), the security check process that until now has delayed property purchases by foreigners for as much as 12 months is soon to be speeded up. The Turkish Land Registry now has greater access to the information, kept by the Turkish Defense Ministry, about what property is militarily sensitive and thus can't be bought by foreigners.

Don't expect too much from this news just yet though - all it means in practical terms is that the Land Registry can carry out the checks themselves instead of passing the documentation to the Defense Ministry. But if this can be taken one step further and the information made available to the Land Registry at a local level, potentially foreign property buyers will be able to purchase property in one day, just like Turkish buyers!
Source: Today's Zaman,

**UPDATED FLASH MESSAGE FROM THE BRITISH EMBASSY IN ANKARA**

"We can now confirm that the law relating to the purchase of property by foreigners in Turkey was ratified by Turkish Parliament on 7 January 2006 and is now in force." Official website of the British Embassy in Ankara, advice for Britons seeking to purchase property in Turkey

This long-awaited law, ratified at the beginning of 2006, finally standardised the rules affecting Britons, Americans and other nationalities who want to buy property in Turkey.

What is the new legislation?

• You can own up to 2.5 hectares or 25,000m2 of land or property (You can apply to the Council of Ministers to increase this to 30 hectares or 300,000m2 but acceptance isn't guaranteed)
• You can't buy in a military or security zone
• The same rights apply to you in Turkey as apply to Turkish property buyers in your country (ie Turkish citizens and companies can buy and own property in Britain and the US, so British and US citizens and companies can buy and own property in Turkey)
• British citizens can pay for property in either Turkish lira (YTL) or in British pounds (GBP)
• You can transfer money via your bank without limit
• Your application to buy your property must be registered at the local Land Registry
• You can buy in a village or rural area
• Your application to buy must be checked by the Turkish military
• You need only pay tax on their purchase in Turkey, not in the UK as well
  

For more information visit the Turkish Embassy website's special section on Buying property