TURKEY 27th November 2006

Demand outstrips supply by

500,000 units per year

Mortgages shortly available

No foreign property
ownership restrictions

One of the strongest

European property
markets 2007
 Turkey
Property prices 40-50% less than in Eastern Europe

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TURKEY AT A GLANCE
Getting There
Area: 780,580 km2
European airlines fly directly year
Climate: Temperate
round into Turkey. Cheap flight
Time zone: GMT/UTC + 2 operators EasyJet now run a daily
Population: Over 70 million flight to Istanbul from the UK, with
Language: Turkish (official) prices starting from just £30.
Capital city: Ankara
Approximate flight times to Istanbul:
Political system: Republican parliamentary
democracy from London 31/2 hrs
Currency: New Turkish Lira (YTL) from Dubai 2 hrs
International airports: 7 (including Istanbul) from Moscow 31/2 hrs
Date of EU accession: Expected in 2015

Turkey 2 Ready2invest
 Why Invest in Turkey?
STRONG ECONOMIC GROWTH
Turkey is the 16th largest economy in the world with an
expected GDP of $382 billion, which will put the Turkish
economy ahead of Belgium, Switzerland and Sweden in 2006.
Bear in mind that 45% of the Turkish economy is unrecorded
too, meaning it is actually much larger than publicly stated.
Turkey is also among the top 7 emerging markets, with one
of the most open, dynamic and internationally integrated
economies in the region. Indeed, some large clients of
PriceWaterhouseCoopers regard Turkey as a faster-growing
market than China, India and the rest of the so-called
E7 countries. As economic growth translates into increased
spending power, there will be a strong upward pressure on
property prices.

ECONOMIC AND POLITICAL STABILITY

The economic transformation in Turkey has been dramatic,
especially the lowering of inflation, and the country is now
more stable economically and politically than ever before.
Turkey has been a member of United Nations since 1945 and
a member of NATO since 1952. It has also been a secular
state since 1923 where religion and the state is separate.
SERIOUS HOUSING SHORTAGE
A rapidly growing, young population coupled with swift
urbanisation has led to a severe housing shortage in Turkey.
According to a recent study, the country needs more than 5
million new houses by 2010. Furthermore, inefficient financial
institutions have historically hindered developer’s ability to
secure financing, compounding the housing deficit.
SET TO JOIN THE EU OR CLOSELY CONVERGE BY 2015
Turkey has always had very close ties with the EU. In 1996,
a Customs Union came into effect between Turkey and the
EU, creating the closest economic and political relationship
between the EU and any non-member country. Last year,
Turkey met all of the Copenhagen Criteria, the political
criteria which are the pre-requisites for starting the full EU
membership negotiations, and this has already begun to
impact property prices.
INTRODUCTION OF A MORTGAGE SYSTEM
Draft mortgage law will be ratified in 2006, stimulating
demand for domestic housing and driving house prices
upwards. Right now, property has to be bought with cash or
bank loans at really high interest rates. When new legislation
is ratified by the Turkish Parliament in 3 months, the local
market is set to soar. The same law will allow foreigners to
secure mortgages, which will further boost property prices
in Turkey.
LIBERALISATION OF FOREIGN PROPERTY
OWNERSHIP LAWS
New legislation was ratified in December 2005 permitting
foreigners to own Turkish property. Now, 100% foreign
ownership is permitted, as well as 100% repatriation of profits
and dividends, creating a favourable climate for investing in
Turkish residential property.
BOOMING PROPERTY MARKET
Due to the arrival of mortgages and the growing interest in
foreign property investors the dynamics of Turkey’s property
market could be compared to those of Spain 20 or more years
ago (only better), and the country could well emulate this
growth and development pattern. In a study carried out by
MasterCard in December 2000, Turkish nationals were asked
what they would do if they had an additional $20,000. Thirty-
five per cent said they would buy a house. (For respondents in
the lower to middle income brackets, this figure was 50%.)

Turkey 3 Ready2invest
 Why Invest in Turkey?

Ten Reasons Why We Love Turkey

Did you know...
continued..
• The only city in the world located on two
MASSIVE FOREIGN INVESTMENT
continents is Istanbul, which was the capital
When Turkey began the process towards EU accession last
of three great empires (Roman, Byzantine and
year, it immediately led to a surge in international and
Ottoman) for more than 1,700 years.
foreign direct investment, particularly into Istanbul. Foreign
investment pouring into the country is currently estimated
• Two of the seven ancient wonders of the world,
at $10 billion dollars per year.
the Temple of Artemis and the Mausoleum at
Halicarnassus, are located in Turkey.
STRONG AND GROWING LOCAL MARKET
High population growth and fast urbanization are the most
• Julius Caesar proclaimed his celebrated words,
important factors triggering housing demand in Turkey.
“Veni, Vidi, Vici” (“I came, I saw, I conquered”)
With a local population of more than 70 million, Turkey
in Turkey when he defeated the Pontus, a
is among the world’s most populated top 20 countries. The
formidable kingdom in the Black Sea region
country’s population growth rate is 2% per year, well above
of Turkey.
the world average. Surprisingly, 70% of the population is
younger than 35, which indicates a strong and growing
• Turks introduced coffee to Europe and the tulip
local market.
to the Dutch.
LARGE EXPATRIATE COMMUNITY
There are about 3.4 million expatriate Turkish citizens, • St. Nicholas, who became popular as Santa
90.5% of whom live in western European countries. It is Claus, was born in Demre on Turkey’s
estimated that more than 2 million Turks live in Germany Mediterranean Coast.
alone, of whom more than 47,000 have established small-
and medium-sized enterprises with a total annual turnover • The Famous Trojan Wars took place in western
of about $25 billion. Much of this money finds its way back Turkey, which is marked with a wooden statue
to Turkey, where it can be used to buy property. of the Trojan Horse today.

• Anatolia in Turkey is the location of the first

Turkey’s housing shortage is estimated to
be 500,000 units per annum (McKinsey
Global Insitute) so demand for new homes
is expected to remain very strong for
some years.
known beauty contest – judged by Paris,
with Aphrodite, Hera and Athena as leading
participants.
• Turkey provides 70% of the world’s hazelnuts;
the nut in your chocolate bar is most probably
grown in Turkey.

Turkey 4 Ready2invest
 Turkey’s Political Foundation
During the last year you may have heard a lot of news
about how Turkey was set to start negotiations to enter to
EU. While these events have grabbed the headlines, the
story to report about Turkey has so much more depth and
vitality to it than one political process. This is about the
re-emergence of one of the old centres of global power.
In 1923, the great Turkish Attaturk established the modern
and secular state of Turkey. He was determined, and has
been successful, in establishing a nation populated primarily
by Muslims but where religion and the state are clearly
separated. This has enabled Turkey to develop modern
institutions. Its powerful military is constitutionally
empowered to ensure that the secular nature of the state
is not challenged.
Historically, Turkey’s institutions have not always been
democratic and in the past there were human rights
problems. Since 1980, however, Turkey has been moving
increasingly towards a Western democratic profile. The
Rubicon was crossed in December 2005 when Turkey was
deemed to have met the “Copenhagen Criteria”, enabling
the country to open talks with the EU. This event in
itself is confirmation that Turkey’s democracy is
significantly entrenched.
Turkey
Today, the government is led by Recep Erdogan, whose
party, The Justice and Development Party, combines
economic liberalism with Islamic social values. Recep’s
programme consists of driving a programme of economic
liberalisation, cleaning up the country’s human rights
record, and getting Turkey into talks with the EU.
Specifically, the Erdogan government is committed to:
• running a fiscally responsibly budget
• reinventing government, enabling private
businesses to thrive
• ongoing privatisation
• working in collaboration with the IMF
and the World Bank
• implementing all necessary laws in line
with EU requirements
While there is much debate as to whether EU entry is good
for Turkey and Europe, given that, at best, entry is ten
years away, it is the changes being wrought now that are
important. In order for Turkey to entertain any thoughts
of starting negotiations for entry, it had to meet what are
called the “Copenhagen Criteria”. These are the political
pre-requisites for starting negotiations. That these Criteria
have been met and Turkey began talks on 3rd October
2005 should give investors even more confidence in this
burgeoning economy.
5 Ready2invest
 Tax

“The additional costs associated with a property purchase such as legal fees, notary charges and property tax work
out to be less than half of the Spanish equivalent at 5% of purchase price versus 10% of purchase price.” 1
Channel 4

As with all tax systems, the rules in Turkey are complex and you are strongly advised to seek professional advice from
a tax specialist. However, here is a guide as to what you can expect.2

CAPITAL GAINS TAX PROPERTY TAX

Capital gains tax in Turkey, whether for an individual or a
company, is treated as part of general income tax. Personal
income tax varies from 15-40%. Basic corporate income tax
levied on business profits is 30% in Turkey, but there are plans
for 2006 to reduce this to 20%.
Property taxes are paid each year on the tax values of land and
buildings at rates varying from 0.1% to 0.6%. In the case of
the sale of property, a 1.5% levy is paid on the sales value by
both the buyer and the seller. The rates are applied twice for
property located in the Metropolitan Municipality areas.

Currently, if you hold on to a property for 4 or more years
after the date of purchase, you are not required to pay income
tax on capital gains at all.
VALUE ADDED TAX (VAT)
VAT (KDV in Turkish) fall within 2 price brackets. 1% is due
on property less than 149m2, 18% due on property of 150m2
or over.
STAMP TAX
Stamp duty applies to a wide range of documents, including
contracts, notes payable, capital contributions and letters of
guarantee. Stamp duty is levied as a percentage of the value of
the document at rates ranging from 0.15% to 0.75%. Stamp
tax is payable by the parties who sign a document. Each and
every signed copy of the agreement is separately subject to
stamp tax.
Buildings and land owned in Turkey are subject to real estate
tax at the following rates:
• Residences: 0.1%
• Other buildings: 0.2%
• Land: 0.1%
DOUBLE TAXATION TREATIES
Turkey has signed bilateral tax agreements with 60 countries,
including the UK, which means you will not be required to
pay income tax on capital gains twice.
UK TAX SPECIALIST
If you would like to speak with a UK accountant with
regards to your tax position, we recommend Drew Hazell
at Taylor Bradshaw and find him highly knowledgeable.
His number is 01799 525 407.
1. Sarah Vaughan, “Turkey has all the Trimmings”, available at
www.channel4.com/4homes/buyingabroad/countryguides/guide_turkey_06.html
2. See All About Turkey at http://www.allaboutturkey.com/tax.htm. Primary source
reports from Foreign Economic Relations Board (DEIK) and Price
Waterhouse Coopers.

Turkey 6 Ready2invest
 Istanbul
Turkey’s No.1 Hotspot
All eyes are on the Turkish city of Istanbul in 2006, after
property investors reaped returns of up to 85% last year.
There is now a feeling of anticipation and excitement in the
air. Turyap, one of Turkey’s largest real estate firms, estimates
residential property prices in Istanbul will rise 80–120% this
year, as foreign investment, the start of long-delayed talks to
join the EU and the launch of mortgages spurs the market.

Ranked as the top real estate development

market by Urban Land Institute and
Price Waterhouse Coopers

Turkey 7 Ready2invest
 Why Istanbul?
UP TO 60% CHEAPER THAN EASTERN EUROPE
According to Ferhunde Ozguler, head of international
relations at Turyap, property prices in Istanbul are still
50–60% less than the Eastern European average and 80–
90% less than the general European average.
SOARING POPULATION
With its area of 5,712 km2, Istanbul covers only 0.7% of
Turkey, but it holds more than 15% of the population
within its geographic boundaries. Because of continuous
immigration from the rural areas, the city grows rapidly,
by about half a million persons per annum. Each year,
1,000 new streets are constructed within the city, and
brand new settlements rise on the east-west axis. The
population of the city doubles every 12 years, pushing up
demand for residential property.
MASSIVE HOUSING DEFICIT
Istanbul accounts for 10% of the housing gap in Turkey.
There is currently a deficit of 500,000 units in Turkey,
with the demand for newly built buildings in accordance
with the new earthquake building regulations fuelling the
property market even further.
MAGNIFICENT HISTORIC CITY
Historically at the crossroads of Europe and Asia, Istanbul
is a truly magnificent city. The mighty Bosporus Sea flows
through the city bringing a vital trade link, with ships
going through 24 hours a day. It also brings drama and
beauty to an already buzzing cosmopolitan city. Think
Sydney harbour meets Rome. In fact, Istanbul was
formerly called Constantinople and was once the capital
of the Eastern Roman Empire.
STRATEGIC LOCATION
Situated on the connecting point between the two
continents, Istanbul is strategically placed in terms of
global interactions. The city has been dubbed the capital
of “Euro-Asia”, and acts as an international gateway for
several regions. The development in Tasdelen is ideally
located only 20 minutes’ drive from central Istanbul, in
one of the safest areas in terms of earthquake risk and
only 2 kilometres from Yenidogan, selected by Bill Gates
as the new silicon valley of Turkey.
Turkey
KEY ECONOMIC PLAYER
Istanbul accounts for around 23% of Turkey’s total GDP.
The city’s rapid pace of urbanization, its population
density, and its centrality to the Turkish economy may
well make it the most important metropolis in the Middle
East and Eastern Europe.
THE COMMERCIAL AND FINANCIAL CENTRE
OF TURKEY
Throughout the ages, Istanbul has been a centre of
economic activity, largely due to its geographical location
at the meeting point of Asia and Europe, the Black Sea
and the Mediterranean. The city serves as a junction
between land and sea trade routes: 36% of the total
exports and 40% of the total imports of Turkey are made
via Istanbul.
MASSIVE FOREIGN INVESTMENT
Since Turkey began the road to EU accession in 2005,
Istanbul has been flooded with foreign investment. UAE-
based Dubai Holding plans to build a pair of twisting
skyscrapers in Istanbul for shops, offices, flats and hotels
in a $500 million investment. IKEA opened a store in
Istanbul in 2005, and 2006 will bring Harvey Nichols.
and a new Soho House Hotel. Conde Naste even
designated Istanbul as their top tourist destination for
2006. A record number of businesses are now establishing
bases in Istanbul, and all require professional staff who in
turn require decent accommodation to buy and let. This
is fuelling demand, inflating rental yields and pushing up
residential and office property prices.
INCREASING AFFLUENCE
Half of the dominating 500 industrial enterprises of
Turkey have their factories and business headquarters
in Istanbul. Not only is Istanbul the country’s centre of
finance and culture, it is also becoming a regional centre
for global companies such as Philip Morris, J.P. Morgan-
Chase, Coca Cola, General Electric, Proctor & Gamble
and Microsoft. Buoyed by the EU talks, foreign companies
are pouring into Istanbul, creating well-paid jobs and
bringing increasing affluence to the city. As Turkey’s large,
young population gets richer, there will continue to be a
strong upward pressure on property prices.
8 Ready2invest
 Finike
‘Turkey is expected to become one of the
best performing markets for property in
Europe by 2007’ - Amberlamb

Turkey 9 Ready2invest
 Why Finike?
TURKEY’S UNDISCOVERED HOTSPOT
Located between the international resort of Antalya to the
east and the established tourist hotspot of Bodrum to the
west, Finike has remained untouched by mass tourism.
The neighbouring town of Kemer was in a similar situation
two years ago but it has experienced increasing demand
for property and 25% capital growth over the last two
years. With the introduction of a new coastal road, this
rapid growth of nearby regions, along with the growing
interest of property developers and investors towards the
southern coast, is set to reach Finike next.
IMPROVING INFRASTRUCTURE
Finike is now very accessible via road, air and sea. There
are frequent and cheap flights from London airports to
Antalya, and this airport is just over an hour’s drive from
Finike along the fast, new coastal road. The marina in
Finike is the main point of entry for sailors from the
southern countries1 and other ports of the south coast,
and has a capacity for 350 yachts2. Planning permission
has been granted for a few 5-star hotels along the
frontline to further the appeal of the town but to retain
the authenticity of the area, tight planning restrictions
are in place.
STEADY CAPITAL GROWTH
Due to the relaxation of foreign property ownership
laws earlier this year in Turkey, the country as a whole
is predicted to become one of Europe’s strongest
property markets in 2007. It has been estimated by
Amberlamb that next year will provide some 12%
capital appreciation3 across the country as a whole. In an
emerging hotspot such as Finike this figure is likely to be
considerably higher.
CHANGING MORTGAGE LEGISLATION
Draft mortgage law will be ratified in 2006, stimulating
demand for domestic housing and driving house prices
upwards. At the moment, property in Turkey has to
be bought with either cash or bank loans at very high
interest rates. When the new legislation is ratified by the
Turkish Parliament, the local market is set to soar. The
same law will allow foreigners to secure mortgages, which
will further boost property prices in Turkey.
Turkey
GROWING LOCAL MARKET
Many wealthy Turks own holiday homes in Finike.
Furthermore, when mortgages become available to
individual homebuyers in Turkey, the middle classes can
also afford second homes. As a growing local market
ultimately assists in an onward sale of property, this is
great news for a property investor.
LONG SEASON
There are on average over 300 days of sunshine in the
Finike region annually and the season is as long as that of
Northern Cyprus. Temperatures rise up to the mid-thirties
in the heart of the summer, and even in the winter it is
very rarely cold. The area has the mildest winter climate,
the highest seawater temperature and the longest summer
season in all of Turkey. All this ensures a lengthened rental
season, helping boost rental yields.
LOCATION, LOCATION, LOCATION
Near Mount Olympos of Antalya, surrounded by
lush, green fruit orchards and fronted by the glistening
Mediterranean Sea, is Finike - a small fishing town with
plenty to speak for it. The sandy beaches stretch 22km
along the coast to the east of Finike, towards Antalya, and
to the west rugged cliffs and authentic nature dominate
the landscape. Around the town there are also various
cultural-historically valuable destinations like the sunken
city of Kekova and the Lycian town of Limyra.
PLENTY TO DO
Finike area is a place for activities. The picturesque local
marina provides great facilities for yachting, fishing and all
types of water sports. Other sporting attractions include
the golf clubs near Antalya4 and the option of skiing in
the Saklikent ski resort5, which increases the appeal for
the area in the winter. At certain times of the year, it is
possible to ski in the morning and swim in the sea in
the afternoon.
1. http://www.blueflag.org/blueflag/2006/Turkey/Antalya/SeturFinikeMarina
2. http://www.worldwide-yacht-charter.com/mediterranean/yacht-charter-antalya.php3
3. http://www.londonstockexchange.com/en-gb/pricesnews/investnews/article.htm?ArticleID=17912208
4. http://www.gototurkey.co.uk/index.php?submen=13&menu_id=363
5. http://www.saklikent.com.tr/
10 Ready2invest
 FAQ
Q) What nationalities can buy in Turkey?
A) Turkey has a reciprocal agreement for the purchase
of land and properties with the following countries:
Germany, Austria, Switzerland, Belgium, Holland,
UK, Ireland, Spain, Italy, Canada, Luxembourg,
Norway, Australia, France, Greece, and various
other countries.
Q) What documentation will I need?
A) Your passport is the only documentation you will
need to purchase a property in Turkey.
Q) Do I need a visa to enter Turkey?
A) You will need a visa to enter Turkey and these can
be obtained at Immigration once you arrive. This
will cost £10 for a UK citizen and will be valid for
3 months.
Q) How do I bring funds out of Turkey?
A) Because of the change in law (Decree 32, August
1989) the Turkish Lira is now convertible so proceeds
of the sale of a property can be converted to whatever
currency you select and subsequently transferred to
the country of your choice.
Q) Can I get a mortgage in Turkey?
A) Fidentia, a specialist overseas Mortgage brokers, say
that due a bill being passed in the Turkish courts two
months ago which lead to a change in legislation,
there is no longer a legal restriction on foreign
investors obtaining a mortgage in Turkey. There are
already loan products existing, local Turkish finance
companies are offering secured loans, this however
isn’t regulated and isn’t a recommended route to
go down. This change in the law will mean that
mortgages will be available as soon as three months,
which will have a dramatic effect on the Turkish
property market.
Turkey
Q) Will I have to pay tax or charges when bringing
funds into Turkey?
A) There are no government charges for transferring
funds, but your bank at home will charge you
transfer fees and receiving banks in Turkey normally
have a small charge also. There are government tax
charges when buying a property and annual property
taxes also.
Q) If I sell my property, can I freely transfer my funds
out of Turkey?
A) Yes, Turkey has a very liberal investment climate,
including free (international) movement of capital,
profits, dividends and salaries, free-trade zones and
subsidies. Again, small bank charges may apply.
Q) What religion(s) is most established in Turkey?
A) 99% of the Turkish population is Muslim. However
due to the nature of the secular state, everyone
in Turkey has full freedom of religious belief. In
Turkey you will find Catholic, Orthodox, Protestant
and Armenian churches, as well as Synagogues,
and everyone is free to practice the religion of
his choosing.
Q) Are double taxation treaties in place?
A) Turkey is a signatory to a treaty for the prevention
of double taxation with 60 countries throughout the
world, including the UK.
11 Ready2invest
Contact Details
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Chesham House
1 Chesham Place
Brighton
BN2 1FB
England

T +44 (0) 1273 627 900

F +44 (0) 1273 627 901

www.ready2invest.co.uk
info@ready2invest.co.uk