Some 10 years ago, almost no one bought a house in Turkey. However, there is an increasing number of British people now purchasing property there.
Frankly, in 1997, buying a house in Turkey was probably not a great idea. The Turkish lira stood at 185,000 to the pound in 1997; by 2002 it had fallen to 2,146,000 to the pound. In other words, if you had bought a £100,000 house in 1997 and sold it in 2002, when you converted the money back into sterling, you would have lost 90 per cent of the value of your purchase. Of course, the house probably went up in value a bit, but not that much.
In 2003, the Government started to get a grip on this problem. Since then, the lira has gone up and down but it has been broadly stable to the extent that a couple of years ago, the Government was able to delete all of the zeros and launch a new currency - the new Turkish lira - which now stands at about 2.70 to the pound.
This, coupled with the availability of cheap property in Turkey, a good climate, low cost of living, improving infrastructure, improved quality of design and construction, the growing popularity of Turkey as a tourist destination, and the prospect of Turkey joining the EU, has led to an increasing number of Brits purchasing there.
However, any Brits opting to purchase in Turkey must ensure they are fully aware of the legal aspects of buying there. Despite recent laws passed in the Turkish parliament to allow foreigners to secure mortgages there, as well as a relaxation of some of the rules governing foreign purchasers, buying in Turkey can still be complicated and laws can be subject to change.
If you intend to buy a property in Turkey, it is absolutely necessary to know the legalities and the importance of due diligence. Employing the services of an experienced, bilingual, and preferably, local lawyer is a good place to start.
Before you start looking for the property investment that suits you, be aware that non-Turkish residents can only own up to a maximum of two and a half hectares of land in property in Turkey.
In addition to the limit on the size of the land that foreigners can own, there are certain bits of land that foreigners cannot own at all. When a foreigner wishes to buy any land in Turkey they must obtain 'military permission' to do so. This will not be granted if the land is classified as militarily sensitive, and you can find that some of the most unlikely land is classified this way.
If the property or site is on land that cannot be owned by a foreigner, it doesn't have to be a major problem. There is a system whereby a foreign buyer can set up a Turkish limited company and purchase through it, even if that company is 100 per cent controlled and owned by them.
Once you have established whether as a foreigner you are even able to purchase your chosen property, it is important, as always, to complete the usual and necessary checks on the property, ie that it has good legal title, a valid construction license and an official certificate permitting habitation of the property.
Once you have sorted the legalities, there is some good news regarding purchasing Turkish property. The property can be paid for in either Turkish lira or a foreign currency and there are also no restrictions about the transfer of foreign currency or Turkish Lira from a Turkish or foreign bank. Tax on the property in Turkey is payable to the Turkish tax authorities as the relevant law requires and Turkey and Britain have a bilateral agreement to avoid double taxation.
The author, John Howell, is a senior partner at the International Law Partnership.
Some information contained within this article may have changed since it was first published. Homes Overseas strongly advises you to seek current legal and financial advice from a qualified professional.