Installment purchase of an apartment in Istanbul

Purchasing an apartment in Istanbul through installments means entering a new world and a golden opportunity for investment. The city of Istanbul, the shining jewel of the Bosporus Strait, with its unique historical, cultural, and natural attractions, has always been a focal point for tourists and investors from around the world. In recent years, buying property in Istanbul has become increasingly popular due to various factors, including the boom in the tourism industry, rising property values, and favorable investment conditions.

One of the attractive ways to buy a home in Turkey is through installment plans. Purchasing an apartment in Istanbul on installments allows you to become the owner of your desired apartment by making an upfront payment and monthly installments, taking a significant step toward realizing your dreams. Buying an apartment in Istanbul is considered an important investment for many people. However, the high cost of an apartment in major cities can be inaccessible for many individuals. In such cases, buying an apartment in Istanbul through installments can be an appealing option.

In this comprehensive and specialized article about purchasing an apartment on installments in Istanbul, we will cover the following topics: purchasing an apartment on installments in Istanbul, the conditions and steps involved in buying an apartment on installments in Istanbul, the payment conditions for purchasing an apartment on installments in Istanbul, the advantages of buying an apartment on installments in Istanbul, the disadvantages of buying an apartment on installments in Istanbul, obtaining residency and citizenship in Turkey through installment apartment purchases in Istanbul, and important key points for purchasing an apartment on installments in Istanbul.

Conditions and procedures for buying apartments in Istanbul in installments

Choosing an Apartment: The first step in purchasing an apartment on installments in Istanbul is selecting the apartment you want. You can find your desired apartments through real estate websites, Iranian real estate agents, or by visiting various projects in person. When choosing an apartment, pay attention to important factors such as location, size, amenities, price, and installment conditions.

Negotiating with the Developer: After selecting the apartment, you need to negotiate with the developer. At this stage, you should agree on the price, installment conditions, payment methods, delivery time of the apartment, and other details. Be sure to ask all your questions thoroughly during the negotiation and make sure you are fully aware of all the conditions of the purchase.

Signing the Contract: After reaching an agreement with the developer, you need to sign the apartment purchase contract. This contract clearly outlines all the conditions of the apartment purchase. Before signing the contract, make sure to read it thoroughly and be fully aware of its contents. If necessary, seek the assistance of a lawyer or legal advisor to review the contract. Paying the Down Payment: After signing the contract, you will need to pay the down payment to the developer.

Methods of buying property in Türkiye in installments

There are two methods for purchasing property on installments: buying ready-to-move properties and buying properties under construction. Buying ready-to-move properties in Turkey, especially on installments, is an attractive option for both domestic and foreign buyers. With a dynamic real estate market, Turkey offers numerous investment opportunities. One of the advantages of buying ready-to-move properties is that buyers can receive their property and enjoy its amenities without having to wait for construction to be completed.

It is recommended to pay special attention to the geographical area and its infrastructure before proceeding with a purchase. Popular cities such as Istanbul and Antalya are great options for buying due to their services and amenities. Additionally, reviewing the installment conditions offered by developers is of high importance. Some developers offer various conditions for installment payments, including low down payments and long-term installments.

Buying off-plan properties in Turkey can be an opportunity for investment, but to ensure a successful purchase, there are several key points to consider. Below are some recommendations for buyers of such properties:

Research Before Buying Property in Turkey

1. 1. Developer Research: Before anything else, researching the developer of the project is crucial. Reviewing their track record, construction quality, and previous projects will help ensure their credibility.

   2. Legal Documentation Review: Make sure that all permits and legal documents related to the project are available and valid. This includes construction permits, design plans, and official contracts.

   3. Location Analysis: The location of the property is of great importance. Evaluating local amenities, access to public transportation, shopping centers, and facilities can significantly impact the future value of the property.

   4. Payment Plans and Installments: Carefully review the payment terms and installment plans. Ensure that the down payment and installments align with your financial capacity and that no unexpected changes in terms can occur.

   5. Delivery Timeline: Ask about the delivery date of the property and the project timeline. Be aware of any potential delays to avoid disruptions in your financial and personal planning.

   6. Future Value Forecast: Consider factors that may affect the future value of the property. For example, new infrastructure projects or developments in the area could increase its worth over time.

Advantages of buying apartments in installments in Istanbul

Opportunity for Investment with Low Capital: Purchasing an apartment on installments in Istanbul allows you to become a property owner with a relatively low down payment. The remaining amount can be paid in monthly installments without the need for high-interest payments. This makes it an ideal option for those with limited capital.

Variety of Apartments: There is a wide range of apartments available in different areas of Istanbul with varying prices and installment conditions. You can choose the apartment that suits your taste, needs, and budget. From luxury apartments in modern skyscrapers in the city center to seaside apartments with stunning views, the variety of apartments in Istanbul allows you to find your ideal property.

Profitability: Given the continuous rise in property prices in Istanbul, purchasing an apartment in the city can be a profitable investment. You can sell your apartment at a higher price after some time and benefit from the profits. Buying an apartment on installments allows you to own property in one of the most thriving real estate markets in the world with minimal capital, and enjoy the appreciation in its value over time.

Disadvantages of buying apartments in installments in Istanbul

It is true that purchasing a home on installments in Istanbul can offer advantages such as entering the real estate market with a lower initial investment and obtaining Turkish citizenship through property ownership. However, there are also disadvantages that should be carefully considered before making a final decision.

• Document Limitations

1. No Transfer of Title Until Full Payment is Made: Until all installments are fully paid, the title deed will not be transferred to your name. This means that you are not the legal owner of the property and may face restrictions on fully utilizing it.
2. Restrictions on Obtaining a Loan: In some cases, until the title deed is in your name, you cannot apply for a mortgage loan from Turkish banks.
3. Limitations on Selling the Property: Selling the property before completing all installment payments may be difficult or impossible.

• Financial Issues

1. High Interest Rates: Many installment plans for properties in Istanbul include high-interest rates, which can significantly increase the final cost of the property.
2. Additional Costs: You may be required to pay additional costs such as down payments, transfer fees, and taxes.
3. Risk of Currency Fluctuations: If you are paying your installments in Turkish Lira, a rise in exchange rates relative to your currency could result in a significant increase in your monthly payments.

Risks of buying apartments in installments in Istanbul

• Developer Bankruptcy and Project Freezing There is an old belief in Turkey that anyone who is unemployed can participate in real estate sales, so the risk of encountering fraudsters is quite high. While such issues existed in Turkey a few years ago, since 2018, the government has taken active measures to combat illegal real estate trading. Since September 1, 2020, all real estate transactions must be conducted with the presence of a licensed real estate agent, whose activities and fees are regulated by the Cadastre Department (Tapu Kadastro Genel Müdürlüğü). We recommend reading this article to become fully familiar with the new regulations regarding property purchases in Turkey.

Currently, it is mandatory for construction companies to cooperate with authorized offices or to organize their own sales offices in accordance with the law. Therefore, the issue of unlicensed companies and dishonest real estate businesses in Turkey has ultimately been addressed. Make sure that your representative or developer holds a real estate trading license (Taşınmaz Ticareti Yetki Belgesi).

Sometimes, new construction companies attract buyers with low prices, but due to a lack of experience, they fail to complete the project and go bankrupt. When selecting a property in an under-construction project, it is important to consider the developer’s experience and review their portfolio, which includes examples of completed projects. Experienced developers who have been in the market for a long time value their reputation and business.

The reality of installment payments provides protection against the risk of developer bankruptcy and project freezing during the construction phase, as the investor contributes an amount proportional to the current cost of the project. In the event of the developer’s bankruptcy, the land with the unfinished project is sold at market value, and the proceeds are returned to the investors. Installment payments in the contract should be linked to the construction phases.

• Delay in construction

Most projects in Turkey are executed quickly, within 1 to 2 years. According to data from the Turkish Statistical Institute for March 2022, construction costs increased by 103% over the course of one year and 9.6% within one month. Therefore, there is a significant risk that contractors, due to a lack of credit, may overestimate costs, leading to delays in the project itself.

The construction industry plays a key role in Turkey’s economy, so the government supports developers by subsidizing loans and reducing the tax burden during critical periods. It is important to ensure that the contract specifies the project’s completion date, as well as clauses regarding compensation in case of delays. Changes in the project or costs after the contract is signed should also be carefully considered to protect the buyer’s interests.

Generally, the sale of the project starts after obtaining the construction permit and approval of the plan. Make sure the developer has the following documents:

The land ownership certificate (TAPU) or the municipality land lease contract is required for residential development. The building permit with an approved zoning plan (İmar Durumu Belgesi) is also necessary. The design and floor plans compliance declaration is essential for the project’s approval. Depending on the project stage, different documents may be required: At the construction stage, reviewing the land rights and building permit is crucial. For completed housing, the TAPU status is vital. The Kat İrtifakı mark on TAPU indicates pre-registration under the approved project plan, meaning the developer has not yet completed the second stage of registration. The Kat Mülkiyeti mark means the apartment has been officially registered in the housing shares.

Depending on the type of construction, additional documents may be required, so it is crucial to conduct the transaction with the help of a specialized real estate lawyer in Turkey. To ensure the process proceeds correctly and legally, having an immigration lawyer by your side can be very beneficial. They can assist in reviewing the steps and preventing potential mistakes, ensuring that your immigration process is carried out legally and without any issues.

Obtaining Turkish citizenship by buying an apartment in installments

In Turkey, foreign nationals can purchase property on installments in authorized areas designated by the government. However, it is important to note that if your property purchase is aimed at obtaining a Turkish passport and citizenship, you must have paid at least $400,000 for the value of the property you are purchasing in order to begin the citizenship process. We recommend reviewing the linked article for more information on obtaining Turkish residency through property purchase.

In this case, paying the excess amount for your property purchase in installments will not cause any issues with your citizenship process. However, you can only apply for citizenship after the property’s ownership is registered. In most projects, this means that installment payments are involved. Therefore, investors interested in Turkish citizenship often avoid opting for installments or, if necessary, do so for a short period of time.

So, if you wish to obtain Turkish citizenship through purchasing a property on installments, you must have paid the $400,000 value of the property in order to initiate your citizenship process.

The investment citizenship laws in Turkey have been changing: Until 2018, investment citizenship cost more than $1,000,000 USD. Then, this threshold was reduced to $250,000 USD, and in May 2022, it was raised again to $400,000 USD for transactions concluded after June 13, 2022. The duration of these new regulations is unclear, so making the payment for the property purchase promptly is safer.

There are rare exceptions: Some large developers agree to issue the title deed to the buyer before the full installment payment is made. In this case, the property is registered, but with the installment contract and the title deed, you can apply for citizenship.

Important and key points of buying apartment installments in Istanbul

Here are some recommendations for making a suitable choice when buying an apartment on installments in Istanbul: Check and choose the most reputable developers: It is important to be aware of the developer’s history and reputation. Make sure that the developer you choose is reliable in terms of construction quality and timely project delivery.

• Study the contract carefully: Before signing the contract, review the terms and conditions thoroughly. Ensure that there are no specific clauses such as future price increases, and fully understand all details related to the payment terms and installments.
• Check the location: The geographic location of the project is crucial. Ensure that the area has easy access to public services such as schools, shops, medical centers, and public transportation hubs.
• Check the amenities and facilities: Make sure the apartment you are interested in includes all the necessary amenities. Key features to look for include parking, an elevator, security, green spaces, a swimming pool, and a gym.
• Financial evaluation: It is important to carefully review the costs and the installment payment structure. Check if the final amount is subject to change and if there will be any additional payments required in the future.
• Professional advice: Using the services of a professional real estate consultant can help you make the right choice. They can review the contract terms, explain the advantages and disadvantages, and guide you through the entire purchasing process.
• Visit previous projects: If possible, visit the developer’s previous projects and talk to the residents there. This will help you get an idea of the construction quality and project delivery.
• Check documents and permits: Before making a purchase, ensure that the project has all the necessary permits and legal documents. This includes construction permits, zoning approvals, and ownership documents.
• Evaluate investment return: If your goal is investment, carefully assess the potential return. Study whether the property’s value is likely to appreciate in the future and whether the chosen area for the home is growing or has growth potential.
• Study tax laws: Finally, it is recommended to carefully study the tax laws related to the purchase and ownership of property in Istanbul before buying a property on installments. Consult a legal expert or financial advisor to guide you in this matter. It is advised to conduct thorough research and consult with specialists and independent advisors before making your final decision, to ensure your confidence in the decision and make a secure purchase.

final word

Before purchasing a home in Istanbul, whether in cash or installments, it is essential to familiarize yourself with the city’s neighborhoods and connect with a reputable Turkish consultant and legal advisor. The 4kgroup team, with its experienced staff, is ready to provide you with the best services in property buying and investment.