Turkey law change: no need to panic!

A new Change to Turkey property law will have no real negative effect on investors, according to one expert...

John Howell, partner at The International Law Partnership LLP explained: “The Constitutional Court of Turkey, the highest legal body for constitutional review cancelled a law last week allowing sales of real estate to companies established by foreign firms.

“Despite this, there is no need to panic. For the average UK buyer, Turkey is still a safe place to purchase property. The majority of private buyers will not be affected by the annulment of the law allowing the sale of property to foreign companies.

“Instead, Turkey is a place where, over the next few years, you will see increasing numbers of people wanting to buy holidays homes simply because it is a beautiful and interesting country and because it is reasonably easy to get to.

Steadily rising prices

Mr Howell added: “Once the current excess of supply has been absorbed, this should therefore, lead to steadily rising prices. Not at 20 or 30 per cent per year but at a more normal 5 or 10 per cent per year. At the same time, as more and more tourists visit Turkey and there should be a stronger and stronger rental market.

“People are living in Turkey permanently because they love the place and because it is cheap. You can live very well in Turkey on your state retirement pension, which many people find difficult in the UK. Turkey (together with a number of other countries) is likely to see the benefit of a rapidly growing population of Western European retirees.

Due diligence still ‘essential’

Mr Howell concluded: “However, there are some restricted areas for foreign individual buyers in Turkey such as military zones, rural lands and a limit of 30 hectares. Up until now, many foreign buyers intending to purchase a property zoned in these restricted areas were setting up an inactive Turkish company. But this recent Change will ensue this route will no longer be available.

“It is for this reason that it is strongly advised for individual buyers to instruct an independent lawyer to complete title deed checks before paying any funds or signing any contracts. It is now vital to confirm you are purchasing a property zoned in the correct area otherwise you will not be able to secure the ownership of the property.”

All of this bodes incredibly well for long term prospects of reunification, and the Northern Cyprus property market can only benefit as a result.