What are The Most Important Types of Real Estate Fees?

Real estate fees are collected from the sale of various types of real estate.

Real estate is a general term for commercial real estate such as houses, lands, fields, buildings, offices, workplaces, shops, etc. All types of real estate, regardless of their type, fall into a subcategory of real estate.

Generally speaking, there are the following 6 types of real estate expenses;

• Title Transfer Fee (Tapu)
• Lawyer Fee
• Real Estate Agency Fees
• Property Tax
• Earthquake Insurance
• Utility Service

1. Land Transfer Fee (Tapu)

When selling real estate, the parties pay the title deed transfer fee. In order to transfer ownership, both buyer and seller are required to pay title deed fees. However, in most cases, only the buyer pays this fee if both parties agree.

Every year, the Official Gazette publishes real estate fees and taxes to citizens. The cost rate for title deeds is the same this year. According to this, in 2022, the buyer and the seller will be charged a transfer Tapu fee of 20%.

In addition to fees in title deed transactions, there are revolving fund fees. The total payment is TL 265/USD 18, the working capital is TL 233/USD 15, and the additional service fee is TL 32/USD 3.

2. Attorney Fees

Attorney fees are freely negotiable between the real estate attorney and the client or consultant. In addition, the Bar Association has a lower limit on lawyers. An amount lower than the fee specified here cannot be agreed. Otherwise, the Bar Association will sanction the lawyer. Therefore, both parties can agree on any amount.

The fees charged by land registries and real estate attorneys to applicants are not always the same. Many factors can affect this fee. While title deeds sometimes require extensive and exhaustive research, sometimes following small procedures is sufficient. Administrative matters and criminal proceedings have very different structures. Here, the workload and scope of legal disputes are the determining factors in determining attorney fees.

3. Real estate agency fees

When you trade with a real estate agent, such as buying or selling real estate, you must pay a commission to the real estate agent.
Therefore, real estate agents receive real estate agent commissions from their real estate purchases, sales, and leases.

According to relevant regulations, the real estate sales commission is 2% of the sales price excluding VAT (18%). Both parties pay this fee.
If there is a written agreement between the parties, both the buyer and the seller can pay a brokerage commission of 4% in total.

4. Property Tax

After buying property in Turkey, you have to pay property tax. This tax varies by city and the type of property you buy. For example, if you buy a property in Istanbul, the annual property tax is 0.2%. Taxes depend on the city you buy from and its type.

5. Earthquake Insurance

TCIP stands for Turkey Catastrophe Insurance Pool. TCIP is a public agency that regulates and administers mandatory earthquake insurance, which places all residences in Turkey under a state guarantee.

Mandatory earthquake insurance is coverage that protects a home from damage caused by earthquakes and earthquake-related landslides, fires, explosions, and tsunamis, to a certain extent.

Mandatory earthquake insurance price calculation takes into account 14 different price tariffs updated annually in Turkey based on 7 risk areas and 2 different architectural styles.

As of January 2022, the unit cost per square meter used to calculate the insurance amount (guaranteed amount) and determined by building type is as follows:

• Reinforced concrete: 1,508 TRY / 102 USD
• Others: 1,040 TL / USD 70

6. Utility Services

Turkish citizens and foreigners can apply for electricity, water and gas subscriptions through the branches and councils of the relevant institutions and by submitting applications online. Utility bills in Turkey vary.

In order to benefit from electrical service, the buyer pays a fee. Residents pay a minimum subscription fee of 165 TRY / 12 USD.

As of 2022, the water subscription fee is 166 TRY / 12 USD.

Gas bills in 2022 are within the normal range for any home smaller than two hundred square meters. For dwellings up to 200 sqm, the buyer must pay a deposit of 775 TRY / 52 USD plus 18% tax.

What Happens if Property Fees Are Not Paid in Turkey?

The process of buying and selling real estate involves certain fees. If the parties fail to pay these fees, the Land Registry will not complete the requested transaction.

Real estate is the most important property right issue. Legal matters arising from this field have significant financial implications for individuals. However, real estate law legislation is complex. Therefore, it is always in people's interest to turn to a knowledgeable and experienced real estate lawyer when they need legal assistance in real estate law or when a dispute arises. Otherwise, monetary sanctions are possible.

Should Foreigners Pay for Real Estate in Turkey?

Under Turkish law, foreigners enjoy the same rights and obligations as Turkish citizens. Therefore, foreigners have no property tax exemption.
In metropolitan areas, the tax rate for dwellings is 1 part per million; in non-urban areas it is 1 part per thousand. Workplace and corporate property tax rates are 4‰ in metropolitan areas and 2‰ in non-metropolitan areas.