What Violations Can Affect the Price of Real Estate in Turkey?

The Importance of Compliance with Real Estate Laws When Buying and Selling Properties

Compliance with real estate laws is essential to ensuring a safe and sustainable investment, as it directly affects the value of the property and its ease of sale or rental. On the other hand, violations can lead to financial or legal losses.

• Stable Market Value: Properties that comply with laws maintain their value and remain attractive to buyers and investors.
• Ease of Sale and Rental: Legally compliant properties facilitate the selling and renting process without legal complications.
• Avoiding Fines and Penalties: Non-compliance may result in large financial fines or even the demolition of the violating property.
• Increased Mortgage Opportunities: Banks easily grant loans for legally registered properties compared to non-compliant ones.
• Avoiding Legal Risks: Properties that comply with regulations prevent their owners from facing legal disputes that could lead to losing the property or complicating its transfer process.

Legal Violations and Their Impact on Property Prices

1. Failure to Register the Property in the Title Deed (Tapu)

Registering the property in the title deed (Tapu) is a fundamental step to securing ownership rights and officially establishing ownership. Some properties in Turkey are sold without proper registration, which exposes the buyer to significant legal risks. The absence of an official title deed makes the property legally worthless, meaning the owner cannot easily sell it or use it as collateral for bank loans.

Additionally, these properties may become subject to legal disputes between the owner, the developer, or government entities, potentially leading to a partial or complete loss of market value.

Read more: Types of Title Deeds in Turkey

2. Encroachments on Public Land or Being Located in a Protected Area

Encroachments on public land or construction in environmentally protected areas are serious violations that significantly affect property prices. In some cases, properties may be built on land not designated for residential use or in areas where construction is prohibited under urban planning regulations.

This type of violation exposes the owner to the risk of losing the property, as authorities may decide to demolish illegal buildings or impose hefty fines. Moreover, potential buyers avoid such properties due to their legal risks, leading to a significant drop in market value.

3. Using the Property for a Purpose Other Than Its Permitted License

Every property in Turkey is granted a license that specifies its intended use, whether residential, commercial, industrial, or tourism-related. Using a property for a purpose other than what is permitted, such as converting a residential apartment into a commercial store without official approval, may result in financial penalties or even an order to shut down the unauthorized activity.

This type of violation reduces the property's market value, as the new buyer may face difficulties in adjusting the legal status of the property or utilizing it in a legally acceptable manner.

Construction and Engineering Violations and Their Impact on Property Prices

1. Unlicensed Construction or Building Outside Zoning Plans

Unlicensed construction or expanding beyond approved zoning plans is among the most common violations in Turkey's real estate market. In some cases, developers construct buildings without obtaining the necessary permits or extend structures beyond the permitted area, making the property subject to legal sanctions. This type of violation significantly reduces the property's price, as authorities may issue demolition orders for non-compliant sections, making the property less attractive to potential buyers.

Moreover, unlicensed properties may struggle to obtain essential services such as water and electricity, further complicating their sale or rental. Additionally, banks and financial institutions generally refuse to finance unlicensed properties, limiting investment opportunities.

2. Failure to Meet Safety and Quality Standards

Turkey places great importance on building and safety standards, especially after experiencing earthquakes in certain regions. Therefore, strict requirements are imposed on new developments to ensure earthquake resistance and protect lives and property. Properties that do not comply with earthquake-resistant building standards or that use substandard construction materials lose a significant portion of their market value, as buyers prefer modern properties that adhere to safety regulations.

Furthermore, non-compliant properties may face legal issues related to obtaining residency permits, and owners may be prohibited from making future modifications. Additionally, home insurance may be unavailable for such properties or may come with high premiums, increasing the financial burden on owners and reducing the likelihood of selling the property at a competitive price.

3. Illegal Modifications and Additions to the Property

Some property owners make modifications or expansions without obtaining official approval, such as adding balconies, constructing additional floors, or dividing interior spaces in ways that do not meet official specifications. These illegal modifications affect the property’s price, as the future owner may be required to remove the unauthorized alterations or pay fines to legalize the property’s status.

Additionally, such modifications may compromise the structural integrity of the building, especially if they are carried out without proper engineering supervision, ultimately reducing the property’s market value. Moreover, owners may face legal issues when attempting to sell the property, as authorities may refuse to issue the necessary documents to transfer ownership due to existing violations.

Tax and Financial Violations and Their Impact on Property Prices

1. Delayed Payment of Property Taxes

In Turkey, property owners must regularly pay annual property taxes, which include real estate taxes and municipal service fees. Failure to pay these taxes on time results in accumulating fines, and the property may be seized until outstanding debts are settled, creating an additional financial burden on the owner.

Buyers avoid purchasing properties with unpaid tax obligations, as these debts may lead to legal issues when transferring ownership or registering the property. Moreover, repeated delays in tax payments may result in the property being blacklisted by tax authorities, making it more difficult to sell or rent.

2. Failure to Declare the True Sale Price When Registering the Property

Some sellers register the property in the title deed at a lower price than the actual sale price to reduce the tax burden. This practice is illegal and may lead to legal issues when reselling the property, as authorities may impose additional taxes if they discover discrepancies in the recorded sale price.

Furthermore, potential buyers may face difficulties obtaining mortgage loans if the registered price is lower than the actual market value, as banks rely on the declared value to determine the financing amount. Additionally, the new owner may be required to pay future tax differences if financial records are audited, increasing their financial liabilities.

How Imtilak Real Estate Helps You Avoid Buying a Non-Compliant Property

Given the complexities of the Turkish real estate market and the potential risks associated with property violations, relying on a specialized and trustworthy company is crucial for securing a safe investment. Imtilak Real Estate, as a company specializing in real estate in Turkey, offers comprehensive consultancy services to help buyers verify the legal status of a property before purchase.

The company also provides analysis and auditing of real estate records and assists clients in ensuring compliance with all local regulations, guaranteeing a smooth and secure buying process. In addition, Imtilak Real Estate offers professional investment advice on the safest and most profitable real estate options, helping clients make well-informed decisions that yield substantial returns.