Turkish Mortgage Act

Paul Benedek, director of Solaris Villas, rounds-up the prospective changes to the Turkish Mortgage Act, which could benefit foreign investors.

In the spring of 2006 the Turkish Legislators drew up plans for a new Turkish Mortgage Act to govern the sales of mortgages in Turkey and to ensure that the mortgage market was regulated in a style similar to the UK.

In an interesting turn, the Turkish Prime Minister’s Office and the Turkish Treasury put the new law on hold due to a difference in opinions.

The Prime Minister’s office has been advocating a tax refund scheme for first-time buyers or those trying to move up the property ladder. It has wanted to abolish stamp duty, offering instead a 3 per cent tax break for people with mortgaged properties. However, the Turkish Treasury has been fighting against these tax breaks due to a predicted loss of revenue.

The Turkish Prime Minister has been requested to intervene personally to mediate in this issue. A second reading of the Turkish Mortgage Act is due to be heard in parliament. Although the results of these debates are not yet known it is obvious that legislators are trying to offer incentives to buyers and investors.

Even if tax breaks are not written into the statute, requirements of the new Turkish Mortgage Act could very well see increased competition in the mortgage market. This in turn will give greater choices and more affordable mortgages to those looking to buy property in Turkey.

In a market where property growth levels have been as high as 40 per cent in key areas, this makes Turkey an attractive investment proposition as interest rates are kept low and mortgages affordable.

Posted on: Turkey

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Turkish Mortgage Act

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