Turkish Mortgage Act

A Turkish Mortgage Act was planned by the Turkish legislators in the Spring of 2006 so that they can take over the sales of mortgages in Turkey and to make certain that the style to mortgaging is similar to the style utilized by mortgages in the UK.

But here comes the rub. The decision was put on hold last week by the Turkish Prime Minister’s Office and the Turkish Treasury because they don’t see eye to eye on their views.

The reason for this is that the PM’s Office has been supporting a tax refund scheme for first time buyers or those who would want to move up the property ladder. They wanted to get rid of stamp duty and to give out at least 3% tax break for citizens with properties that are mortgaged. But then, the Turkish Treasury is opposing these tax breaks due to a predicted loss of revenues.

To solve this problem, the Turkish Prime Minister has been asked to intercede personally to solve this matter and a second reading of the Turkish Mortgage Act is scheduled to be heard over the weekend. Even though the outcome of these hearings is still undetermined, it is quite obvious that the legislators are trying to tender incentives to investors and buyers.

With the onset of this debate, it is likely that there is going to be a tight competition in the mortgage market even if the tax breaks are not yet put into law. The result of this favors foreigners and tourists looking to buy a property in Turkey: they will have more options to choose from and more affordable mortgages.

With this result, as Turkey is seen with affordable and low mortgages and more opportunities for buyers and investors, this makes the country more viable as an investment proposition. This is floundering, considering that property growth areas are as high as ever: 40% in all key cities.

Posted on: Turkey

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Turkish Mortgage Act

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