Calis Beach and Fethiye Turkey Discussion Forum
Property For Sale in Calis Beach & Turkey => Buying Property in Calis Beach, Fethiye and Turkey => Topic started by: Dream on January 27, 2012, 06:07:52 AM
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I have a buyer who wants to complete asap. I will have own the property for 5 years next month and they don't want to wait until then. I theory I have not made an gains but believe I will be liable for capital gains tax (increase in value of house accrding to the Beledeye office?) Could I ask the buyer to pay me now and get the estate agent to do the transfer next month (after the 5 year tapu date) in order to make sure I don't pay any tax. Alernatively when will I know if I have any tax to pay , who do I pay to could I get buyer to pay as they insist on compleing now?
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If it is a non-Turkish buyer it will take more than a month anyway. If it is a Turkish buyer, get the situation explained and get a significant deposit. The tax will be potentially huge - 25% of the difference between the value on your tapu (piddly little amount) and the tapu to be issued to the new owner (possibly close to the real value) - ask the buyer what he would do. Alternatively, get him to pay you into a UK account and keep your head down. ;)
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Thanks, is there a way of finding out what will be on the tapu? I beieve everything will be sorted within 2 days. Do you think it's possible for them to pay me now and delay contract until 5 years is up?
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You can get the likely value now as it is set by the authorities these days rather than the buyer and seller adding on about 50p to the value but I can tell you if you bought five years ago the value declared then will probably be minimal and the set value in two days will be fairly reflective of the true value. Not knowing the details, even based on a £40k apartment of 5 years ownership you might have something like 20,000 lira (£7,000) on your tapu and the new one might be close to full value (say it it 110,000 lira) £40,000. 40 - 7 = 33, 25% of 33 = a tax bill due to you of £8,250!!
I doubt he'll pay now and wait, get a deposit of serious value and a contract drawn up by a solicitor saying the title deed will transfer to the buyer on <date> at which time he will pay the balance. The solicitor can hold the deposit if it makes him feel better.
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At what stage is the capital gains tax paid...on day of sale and to who?
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Not at the time of sale - in effect at the time of you sending in your tax return in Turkey. Should you decide to do one.
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Thanks for your help
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Pleasure
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me again! Would it be ok to draw up a contract as you suggest and give poa to the estate agent to deal with the title .....what things should I make sure I include in the contract/poa
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Why not ask your agent these questions, that is what you are paying them for. or pay Scunner for his advice and have his agency have the business of the sale and purchase.
Only asking:D
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Hi Scunner,
Sorry to hijack the thread but this has interested me. Firstly, it's good to know the correct price is now registered on the tapus , that should put a lot of people's minds at rest when buying now.
The second thing, I was told you had to pay Capital Gains Tax in the UK for any overseas holiday home you've sold? Or any property that is not your main residence, you have to pay CGT on, and the HMRC somehow know if you have sold a property overseas? I don't know how they actually know, but I've heard that they do know somehow :( I think they watch the activity on our bank accounts too!
I think CGT is 40% in the UK, but I didn't realise you had to pay tax to the Turkish authorities too. That sounds really unfair.
I also heard there's a time span or something whereby you're no longer liable for CGT?
Louisa
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I believe that you are exempt from Capital Gains Tax if you sell at least five years after purchasing.
As from January 2010 TL 7.700 of the profit is tax exempt if you sell before the five years is up.
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I was also under the impression that if you sold after 5 years there was no tax to pay! I'm also assumoing that its 5 years from the issue of the Tapu as well?
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I have also been lead to believe that due to reciprocal tax laws if you pay cgt in Turkey then the same money can not be re taxed in the UK.
How true these 'I have heard' stories are I don't know it would be good if anyone has actually done it and can confirm.
I am not sure how HMRC would know if you have a property in Turkey. I can't see the Turkish government sending Tapu details to them, they can't even get the visa situation sorted without a farce.
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quote:
Originally posted by keng38
I was also under the impression that if you sold after 5 years there was no tax to pay!
That's why he is asking - he has owned it for 4 years and 10 months and is looking to hold off till he has owned it five years so CGT in Turkey is not payable. We discussed that on page one, maybe that's where you got the impression you mention!!!
He was also asking about the tax situation in Turkey so that he could sell in the best way for him. He didn't ask anything about UK taxation.
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Scunner I know that it does not relate to the original question but a couple of people raised a question about CGT liability in the UK.
The rate of CGT depends on your income and rate will vary from 18% to a basic rate tax payer to 28% if you are a higher rate tax payer.
You do not pay full CGT in Turkey and the UK. If you are subject to CGT in Turkey you pay it in Turkey. The CGT liability in the UK is calculated and the amount already paid in Turkey will be deducted and the net amount paid in the UK. If your tax liability is less than you paid in Turkey you pay nothing in the UK. You do not get a refund of the difference from the UK or Turkey.
If your house is your primary residence then it would not be subject to CGT in the UK. If you lived in the UK and owned a house in Turkey you may not have any liability for CGT in the UK.
HMRC expects individuals to declare their liabilities to tax.
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Hi Ovacikpeedoff,
I'm still a bit confused. I thought you paid CGT on any residential property that was not your main residence? So if your main residence was in Turkey, you would then be forced to pay CGT on your UK residence when you eventually sold it or when you die - in which case your inheritors would have to pay the CGT? But I'm sure I was told that there was some kind of time limit in certain circumstances?
I was also told that the HMRC do know your oney movements whether in the UK or abroad, which I think smacks of a nanny state. The only thing I can think is that intelligence from government agencies is passed to and fro?
Louisa
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If you live in the UK and own a property in the UK it will be deemed to be your main residence. Sale of this residence will not be subject to CGT. If you own a property and just rent in the UK your property in turkey will be your main residence. During the recent boom some people living in the southeast could not afford to buy a property in the UK but wanted to get on the housing market and bought in France.
If you own a property in the UK and have a second home in Turkey then the second home would be subject to CGT.
I am sure that MI5 orMI6 do not have this big file in their offices with the list of everyone who has a house in Turkey.
I am afraid this is a little James Bond style. The british government cannot even tell who is using the NHS illegally.
On death it is inheritance tax that is applied.
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Hilarious, Ovacik, you have really made me laugh.!!
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If the Uk don't get you Turkey will, reminder that if a named Tapu owner dies and is not reported to the Tax office at the time of death you will incur a fine, inheritance Tax, you will have to pay 10% of the price of the property if you have a Will and only 1% if you don't have a Will :([|)] (looking for confused and bored).
Don't pay your water bill, fined, don't pay your electric, fined, don't pay your council tax, fined, don't pay ............. fined fined fined and did I mention fined.
Yours
Confused, disheartened, bored.
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Hi we sold last year made a little profit, didnt have any tax bill either in turkey or uk
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I have owned my villa for some 7 years and assume CGT is not applicable irrespective of value on Tapu is this correct.? Also as a rough guide what generally do selling agents charge as a commmsion on the sale?
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Andrew you are correct re the CGT in Turkey as it disappears after 4 or 5 years depending on when you bought. I don't know whether you are liable for CGT in the UK though with the reciprocal tax agreement etc.
Agents normally charge 6% i believe 3% paid by the seller and 3% by the buyer.
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Thanks for that reply. However I have a further question . I now have a purchaser for my property but it is being suggested to me that the purchasers solicitor can deal with everything and I do not really need my own solicitor. Of those members who have sold did you appoint your own solicitor or not. I would also welcome Scunners input in to this.
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I would never let a purchasers solicitors deal with my affairs
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I actually don't agree this time. As the seller, when the money hits my account I sign the property over. Let the buyer pay the solicitor - there is no exposure to risk if you follow the advice in the earlier part if this post :)
Sent from my iPhone using Tapatalk
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I would never let a purchasers solicitors deal with my affairs
Just out of interest Steve, when we bought Lemon, we had a solicitor. It them emerged that our solicitor who would have our best interests at heart, was also the builder's lawyer! Needless to say, when the build was completed nearly eight months late, we never got any money that was in the contract that they would pay us for late completion.....Eight years ago now so water under the bridge but interesting all the same....
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We never used the builders solicitor Lynne
This is more a case of do as I say rather than do as I do....
That said, I take Keith's argument that it is more important for the purchaser rather than the seller
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I recently sold a property in Turkey without a solicitor it was just a case of when the money is in my account I will sign.
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Correct Graham :)
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Thanks for all that info. Just a coup[le of points we made a will when we purchased, when we sell we want to get original back which I think disappeared to Anakara, any idea how we go about that? And finally how easy is it to get utility bills into the name of the new purchaser.Assume we must have a final reading of meters Thanks in advance
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Well heres an interesting point it seems that when, and if, you want to cancel a turkish will the total cost can be anything over TL1000
As you probably know in the Uk if you cannot find a will on death letters of administration are needed. If you have no further assets in Turkey [home bank account etc] why not just forget it and pay nothing or is that being a little too naive?
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Just a tad Andrew H. As it has been made and logged it will still stand and can't be forgotten :)