Top 10 countries in which to apply for a real estate loan as a non-resident

Getting a credit or loan from a bank as a non-resident is not easy. In this article we show you the options you have if you want to invest in a property somewhere in the world to swell your portfolio and have a base in another country.

Although the typical Perpetual Tourist does not spend 183 days or more anywhere, it may be advisable to have a property somewhere in the world that does not make you a tax resident simply by virtue of owning a home. Having such a property allows you, of course, to more easily meet compliance requirements without having to pay tax.

It may come as a surprise, but getting a loan for a house or a flat abroad does not require magic or miracles. In this article we take you on a journey through ten countries where you have a good chance of getting financing to buy a property even if you are a non-resident. We show you which banks and financial institutions will open their doors to you, what interest rates you can expect, what requirements you will have to meet and what additional fees and costs you will have to assume (note: information on taxes, fees and loan conditions may change at any time).

Cyprus

Cyprus is a country we often mention in our blog. After recovering from a banking crisis in 2012, it is now recognised as one of the fastest growing countries in Europe. Cyprus has long since introduced its non-dom programme, which provides for full tax exemption on income from dividends, interest, and capital gains.

Thanks to freedom of movement, EU citizens do not need a visa. For all others, it is possible to obtain a Cypriot permanent residence permit by purchasing a property. Although there is no minimum investment amount required for purchase, an investment of at least EUR 300,000 in real estate may qualify for certain residence programmes. In addition, you must prove that you have a stable and regular source of income to support yourself and your dependants.

Legal requirements for the acquisition of real estate

1. Special authorisation from the Council of Ministers is required.
2. Documents required include title deeds, sales contracts, and a valid identity document.
3. Opening a Cypriot bank account is required.
4. A preliminary purchase contract and a deposit, usually between 10% and 30% of the purchase price, are required.

Taxes and fees on the purchase of property

• Stamp duty: free of charge up to EUR 5,000. Up to EUR 170,000, 0.15% is charged; above that amount a stamp duty of 0.20% is charged.
• VAT: standard at 19%, with exceptions for the first property in Cyprus, where it can be reduced to 5% under certain conditions (no more than 130 m² and up to EUR 350,000).
• Transfer tax: graduated at 3% up to a value of EUR 85,000, 5% up to EUR 170,000 and 8% above this amount.

Additional costs: If you decide to rent out your property, you should expect to have to pay taxes on rental income of between 20% and 35%, with income of up to EUR 19,500 per year being exempt from taxation. Property tax varies between 0.6% and 1.6%, depending on the value of the property. In addition, you will have to pay a municipal tax of between 0.1% and 0.2% of the market value of the property.

Real estate financing for non-residents in Cyprus

Cyprus also offers non-residents the opportunity to obtain mortgage loans, which usually require a deposit of between 40% and 50% of the purchase price. Interest rates vary between 4% and 7.5%.

The main Cypriot financial institutions providing loans to non-residents wishing to invest in property are the Bank of Cyprus, the Hellenic Bank and Eurobank of Cyprus.

Type	Cost	Payer
Stamp duty	0%; 0,15% or 0,20% of the value of the property	Buyer
VAT	19%, which can be reduced to 5%.	Buyer
Transmission costs	3%; 5% or 8% of the market value of the property	Buyer
Legal fees	Between 0.1% and 1%, depending on the complexity of the transaction and the lawyer’s fees.	Buyer

 

United Arab Emirates

This is another country that we constantly mention in our articles. The United Arab Emirates is one of the strategic locations that will remain relevant for quite some time. The country attracts worldwide attention because of its high level of security, excellent quality of life and fantastic tax advantages.

The UAE real estate market is open to non-residents and offers a wide range of opportunities without the need to be a permanent resident of the country. One restriction in this regard is that both residential and commercial properties must be purchased in specially designated areas, the so-called “freehold” areas. These areas are located in Dubai, Abu Dhabi, Sharjah, and Ras al-Khaimah, where foreign owners enjoy similar rights to local residents  —they can sell, rent or lease their property.

In terms of land ownership, foreigners are generally not allowed to own land in the UAE, and the only option is to lease it for up to 99 years (known in law as emphyteusis).

Residence permit through property purchase

For foreigners wishing to reside in the United Arab Emirates, the purchase of a property may be an effective way to obtain a residence visa. However, it is important to note that a visa is not automatically granted for the purchase of real estate, but that specific requirements must be met:

• The Golden Visa, which allows up to 10 years of residency, is available to you as long as you purchase one or more properties (or bank deposits) with a total value of at least AED 2 million (approximately USD 544,000), regardless of whether the property is under construction (off-plan) or completed, and whether it is purchased with or without a mortgage. In the past, a minimum down payment of AED 1 million or 50% of the value of the property was required for mortgaged properties or hire purchase.
• You are eligible for an Investor Residence Visa for 2 years if you invest at least AED 750,000 (approx. USD 204,000) in the property (or bank deposit).

Legal requirements for the purchase of property

Unlike other countries such as Cyprus, buyers in the UAE do not need specific authorisation from a government entity to purchase a property. However, they do require valid identification documents (such as a passport or identity card) proof of residency (in whatever country) and verification of property documents and records, which may vary from emirate to emirate. For legal entities, additional documents are required, such as company registration certificates and incorporation documents, all of which are translated and notarised in English and Arabic.

Real estate financing for non-residents in the UAE

Numerous banks in the UAE offer real estate financing, such as Emirates NBD, Abu Dhabi Commercial Bank (ADCB), First Abu Dhabi Bank (FAB), Dubai Islamic Bank (DIB) and HSBC. With interest rates ranging from 2-6% per annum, the UAE presents an attractive financing option compared to other destinations. The minimum down payment for residents is 20% of the purchase price, allowing up to 80% of the property value to be financed. For properties priced above AED 5 million, the minimum down payment increases to 30%. However, some banks may require a higher down payment and impose age limits on the loan offer. For non-residents, the maximum financing is usually 50%. Thanks to a recent change, this 50% is also considered when applying for the AED 2 million Golden Visa.

This information provides a general overview, and the specific criteria may vary from bank to bank.

Type	Cost	Payer
VAT	5% on the purchase of commercial real estate	Buyer
Transfer rate	4% of the value of the property in Dubai	Shared between seller and buyer
	2% of the value of the property in Abu Dhabi	Shared between seller and buyer
Registration fee	AED 2,000 for transactions below AED 500,000	Buyer
	AED 4,000 for transactions over AED 500,000	Buyer
Administrative fee for certificate of title	AED 250	Buyer

 

Panama

Another of our favourites par excellence: thanks to its strategic location as a preferential connection point between the Americas, Panama is consolidating its position as the main financial centre of Latin America.

However, Panama’s attractiveness to foreigners is not limited to the preferential access to Caribbean beaches it offers: Panama is one of the freest countries in the world and has an extremely favourable tax system, which attracts the interest of investors from all over the world.

Unlike other countries, such as the United Arab Emirates, in Panama there are no restrictions on the purchase of property by foreigners, but they enjoy the same rights as Panamanian citizens when buying and owning property —including “fee simple“, i.e. unrestricted ownership. However, a distinction must be made between property titles and so-called “possession rights”. The latter offer less legal security, although they do not carry property taxes. Some owners of small Caribbean islands have found that the land had other owners 10 years after their return. Ownership is based on actual use: if this is not the case, someone else can claim it for himself. It therefore needs to be developed immediately, or at least protected —although most land in Panama is already surveyed anyway.

All you need to acquire a property is the presentation of personal documents (such as a passport or identity card) forget about minimum investment amounts and specific visa requirements.

Residence permit through the purchase of property in Panama

Owning property in Panama does not automatically lead to residency, but it can facilitate the process through two main avenues:

1. Golden Visa: one of the main criteria to obtain it is to own a property in Panama worth at least USD 300,000. In the future, this value will increase to USD 500,000.
2. Friendly Nations Visa: available to citizens of more than 40 countries, including Argentina, Australia, Brazil, Canada, Chile, Cyprus, France, Germany, Mexico, Portugal, South Korea, Spain, South Korea, the United States, Uruguay, and others; where ownership of a property worth at least USD 200,000 is required. Other conditions are a minimum income, a deposit in a Panamanian bank, health insurance and a clean criminal record.

Taxes and costs of real estate transactions in Panama

These are the taxes and fees payable by the buyer:

• income taxes of between 15% and 25% of gross rental income; and
• an annual property tax with progressive rates of between 0% and 1%, depending on the value of the property —properties below USD 120,000 are exempt from taxation.

Real estate financing for non-residents in Panama

Panamanian banks typically offer financing of between 50% and 70% of the value of the property for non-residents, with a required down payment of between 30% and 50%. Interest rates on mortgage loans over 20 years range from 4% to 8% for residents —higher rates apply to non-residents.

Entities offering real estate loans to non-residents include Banco General, Citibank Panama and Scotiabank Panama.

By the way, if you are interested in banking, at Denationalize.me we offer an encyclopaedia of international banks that might interest you: You can purchase it here.

Type	Cost	Payer
Transfer tax	2% of the transaction value	Normally paid by the seller, although negotiation is possible.
Registration fee	Generally, 0.3% of the value of the property, approx.	Buyer
Notary fees	Generally, 1% of the value of the property.	Buyer
Legal fees	Approximately 2 % of the value of the property	Buyer

 

Mexico

Mexico is one of the most attractive destinations for perpetual travellers: the country not only captivates with its fascinating millenary culture, tequilas and burritos, or its idyllic beaches, but is also on its way to becoming a contemporary El Dorado, thanks to the significant tax advantages it offers and its attractive residency programme through real estate investment.

Unlike in some regions, such as the UAE, in Mexico foreigners do not need special permission from the government to purchase a property as long as it is not located in the so-called restricted zones, i.e. areas up to 100 km from the border or 50 km from the coast. In these zones, the purchase must be made through a trust contract with a Mexican bank that gives the buyer full control of the property, so that it is the bank that is formally registered as the owner in the property registry.

The purchase of property in Mexico is not linked to a minimum amount of investment, but certain financial criteria must be met to obtain residency through the purchase of property. Owning property in Mexico does not automatically lead to residency, but if you are interested in long-term residency, you can obtain a residency permit by investing in property. Temporary residency usually requires proof of regular income or a sufficient bank balance, or ownership of a property worth at least MXN 2,804,000 (about USD 164,000). There is also the possibility to obtain permanent residence through Denationalize.me without the need to prove liquidity.

To purchase a property in Mexico, it is necessary to have a state-appointed notary oversee the entire purchase process, from documentation to registration of the new title. In addition, registration with the Registro Federal de Contribuyentes (RFC) is required to comply with tax obligations. You will also be required to provide valid identification documents, a Mexican visa, a Mexican bank account, proof of financing and ownership documents —such as contracts and certificates, for example. All transactions must be conducted in Spanish and registered in the land registry.

In terms of real estate financing, the Mexican banking system is open to non-residents, although conditions may be less attractive than in other countries. A valid passport, proof of income, a Mexican bank account and sufficient creditworthiness are required to apply for a loan. With a minimum down payment of 30% and interest rates of between 9% and 13% for terms of around 20 years, loan conditions are well above those in many other countries. Some of the main providers of mortgages for non-residents are BBVA Bancomer, Santander Mexico and HSBC Mexico.

Type	Cost	Payer
Purchase tax	Between 2% and 5% of the value of the property, depending on the federal state	Buyer
Registration fee	Between 0.5% and 1% of the value of the property, depending on the federal state	Buyer
Notary fees	Between 0.5% and 2% of the value of the property	Buyer

 

Paraguay

This country is one of the most interesting for those who want to work on their Flag Theory. Paraguay offers a stable economy, low cost of living, tax exemption on foreign income, and the warm hospitality of its people towards foreigners. It is no wonder that Paraguay is increasingly seen as an attractive destination for real estate investors.

The open real estate market allows foreigners to buy, own, and sell both residential and commercial real estate. The only restriction concerns the purchase of land and property within a 50 km radius of the country’s borders.

Paraguay not only offers urban properties, but also fertile land ideal for agriculture and cattle raising at prices that are quite affordable compared to other countries. However, it should be noted that certain rural properties may be subject to use restrictions, as environmental regulations may limit development.

Does owning property in Paraguay entitle one to a residence permit?

Mere ownership of a property in Paraguay does not directly lead to residency. If you wish to stay in the country for a longer period, you must apply for a temporary residence permit. This permit is valid for a maximum of two years and can be converted into a permanent residence permit after this period. The process is very simple and inexpensive… and, of course, we can help you with that too!

In addition, the SUACE programme offers the opportunity to become a permanent resident in Paraguay to those who invest at least USD 70,000 and set up a business in the country. A mere real estate investment is not enough: a real business plan and the hiring of local employees are required.

Legal requirements for the acquisition of property by non-residents

There are no minimum investment amounts or residency requirements to purchase property in Paraguay, but there are some important requirements:

• The involvement of a notary public is compulsory.
• Required documents include a valid passport, identity card, marriage certificate, proof of residence and proof of financial means.
• If you buy through a representative, a power of attorney will be required.
• Documents related to the property, such as land registry extracts or title deeds, are also required.

Buyers are responsible for legal and registration fees, which vary according to the value of the property. As a landlord, you will have to pay annual property taxes, which vary between 0.1% and 1% of the assessed value. Rental income above USD 11,000 per year is subject to a 5% tax.

Although mortgages are available, the undeveloped mortgage market environment in Paraguay can lead to higher interest rates and difficulties in obtaining financing. Interest rates typically range from 9% to 12%, with a down payment of 20% to 30%.

Funding requires documentation similar to that of other countries, including a valid passport and proof of stable income.

Banks such as Banco Nacional de Fomento (BNF), Banco Continental or Banco Itaú offer mortgages to non-residents, and our team can help you open an account with either of the latter two.

If you would like to receive personalised advice, please contact us.

Type	Cost	Payer
Municipal property transaction tax	Between 0.20% and 0.30%	Seller
VAT	10% of the purchase price	Seller
Capital gains tax	10% of the profit	Seller
Registration fee	Approximately 0.74%	Buyer
Legal fees	Approximately 5%	Buyer

 

Spain

Spain, with its sunny summers and mild winters (depending on the area, of course), is a particularly attractive destination for all types of people; and one of our favourite options for establishing a legal residence.

While buying a property in Spain does not automatically grant you residency rights, it can open the door to the coveted Golden Visa programme. This programme allows non-EU nationals to obtain a temporary residence permit if they make significant investments in Spain, such as buying a property worth at least EUR 500,000. Note, however, that the Golden Visa is about to disappear in Spain.

The other option that would be available is the temporary residence permit, which is granted for 2 years, renewable. After 5 years of continuous temporary residence, you will be ready to apply for a permanent residence permit.

Legal requirements for non-residents

The purchase process in Spain is relatively straightforward: the only difference with most countries is the need for a NIE (Número de Identificación Fiscal). As a rule, you will also be asked for the usual documents:

• Passport or identity card.
• Power of attorney (if necessary).
• Property documents, such as title deeds, purchase contract and land registry.

In addition, you will have to pay a capital gains tax on the sale, which ranges from 19% to 24%. As a homeowner in Spain, you will also face many other taxes, such as the following:

• Property tax: an annual tax on the taxable value of the property, which varies between 0.4% and 1.1% of the cadastral value, depending on the Spanish region.
• Wealth tax: an annual tax on the net wealth of individuals, which amounts to between 0.2% and 3.5% of the cadastral value of the property, but which is only levied above different thresholds —depending on the region.
• Rental income tax: a flat-rate tax of 24% on gross income from rental property.

Real estate financing for non-residents in Spain

Yes, Spanish banks also offer some options in this respect, but with certain peculiarities.

These institutions grant loans of up to 70% of the value of the property —although this percentage may vary depending on the origin of the applicant. Most foreign applicants are usually offered approximately 60% of the value of the property.

Although non-residents can expect higher interest rates and shorter repayment terms, mortgage rates in Spain are certainly attractive compared to those in other countries, such as Mexico and Turkey.

Non-residents are normally limited to a fixed rate mortgage, with interest rates varying between 2% and 4% depending on the value of the property and the profile of the buyer.

Some of the Spanish banks offering these real estate loans to non-residents are Banco Santander, BBVA and CaixaBank.

If you want to learn more relevant information about Spain, take a look at the Beckham Law.

Type	Cost	Payer
Stamp duty	Between 0.5% and 1.5% of the sales price, depending on location	Buyer
VAT	10% of the value of the property	Buyer
Transfer tax	Between 6% and 10% of the sales price, depending on the Spanish region	Buyer
Registration fee	Between 0.5% and 1% of the value of the property	Buyer
Notary fees	0.1% to 0.5% of the purchase price	Buyer
Legal fees	1% to 2% of the purchase price, depending on the complexity of the transaction	Buyer

 

Brazil

Brazilian culture delights many foreigners with its charm and hospitality: Brazil offers a favourable exchange rate for stronger currencies, breathtaking scenery, pleasant climate, affordable cost of living, and warm atmosphere… and it allows non-residents to buy property in the country even if they live abroad or do not have permanent residence.

In Brazil, foreigners have almost the same rights as Brazilian citizens when buying urban or rural property. However, there are the following exceptions:

• it is not possible to own property within a radius of 150 km along national borders without authorisation from the National Congress; and
• there are restrictions on the size of rural properties that a foreigner can own, and these vary from region to region.

Buying a property in Brazil does not automatically lead to residency. However, if you want to stay in the country for a longer period, obtaining a Golden Visa may be a good option. To do this, you will need to invest at least 1 million reais (just over USD 200,000) in a property.

For properties in the North or Northeast regions, the minimum amount required can be reduced by up to 30%, to 700,000 reais (just over USD 140,000). You can invest this amount in a single property or in several properties.

It should be noted that the investor visa in Brazil is only valid for the purchase of urban residential and commercial properties, but not for rural properties.

The Golden Visa grants you a temporary residence permit for 2 to 4 years, as well as the option to apply for a permanent residence permit later.

IMPORTANT: Like the USA green card, permanent residency in Brazil entails unlimited tax liability in Brazil. Be aware of this before applying.

Legal requirements for the acquisition of property by non-residents

in Brazil

The process of buying a property in Brazil has some specific requirements, such as the following:

• The CPF (tax identification number for natural persons) or CNPJ (tax identification number for legal persons) is required. This number is essential for a wide range of transactions in the country, such as opening a bank account from which to access real estate loans. You can apply for it through the website of the Receita Federal (the Brazilian tax office) or at the Brazilian embassy or consulate in your home country. Our local team can also help you if you need it.
• All real estate transactions must be formalised in front of a notary, and you will be required to register them in the land registry to ensure legality.
• Documents required include a valid passport or equivalent for Brazilians and, in certain cases, a power of attorney.

For Brazil to accept these documents, they must be translated into Portuguese and notarised by a sworn translator registered in Brazil.

The seller must pay a capital gains tax of 15% on the net proceeds of the sale. As the owner, you will also have to pay an annual property tax of between 0.1% and 1% of the assessed value of the property. Rental income above USD 11,000 per year is subject to a 15% tax.

Real estate financing for non-residents in Brazil

Although buying a property is a straightforward process for foreigners, obtaining a property loan as a non-resident can be complicated. Most banks require resident status or at least a long-term residence permit.

Foreigners can finance up to 80% of the property price, but can expect interest rates of between 8% and 12% for terms of up to 20 years.

Major banks offer financing, such as Banco do Brasil, Caixa Econômica Federal and Itaú.

Type	Cost	Payer
Transfer tax	Between 2% and 3% of the value of the property	Buyer
Land tax	Between 0.5% and 2.5% of the value of the property, depending on the municipality	Owner
Local property tax	Between 0.6% and 2% of the value of the property, depending on the Brazilian state.	Owner
Registration fee	Between 0.5% and 1% of the value of the property	Buyer
Notary fees	Between 0.5% and 2% of the value of the property	Buyer

 

Argentina

Today, Argentina is still the great promise of the freedom championed by President-elect Javier Milei: investing in property in Argentina (also known as the “Paris of South America”) is becoming increasingly attractive to foreign investors, especially due to the devaluation of their currency. However, agricultural land can also be extremely lucrative: Christoph’s vineyard in the Uco Valley, just one hectare in size, has appreciated by 40% in three years because it offers unbeatable conditions for red wines.

Buying property in Argentina is easy for foreigners, as they enjoy the same civil rights as locals when buying urban property. Restrictions do apply to rural properties, such as a ban on buying land with important water sources or in certain areas of more than 1000 hectares.

In addition, foreigners cannot own more than 15% of the total rural land in Argentina, and are not allowed to buy in border security zones. Foreigners need special authorisation from the National Registry of Rural Land to buy land.

Unfortunately, there is no specific programme in Argentina that grants residency solely through real estate investment. If you want to obtain a residency visa, you will have to follow other paths —such as income or business investment.

What are the legal requirements for non-residents to buy property in Argentina?

• You will be required to have a tax identification number (CIT) for all tax matters.
• You will need to open an Argentine bank account for financial transactions.
• It is necessary to apply for a CUIL (Código Único de Identificación Laboral).
• It is mandatory to work with an Argentinean real estate agent.
• A notary public must attest to the transcription and guarantee the legality of tax payments and documentation.
• Notarial deeds must be signed, so that representation by power of attorney is possible.
• Valid proof of residence in Argentina is required.

For the transaction to be valid, all documents must be in Spanish and, if not in Spanish from the beginning, certified by a sworn translator registered in Argentina.

The seller bears the capital gains tax of 15% on the profit from the sale. As the owner, there is an additional property tax and local taxes (which vary depending on the type of property and the region) as well as an income tax on rental income of between 9% and 35%.

Real estate financing for non-residents in Argentina

Although possible, finding financing is not easy due to the country’s economic instability, currency fluctuations and strict foreign exchange controls. Mortgages account for a small proportion of financial transactions in the country, with high interest rates and banks cautious about lending to foreigners.

Financing of up to 80% of the value of new constructions and up to 75% for existing properties is available. The best known lenders are Banco Hipotecario, Banco Provincia and Banco de la Nación.

Argentina is also famous for birth tourism: now that Germany allows dual citizenship, it might be worthwhile for Germans to take a look at this opportunity.

Type	Cost	Payer
VAT	21% of the value of the property for new constructions or properties sold by a VAT paying taxpayer	Buyer
Stamp duty	Between 2% and 4% of the value of the property, depending on the location (shared between buyer and seller)	Buyer and seller
Estate agent’s fees	Between 2% and 4% of the sale price of the property	Buyer
Notary fees (escribano)	Between 1.25% and 2% of the value of the property	Buyer
Registration/stamp fees	Approximately 2 % of the value of the property	Buyer

 

Italy

Italy’s renowned cultural richness, exquisite cuisine, breathtaking scenery, warm climate, and affordable cost of living (compared to other European destinations) make it a real magnet for foreigners looking to invest in property.

In Italy, foreigners (whether resident or not) can purchase a wide range of properties: residential, commercial, and land. Italian property prices and transaction costs are generally more attractive than in neighbouring countries such as Spain or Portugal.

However, there are strict regulations for properties located in historic areas and restrictions for non-EU and non-EEA nationals. For EU/EEA nationals, the purchase process is similar to that of Italian nationals, as the country does not apply special restrictions. Foreigners from non-EU/EEA countries can buy property in Italy only if there is an international agreement allowing Italians to buy property in these other countries.

Unfortunately, owning a property alone does not guarantee the right of residence in Italy (for non-EU citizens). Unlike other countries, Italy does not offer visa programmes based solely on property investment.

What are the legal requirements for foreigners to buy a property in Italy?

• Pre-purchase authorisation and credit is required.
• You will need a tax identification number issued by the Italian tax authority (Agenzia delle Entrate) for all transactions and tax payments in Italy.
• It is essential to open an Italian bank account to pay the purchase price and all related fees and taxes.

Sellers must pay a 20% capital gains tax on the net profit from the sale of a property that has been held for less than five years.

As a landlord, you will have to pay municipal property tax of between 0.4% and 0.7% of the cadastral value, as well as taxes on rental income of between 23% and 43% of gross income.

Real estate financing for non-residents in Italy

Although Italian banks favour lending to residents or those wishing to become residents, it is possible to obtain a mortgage as a non-resident in certain circumstances, provided you can prove that you have a regular income.

Conditions are generally less favourable for non-residents, with a loan-to-value (LTV) ratio of 40% to 50%, compared to 80% for residents.

The best known banks that grant mortgages to foreigners are Intesa Sanpaolo, UniCredit and Monte dei Paschi di Siena. They all offer loan amounts starting at EUR 50,000 and interest rates between 3% and 5%.

Type	Cost	Payer
Registration fee	Between 3% and 7%, depending on the status of the property and the buyer	Buyer
VAT	4% for first homes, 10% for second homes or 22% for luxury homes.	Buyer
Land registration fee	1% of the value of the property	Buyer
Legal fees	Normally between 1% and 2% of the indicated value of the property.	Buyer
Notary fees	Between 1% and 2.5%, depending on the value of the property and the complexity of the transaction	Buyer

 

Turkey

Turkey not only seduces with its breathtaking nature and rich culture, but also offers unique opportunities for real estate investors —even though purchase prices have risen by far the most in recent years, mainly due to a “peaceful invasion” of Russian buyers.

Unlike other countries, Turkey allows foreigners to buy property without having to be citizens or permanent residents. However, there are some restrictions to be considered, such as a limitation on the amount of land foreigners can own and a ban on buying property in military zones.

The purchase of property alone does not guarantee the right of residence in Turkey, but a sufficient investment in real estate can help you not only to obtain a right of residence, but also Turkish citizenship through the Golden Visa programme, provided you invest a minimum amount of USD 400,000 —this amount has increased considerably in recent years, as it used to be USD 250,000.

What are the legal requirements for non-resident buyers?

• A compulsory earthquake insurance certificate (DASK) prior to the issuance of the Tapu (title deed).
• A foreign identification number, available from the Immigration Department —if you do not have a residence permit.
• A tax identification number, which is required for banking transactions and for opening a bank account in Turkey.
• For new buildings, you will need an Iskan certificate, which certifies compliance with building regulations.

In addition to the purchase price, the seller is subject to capital gains tax. The buyer, on the other hand, must pay annual real estate tax and income tax on rental income.

Real estate financing for non-residents in Turkey

Turkish banks usually finance between 50% and 70% of the house price, while EU citizens can get up to 80%. Interest rates on foreign currency mortgages vary between 5% and 10% per year, depending on the loan amount, the term, your financial situation, and the currency. Loans in stable currencies (such as the euro or the dollar) are usually cheaper than those in Turkish lira.

Repayment terms range from 10 to 15 years. Banks offering mortgages to foreigners include Akbank, HSBC and Garanti BBVA.

Simply owning a property does not automatically make you a tax resident.

Type	Interest	Payer
Transfer tax	4% of the value of the property (shared between buyer and seller)	Seller and buyer
VAT	Between 1% and 18% for residential properties, and 18% for commercial properties	Buyer
Stamp duty	Between 0.1% and 0.6% of the value of the contract	Buyer
Legal fees	Approximately 0.5% of the sale price, depending on the complexity of the transaction	Buyer
Notary fees	Varies according to the value of the property and the notary’s fees.	Seller and buyer

 

The keys to your property are the keys to your freedom.

One of the advantages is that owning property in any of the above countries does not automatically make you a tax resident, each country has its own criteria for determining this. Here you will find a detailed analysis of each criterion. In all the countries mentioned, the actual triggering of the tax liability is at least avoidable or uncritical, as they are mostly tax-exempt countries anyway: Panama, Paraguay and the UAE do not pose any tax problems, while Italy, Spain, Argentina and Brazil do not link real estate ownership to the centre of vital interests. Brazil, on the other hand, does require a permanent residence permit. In the case of Turkey and Mexico, having a home at your disposal can make you a tax resident, but you can escape tax liability just by owning a second property in another country.

If you have any questions about how we can help you, you can contact us. And, of course, we will be happy to guide you through our consultancy service.