1-Site Management And Contrubution Fee Issues
I would like to briefly cast a light on Monthly Membership (contribution)
Fee and Site Management issues by providing my legal assessment in
accordance with the relevant Codes.
During the course of establishment of the Temporary Construction Servitudes A Site Management Plan will be drafted and presented to the Title Deed Office by the Project Owner (real-estate owner). Rules on how to govern the site will be determined in this plan. This plan must be strictly complied with the present Construction Servitude Code because of the article stipulated in the Constitution which is All regulations and rules has to be in accordance with the Law. Pursuant to Construction Servitude Code and Site Management Plan Committee of Real-Estate Owners would be formed by the owners. This Committee would appoint a Manager or Management Board or Managers and Assistants depending on how large the site may be. The Manager may be Interim. Temporarily managing the site by the developer until properties are delivered to their owners is a common place in Turkey.
b- Monthly site contribution fee (Sharing Common Expenses)
As manifested, a site will be composed of more than one property therefore should be living in harmony. In this respect, there are common areas and services to be benefited by the site residences such as illumination system, common swimming pool, maintenance of the parks, keeping the site tidy and clean, security and routine management and personnel expenses. Therefore every single property owner should proportionately contribute to these common expenses. This is called as Monthly Site Contribution Fee (Sharing common expenses, in other words, maintenance expenses of the site). As being consistent with the Code, every property owner, who obtained their title deeds registered under their names, is liable for contributing to these expenses whether they benefit common areas and services or not. On the other hand, the owners who were delivered the key to the property and began to utilize their property or placed their belongings in the property before obtaining the title deed are also liable for paying this monthly fee as of actual delivery date (as of the day they started to use the property).
c-Conclusion and Assessment:
The reasons that steer me to draft this article is to provide some discernment over the management and common expenses issues to the interested persons who may not be familiar with and may be seeking some advice on this topic. In accordance with my assessment above, if you either have your title deed registered under your name or you already started to utilize your property or placed your belongings in before obtaining the title deed, you are liable to contribute to common expenses as of the registration date of the title deed under your name or as of the actual delivery date of your property. In both cases, property owners should proportionately**contribute to these common expenses or should pay in accordance with the budget which was determined beforehand if applicable..
** (Total amount of the common expenses) x (Total number of the
properties you have)
(Total number of the real-estates)
Uslu Law Office
Attorney at Law
2-Investing in Marina Business and Yacht Sector in Turkey:
Marina Business started in the 70s in Turkey. The first one was constructed in 1976 and operated by Setur, a famous enterprise which manages many of them today. It has been followed by Marinas in Bodrum and Kuşadası. Management of Turkish Marinas has been carried out by the Government Institutes until the Private Sector came into play. Turkish Government carried on its sovereignty in this sector for a long period of time. However, after implementation of Tourism Promotion Code No.2634 in 1983, the market became wide open to investors from the Private Sector and consequently growth was enormous. Competition between the investors brought a great deal of development and briskness. Today, Ataköy Marina of İstanbul is the holder of five Golden Anchor awards that only 27 among the 19 thousands Marinas world-wide have been merited with. In order have a better understanding in the development of this market, one should check the numbers; Today, this is a market of 2.5 Billion Dollars in Turkey. According to the records of the Ministry of Tourism, total bed capacity of the yachts with a Business Permit is Five Thousand. Again, bed capacity of the Turkish Yachts that do not have this permit is around Thirty Thousand.
How much would it cost to invest?
Especially over the past five years, many reputable firms have become very interested in this promising market. Therefore, to have their Piece of the Pie, they are active players now. As a result, the average investment cost is around Twenty Million Dollars today.
How and Why has the Marina Business become very piquant to investors?
Every year, approximately 650 to 700 thousand yachts cruise to the Mediterranean. Despite the unique beauty of Turkish Shores, Turkey has the capacity of serving only seven out of each one thousand of the yachts. On the other hand, although Western Mediterranean countries, such as France and Spain, have a great capacity to serve yachts, theyve too become overly saturated. Therefore Turkey and especially Bodrum has become the Center of Gravity for the interest of the yachters world-wide. Therefore, it is only obvious for the reasons explained above, that has made the Yacht Business in Turkey a very promising sector for the investors that hope for great benefits from their investments.
What are the Law and Requirements to invest in Marina Business in Turkey?
This area is governed by the Promotion of Tourism Code No.2634 which came into force in 1983. In order to execute the provisions of the given code, Yacht Tourism Regulation No.18125was then drafted. It came into force after its publication in Official Gazette on 4th of August, 1983.
According to this regulation, Real and/or Legal Persons may enter into the Marina Business upon obtaining Tourism Investment Certificate from the Ministry of Tourism.
Again according to this regulation, Any Marina that has been built by the Government or the Private Sector may be operated by Real and/or Legal Persons who is the holder of the Tourism Investment Certificate.
Many issues, such as the physical, infrastructure and superstructure requirements, categorization and management of the Marinas; required items to work and their capacity have been set with this Regulation. In the third section, the term of the Marina Managership and its scope have been specified.
Can Foreign Yacht Enterprises that have been established in other Countries operate a Marina within Turkey?
Yes. They are allowed to operate Marinas in Turkey for a period of up to three years with the permission of the Ministry of Tourism. The Ministry may extend the permit if necessary.
Foreign Companies will offer their services and be represented through a Travel Agency with the Marina Management Permit Class A or temporary A or a Yacht Enterprise of the Turkish Origin.
In this case, the Representing Travel Agency or Yacht Enterprise will be held responsible to comply with all conditions and provisions that are envisaged with the relevant Code and Regulation.
*Important! According to Turkish Commercial Code, any company that has been established in Turkey will be deemed as a Turkish Company regardless the nationality of the founders.
What is the Law for Foreign Yachts that cruise within Turkish Territory?
Foreign Citizens who entered Turkey with their yachts are allowed to dock at a Certified Marina or a Yacht Hauling Facility for wintering and/or maintenance and repair purposes for a period of up to two years and may leave Turkey by any other transportation. In this case the necessary application will be carried out on the Yachters Passport by the Local Customs Office upon presentation of the document that has been furnished by the Director of the Marina or the Yacht Hauling Facility. These Yachts may stay in Turkey for a period of up to five years without any permission required if they would be used by their owners once at least every two years. However, the Ministry has the authority of extending this period at the end of five years.
Can a Foreign Yacht carry on Commercial Activities between the Turkish Harbors?
No. Cabotage Code only allows Turkish Yachts to operate in commercial activities such as passenger and cargo transportation. However, accepting guests that of any nationality onto the Foreign Yachts for tours, Sportive Activities and Touristic purposes is allowed.
Uslu Law Office
Attorney at Law
3- Resident and Work Permit
In order to obtain a Resident Permit, first and foremost, applying before the relevant 'County Governor' with a petition is required.
The reason for the request for a Resident Permit and the address (address required for the Police Investigation which will take place later on) should be explicitly stated in the petition. Presentation of the Lease is not required. Police officers state that most often there has been no connection between the applicant and the address provided due to the fact that during this phase, the applicant may have been went back to his/her country. According to police officers, in this case, that doesnt mean that the application for the Resident Permit will be rejected. However on the other hand, Assistant of the 'County Governor' made it very clear that the application shall be refused under these circumstances.
After getting the petition issued by the County Governor, it should be personally delivered to the 'Foreign Affairs Department of the relevant Police Station' by the applicant. After the petition has been issued by the Police, it should be sent to the relevant Alien Office.
The documents that should be forwarded to the Police along with the petition are as follows:
-8 passport size photos of the applicant
-Passport photocopy (particularly copies of the photo attached page and the page which Entry Stamp issued by the Turkish Customs
-Documents that declare income (strictly speaking; exchange receipts, credit cards copies, bank accounts in Turkey if applicable).
The role of the 'Police Station' is to act as the transmitter, sending the documents accentuated above to the Alien Office. The next step in the process would be that of the Police Officers informing the applicant with the phone number of the Alien Office in order to get an Appointment Date. If the application gets approved after the interview,the 'Resident Permit' can be obtained one week later, but this period may be extended anywhere from one week to ninety days depending on the heavy work schedule.
As expressed by the Assistant of the County Governor', after having the documents issued by the 'Police', it may speed the process if the applicant personally delivers the relevant paperwork to the 'Allien Office'.
It should be applied for at least one week before the expiration date of their visas. EU citizens are able to get a Resident Permitof up to the five years.
Expenses Scheme: (All are subject to change)
*Resident Permit fee for one year
*Single Entry Visa Fee
The above mentioned fees are required to be paid at the Tax Office in advance after which the foreigner may apply at any office by presenting the Residenct Permitthat was obtained.
The foreigner should apply personally as doing so through a Power of Attorney is not an option.
Obtaining the Work Permit may take a while and would be more costly than the application for the Resident permit as it needs to be applied with the Ministry of Labor and Social Security in Ankara, and requires having an Employer submitting a Work Request for the foreigner.
Application starts with a petition. Furnishing the necessary supporting documents that are pertinent to and differ depending on the reason of the application is required. Also a resume must be forwarded to the Ministry of Labor and Social Security along with the petition and supporting documents.
Uslu Law Office
Attorney at Law
4-Taxation of Profits Gained Through Real-Estate Sales in Accordance with Turkish Law:
1-Taxation of the profits earned by Real Persons:
Profits earned through sales of Real-Estate are subject to taxation as Appreciation Profits unless carried out by commercial entities for commercial purposes or constant sales by real persons.
In order to tax the profits gained through Real-Estate sales as Appreciation Profits;
- Real-Properties owned before January 1st, 2007 must be sold within four years of the registeration of the property in question under the sellers name whereas it is five years for the Real-Properties owned after January 1st, 2007.
- Profit gained must be over the Set Limit determined in the year that sale was carried out.
Seller is not required to file any tax form therefore no tax will be incurred arising from the sale of the property if the real-property was acquired before January 1st, 2007 is sold after 4 years of the date of acquisition and the ones acquired after this date is sold after 5 years of the date of acqusition on the grounds that the profit no matter the amount will not be deemed as Appreciation Profits.
*The method in which to calculate the 4 and 5 year time period mentioned above:
- In case of buying a real-property, acqusition date is the registration date at the Title Deed Office,
- Acqusition date for Real-Properties that were allocated to Cooperative Enterprise is the date of allocation (e.g. date of drawing of lots),
- For the Real-Properties under construction, the periods will be calculated from the date that the Certificate of Occupancy was obtained,
- For the Real-Properties bought in exchange for the land, these periods will be calculated from the date thatCertificate of Occupancy was obtained after completion of the construction,
- Acqusition date for Real-Properties owned through Poinding or Partition is the completion date of the official transaction which is prior to the registration at the Title Deed Office,
- For the Real-Properties that are physically delivered to the buyer for usage before the title deed transfer in accordance with clauses of a signed Real-Property Sale Promise Contract, these periods will be calculated from the date of acqusition of the Right of Disposal by the buyer.
*The method in which to calculate Appreciation Profit:
When income tax is the issue at hand, as known by and large, net income would be the subject of taxation. When it comes to selling of a Real-Property, subject of taxation will be calculated by excluding the cost of the property in question and the cost of relevant rights to it, any expenditure, taxes and duties met by seller from any profit obtained as assests or any monetary profit due to sale.
In order to determine the acquisition cost when selling and transfering the Real-Properties, cost in question will be raised in proportion with the PPE (Product Price Index) which is determined by SSI (State Statistic Institute) excluding the month in which sale was carried out. Nevermore, in order to conduct this index, rate of increase should be at least 10% or over.
Therefore in order to determine the sale profit :
-Purchase price will be raised in proportion with the PPE for the period of time that Real-Property in question has been in possession,
- Raised (indexed) cost and expenses have been made for sale will be excluded from the sale price,
- Set Limit will be deducted from the profit that was found after calculation as described above (Set Limit for 2008 is YTL 6.800),
- The amount found after deduction of the Set Limit as described above will constitute the subject of Income Tax and be declared with an Income Tax Declaration Form,
- Income Tax will be calculated in accordance with Income Tax Rate Card.
INCOME TAX RATE CARD
(Income Tax Code (ITC) Article.103)
2008 (ITC article.103) INCOME TAX RATE CARD
(Including Wage Incomes)
Up to YTL 7.800: 15%,
Up to YTL 19.800: for the initial YTL 7.800, it is YTL 1.170; and 20% of the remaining
Up to YTL 44.700: for the initial YTL 19.800, it is YTL 3.570; and 27% of the remaining
Over YTL 44.700: for the initial YTL 44.700, it is YTL 10.293; and 35% of the remaining
2-Taxation of the profits earned by Companies:
If the Real-Property sale is carried out as a commercial organization and in a constatnt manner, profits gained through these activities will be taxed as Business Income.
On the other hand, if the conditions below are met all together, companies are only liable to pay 5% of the profit arising from the Real-Property sales whicih is called as Corporation Income Tax.
These conditions are;
- Real-Property must be in the Companies asset at least for two years,
- Company in question must be a Corporation Income Tax Payer,
- Company must not be engaged in the Real-Estate business,
- Real-Property must be transfered and delivered through sale,
- Profit gained through this transaction must be kept in a seperate fund account for five years
or added into company capital.
However, there is an exception to this on some conditions for companies that are involved in Real-Estate business regarding the sale of Real-Properties for non-commercial purposes (e.g. selling Companys head quarters edifice).
Uslu Law Office
Attorney at Law
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