Retiring in style: Turkey
Sunday October 1st 2006Alexander Garrett
Turkey is not a member of the EU ? nor will it be for some years at least ? and so there is no automatic right to live and work there, nor to free medical care. Its attractions as a retirement destination include a very low cost of living, inexpensive property, with the potential for good investment returns, and a very receptive atmosphere towards incomers.
Working in Turkey could be a problem ? there is a high unemployment rate and a number of occupations are effectively barred to foreigners ? but for those ready to completely retire, it is not difficult to obtain residency. Permits last for up to five years and you must show mainly that you can support yourself. After five years you can apply for citizenship.
The process of buying property in Turkey is now well established; there is a modest annual real estate tax of 0.1% to 0.2%, depending on location. New properties above 150 metres squared are subject to VAT at 18%. You should be wary about under-declaring the cost of property you buy in Turkey, as the government is cracking down on this.
Income tax is higher than in the UK for most people, since the top rate of 35% kicks in at 40,000 Turkish lire (£13,000). It would be advisable, therefore, to remain a UK taxpayer. Many people avoid taking residency by leaving the country every three months to obtain a new tourist visa. Capital gains tax is due if you sell within four years. There is a lot of very helpful information on the Turkish embassy?s website, www.turkisheconomy.org.uk/buying_property.html. It points out: ?Since your UK pensions are already taxed in the UK, it will not be taxed again in Turkey.?
As far as health services are concerned, there is no reciprocal healthcare agreement between the UK and Turkey, so UK citizens will need private health insurance.
The most popular areas for Brits to buy in Turkey are all along the western Aegean and southern Mediterranean coasts, with hotspots including places such as Bodrum, Fethiye, Kusadasi, Alanya and Kalkan.
There is a huge amount of new property being built for the overseas market in Turkey, and prices are still relatively low. Studio apartments cost as little as £20,000; for £100,000 you can buy a small town house or villa in Bodrum; for £200,000 or more you could expect to buy a larger villa with a pool.
It is generally claimed that prices are rising at 15% to 20% a year, and even if this is hard to substantiate, with EU membership on the horizon, Turkey is likely to prove a good investment in the years to come. Further information on living in Turkey is available at www.mymerhaba.com.
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