I often write and talk about the advantages of buying a property in Turkey in terms of comfort and convenience. However, I rarely focus on the advantages of local financial monitoring, and this is also a very important, if not the main advantage of Turkish jurisdiction for immigrants from post-Soviet countries.

There, as in the EU, by the way, you will no longer be able to freely buy anything expensive, such as an apartment, without “communicating” with the local tax authorities, who will require you to indicate the source of your capital. For a variety of reasons, most often formal, your payment can be blocked – sometimes even along with a bank account. Today I will explain with an applied example why this does not happen in Turkey and how local authorities have simplified financial monitoring for foreigners.

How Tough Financial Monitoring Forces Investors to Flee Post-Soviet Countries to Turkey

It just so happened in the post-Soviet space that people do not want or cannot prove the source of their funds for government agencies. All this is included in the concept of “shadow economy”, which is traditionally very strong in the CIS countries. I note that this is not about scammers or swindlers, but about ordinary people who work either without registration at all, or do not fully declare profits in order to minimize very high taxes and fees.

These can be freelancers making money online; small entrepreneurs who receive income from the resale of clothes or shoes from personal accounts in social networks; miners or cryptocurrency traders, etc. Yes, even a small farmer can sell his crop without official registration at the nearest market.

There are a lot of examples in almost any field, especially when it comes to cryptocurrencies, which are alien to post-Soviet officials, and therefore are perceived as hostile, more often banned than legalized. These are ordinary people who work honestly, but optimize their taxes – because the very system of post-Soviet countries allows this. Everyone knows this and no one is surprised. Therefore, this business is often called ” gray” – it is not prohibited, but it is not officially allowed . The authorities simply turn a blind eye to this.

But this happens only until a person wants to buy something big, like a car or real estate. And that’s when the tax authorities and financial monitoring remember you and demand to prove the source of your funds in order to tax all this. But if you’ve been raising funds for years, how can you show the origin of the money at once? Especially if you are a crypto enthusiast and your capital was the result of another explosive growth of bitcoin – you didn’t even do anything, the funds on your e-wallet “grew” themselves!

And that’s when our compatriots begin to think about how to “land” this capital in another country, but without risk and tax pressure. And this is where Turkey comes to the rescue, which has simplified financial monitoring to a minimum and, moreover, has specially (!) at the level of the National Bank introduced ways to eliminate its “financial footprint” of the client for bodies from other countries.

This approach gives a stunning result – in this half of the year alone, foreigners bought 44% more real estate in Turkey than in the same period in 2020. In absolute terms, these are 20,488 properties, more than 14,000 of which were purchased in Istanbul and Antalya. Compared to 2013, the increase in sales to foreigners increased 4 times – from 5 thousand. up to the current 20 thousand transactions in 6 months. A significant share in these sales belongs to immigrants from the CIS – some Russians for 6 months. In 2021, 1759 properties were bought.

Not without pride, I note that the real estate agency Expert Property also has a considerable contribution to this general and very positive statistics. And one of the reasons for such an explosive growth of interest in Turkey is a very liberal financial monitoring, which I will talk about later.

How does a secure anonymous transaction work in Turkey?

Let’s imagine that you have chosen housing in Turkey and are ready to pay for it. Then the financial quest begins – how to pay the funds so that they reach the seller without hindrance, and do not become a headache for you. If you use traditional bank transfers, then the origin of your capital will require you to prove first the bank itself, and then, possibly, the tax office.

Plus, bank transfers are long, fees are high, and the chances that money will be “lost” along the way are quite high – especially if you transfer funds from a European bank, where the attitude towards immigrants from post-Soviet countries is often dismissive.

The National Bank of Turkey analyzed this whole situation and offered a way out – payments in cryptocurrency through a third party. Such a payment occurs quickly (usually in a couple of minutes), commissions are low, and the entire path of funds can be easily traced on your own mobile phone. All details of the transaction are prescribed in a smart contract, the terms of which cannot be changed or violated by any of the parties.

But the main thing is that all this is absolutely reliable and legal – still, with the “blessing” of the National Bank of Turkey itself! Moreover, anonymously – no one regulates cryptocurrencies, all transactions are made between the seller and the buyer, and instead of names and addresses, there are just numbers of digital wallets.

In addition, the funds are not transferred directly to the seller, but first to a real estate agency (for example, ours), which translates them into Turkish lira and, thus, officially becomes the payer. It is the agency that will appear in the Turkish tax office and in all registers, not the buyer – it will pay all taxes and fees, leaving no financial trace of the buyer. Complete anonymity and security – the only register where the buyer will indicate is the real estate register in which he will be listed as the new happy owner of housing in Turkey!

A reliable smart contract will make it so that both parties, in principle, will not be able to deceive each other, because this is a self-executing contract. The seller will not see the money, the buyer will not receive a certificate of ownership, and the agency will not receive its commission until everyone fulfills their obligations. Since each party is interested in the success of the transaction and cannot get out of it ahead of schedule, such a purchase and sale of real estate in Turkey takes place as quickly and smoothly as possible.

The main advantages of the Turkish system

The key point in this whole system is the ability to pay for the transaction and “light up” in the tax authorities instead of you to a third party. That is, to our agency, which assumes all risks and full legal responsibility to the client. For the buyer, this system is very simple and, I would say, “light” – lightweight.

We introduced this innovative approach in February of this year. Not from a good life – we were forced by quarantine and huge difficulties for conducting traditional transactions. Before quarantine, I was afraid of cryptocurrencies, smart contracts, and digital transactions because I didn’t know them well. I have always been conservative, because I believe that the best option is the one that has been repeatedly tested by practice. I am cautious about everything new.

We introduced digital transactions rather as an experiment and a temporary measure for the period of strict quarantine. However, this turned all our approaches to the sale of real estate upside down… And not only ours – we already have dozens of transactions using cryptocurrencies from offices throughout Turkey, which indicates customer support for innovations. Working with smart contracts turned out to be surprisingly simple and effective, at the same time reliable and, which is also important, economical (no extra commissions).

I am often asked if cryptocurrencies are legalized in Turkey, then why does the agency convert them into Turkish lira? The nuance is that cryptocurrency rates are unstable, they are constantly changing. Therefore, the state bodies of the country made the right decision, in my opinion, that in order to carry out any transaction, cryptocurrencies must be converted into national currency in order to fix the amount at the time of purchase of housing.

Thus, the buyer will protect himself, including legally – in case of any disputes after the transaction, he will be able to demand a refund of the amount in real, not virtual money. You transfer digital anonymous assets that cannot be touched or prove your ownership of them into strong and reliable assets – real estate and real money, which in which case you are guaranteed to be returned.

Just an example – those who bought housing for cryptocurrency in the spring, when the cost of bitcoin was 60 thousand dollars, fixed this amount in real money. Now bitcoin has collapsed by half – up to 30 thousand dollars. apiece. If, in the event of a dispute, the buyer was returned the value of the transaction in bitcoin, then in real money this amount was already half as low as in the spring.

Do you understand now why I always advocate the ” landing” of virtual assets, for their fixation in real money and assets? Because it protects the interests of the buyer first of all. During the transaction, it is very important to use the advantages of both the traditional banking system and cryptocurrencies, which only Turkey and the Turkish National Bank can fully do. This is not possible in any post-Soviet or European jurisdiction.

It is important that we do not work with intermediaries. Our agency carries out all these procedures independently. And completely without commissions for financial services – this is a bonus for our customers. All additional services, as well as after-sales support for several years after the transaction, we provide completely free of charge. We always work with love for the buyer, and therefore with minimal costs for him.

Now the format of “hybrid transactions” is also popular, when not the entire amount is paid through cryptocurrency, but only part – 50% or 70%. It happens that the deposit is transferred in accordance with all international rules through traditional bank payments, and the rest of the amount using cryptocurrencies and smart contracts.

Conclusion: Turkish financial fairy tale is not a myth

Financial monitoring in different countries has different degrees of meticulousness and rigidity, but for me one simple fact is obvious – in neighboring countries, the Turkish system is the simplest and most friendly to the client. It is built in such a way as to reduce both the tax and bureaucratic burden on the foreign buyer or shift this responsibility to someone else – to a real estate agency. It’s fast, easy, convenient and reliable.

In conclusion, I will add that after the transaction in the format described above, all that remains is to register the property for yourself. And this can also be done remotely using an asset management agreement, which I have already talked about.

If you are an investor and do not plan to visit Turkey at all, then the whole process of the transaction and even making a profit from the lease can be carried out online – if your interests in Turkey are represented by the international real estate agency Expert Property, then your possibilities become almost limitless.

Your Tatiana Güneş and the team of professionals at Expert Property