State subsidy for citizens purchasing homes via housing accounts

Published 22.08.2016 23:19
Updated 22.08.2016 23:47
State subsidy for citizens purchasing homes via housing accounts

By opening a housing account, people will be able to purchase houses with regular payments supported by the state. Based on some predetermined conditions, the state will back people's deposits to up to 20 percent of their savings

As of Friday, Aug. 26, those who wish to purchase houses in Turkey can receive a state subsidy by opening a housing account in deposit or participation banks. Citizens who open housing accounts and make three years of regular payments will be provided with a state subsidy of up to 20 percent of their savings at the time of acquisition. The said subsidy will not exceed TL 15,000 ($5,097). The payments will be made either monthly or once every three months. While the lower limit for the monthly payment was determined as TL 250, the upper limit is TL 2,500. Account owners will be able to make a one-time deposit of up to TL 30,000 in their accounts.

Those who want to buy houses and receive a state subsidy will be able to apply for the "housing account" system, instituted to support housing purchases for Turkish citizens living inside and outside the country.

Through the housing account system, the state will provide subsidies to citizens of up to 20 percent of their home purchasing savings, and the said subsidy will not exceed TL 15,000, according to Anadolu Agency (AA).

With the exception of those covered under the Article 28 of Turkish Citizenship Law item 5901, Turkish citizens who fulfill the conditions should open a Turkish Lira account in a deposit or participation bank established in Turkey, using their IDs to be included in the system.

Parents or guardians can open accounts for minors. A participant can only open one housing account. Joint accounts will not be assessed, as housing accounts cannot be transferred from bank to bank.

Citizens living abroad cannot open an account in the branch of a Turkish-based bank in the country where they reside. Since the implementation does not require residence in Turkey, Turkish citizens living abroad will be able to receive a state subsidy to buy a house in Turkey.

While opening the account, a one-time deposit of between TL 1,000 and TL 30,000 will be entered in the account. The account can only be opened in TL, and the system requires regular payments for three years after opening the account. The more money that is saved in the account, the more support will be provided by the state.

Account owners have to make regular payments, and they can only withdraw money twice in the first year. If any of these conditions are violated, the account will be removed from the housing account status.

Within the scope of this implementation, before the housing acquisition date, the system requires monthly payments of minimum TL 250 and maximum TL 2,500 for at least three years. The payments can also be made in a three-month term (with payments of minimum TL 750 and maximum TL 7,500).

The state will provide 15 percent support (up to TL 13,000 with state subsidy) of the amount paid for three to four years, 18 percent (up to TL 14,000 with state subsidy) of the amount paid for four to five years, and 20 percent (TL 15,000 with the state subsidy) of the amount paid for five years and longer.

Prospective participants can apply to their banks for the state subsidy within six months after the date of housing acquisition. Following confirmation of the required information and documents, the money will be withdrawn from the bank within two months, at the latest.

If more than three monthly payments are missed, or more than one payment for the three-month payments in one period (12 months following the account opening date), or withdrawing money from the housing accounts more than twice in one period, or the account balance falls under the minimum amount required, the account will no longer receive state subsidy.

Those buying a second property after April 7, 2015, apart from the one applied for the state subsidy, will not be provided with state subsidy. This applies also to timeshares and properties purchased from the participant's spouse and close relatives.

The housing accounts will be audited by the Board of Treasury Controllers within the scope of the information systems. The banks will be obliged to give information related to the housing accounts to the Board.

The amounts within the scope of the "Regulation on Housing Account and State Subsidy" will be annually increased, in accordance with the "reassessment rate" determined pursuant to the Tax Procedure Law. Banks will be obliged to use the term "housing account" in their advertisements, publicity or similar announcements related to the legislation.

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