If you are a resident of the UK buying property in Turkey, whether as an investment, holiday or retirement home, or to live permanently you will have to perform one or more currency transactions to complete your property purchase. The foreign exchange experts at HiFX can offer you specialist help and guidance on foreign exchange when buying property abroad.
Although not as obvious a choice as perhaps France or Spain, the number of UK citizens buying property in Turkey is on the rise, with many people choosing it as a place in which to retire, or to invest in with a view to making capital growth.
Foreign Exchange for Buying Property in Turkey
Whatever your reasons, buying a property in Turkey is a serious investment, and as such requires planning, especially if you buy a new ‘off plan’ property where you are required to make several 'stage payments' during its construction.
For illustration purposes, let us assume that you are UK resident buying a property in Turkey. The developer will require a deposit in Lira’s or Euros straight away, and then further "stage payments" during the construction of the property you are buying over the next 18 months, with a final payment upon completion. You will know the price of the investment in Liras or Euros and this should not increase unless you upgrade the specification of the property you are buying.
The actual cost in Sterling will be determined by the timing of your currency purchase. Naturally, if Sterling strengthens during construction, the cost to buy your property will decline but if the Turkish Lira strengthens then your costs will increase - i.e. a stronger Lira means your property in Turkey will be more expensive! (This will also apply to those purchasing a straight 're-sale' property where there is a gap between the offer being accepted and the completion of the sale).
If you have strong views about future exchange rates, you could wait to buy your currency at some stage between agreeing to buy the property in Turkey and the date that currency is required. This applies to either buying (and paying for) all of the currency (a spot trade) or fixing a rate (a forward contract). Either way you are exposing yourself to currency risk.
Remember: You would never agree to buy a property in your country of residence if you did not know how much it was going to cost you; if you agree to buy in Turkey without fixing the exchange rate at the outset, you are taking a gamble.
Don't panic! If you are buying a property in Turkey and you are still confused, we have a team of dedicated specialists who will happily explain the various strategies mentioned above, and keep an eye on the market for you. Please do not hesitate to call with any questions that you may have.
Since its foundation in 1998, HiFX has helped tens of thousands private individuals buy and transfer foreign currency, many of whom have bought Turkish property.
If you would like further information on how to buy foreign currency for property in Turkey or any other country, and how to obtain the best exchange rate, please call our Private Client Desk on 01753 859159 or alternatively visit the HiFX call me back page to have one of our representatives call you at your convenience.