Advantages Of Real Estate Investment Funds


1. Tax Benefits 1.1. Corporate tax 5520 PP. Under the corporate tax code, gains made by real estate mutual funds are exempt from corporate tax. Keza, 2009/14594 P. In accordance with the decision of the Council of ministers, the withholding tax rate to be applied to earnings received by real estate investment funds has been set at 0%. Therefore, as long as the Earned Income remains in the fund, there is no tax burden on them.

1.2. Stamp duty 488 PP. In accordance with the stamp duty law, contracts for the purchase, sale and sale of real estate are exempt from stamp duty, provided that they are exclusively related to the real estate portfolio of the real estate investment fund. Since stamp duty is applied as a certain percentage over the transaction price, there may be a significant amount of stamp duty accrual according to the price of the relevant Transaction. Transactions of real estate investment funds related to the real estate portfolio are excluded from stamp duty, and transaction costs are significantly reduced.

1.3. Gains in value increase gains arising from the return or sale of participation shares to the fund are subject to withholding tax. If the earning person is a natural person, this withholding rate is 10%; if a trading company established in accordance with the 8843 Form 2021 laws of the Republic of Turkey or a legal entity with their equivalent in foreign countries, it is 0%.

1.4. Dividend withholding there is no consensus on whether dividends distributed by The Real Estate Investment Fund are subject to withholding. The reason for this is that it was not possible for real estate investment funds to distribute dividends during the periods when the legal regulations and secondary legislation on the application of withholding tax on dividends were prepared. In Article 27 of the communiqué dated 01.07.2014 numbered III-52.3 of the CMB, it is regulated that real estate investment trusts can distribute dividends. Although 193 PP. Although dividends paid on participation documents in accordance with Article 75 of the Income Tax Law (“GVK”) are considered to be the will of the capital of securities, in practice, the phrase dividends here refers to the profit arising from the return of the participation share of the fund to the fund or the sale to a third party. Therefore, uncertainty prevails in terms of our tax law as to how the approach will be regarding dividends distributed by the real estate investment fund. Some tax practitioners argue that withholding should be applied in this case, while others argue that withholding should not be applied. A draft information note prepared by the revenue administration three years ago stated that periodic earnings obtained as long as participation shares are held will be subject to withholding in accordance with the provision of temporary Article 67 of the GVK. Although the final version of this draft guidance has not been published, it is understood from this draft that the Revenue Administration considers the taxation regime for dividends to be identical to the taxation of earnings arising from the return of participation shares to the fund or the sale of them to third parties. As a matter of fact, in our opinion, there is no legal regulation that requires a distinction between the two earnings. In this context, just as withholding tax on such capital gains by the fund to the participants in a real person to be paid the dividend of 10%; the Republic of Turkey is a trading company established under the laws of foreign countries or their counterpart in the legal person dividends to be paid to participants on a 0% withholding tax should be applied it is our opinion that (Article 67 of the income tax law).

2. Prohibition of foreclosure on real estate within the Fund 1065 Form 2021.In accordance with the last sentence of Paragraph 5(2) of communiqué 52-3, the assets of real estate investment funds may not be foreclosed, injunctive relief may not be placed on it and may not be included in the bankruptcy table, including for the purpose of collecting public receivables. In this respect, the assets of the fund are separate from the assets of the founder and manager of the portfolio. As a matter of fact, the portfolio manager is obliged to look after the interests of each fund he manages separately. The understanding of the legislation in this direction ensures that the amounts brought by Real Estate Investment Fund participants as investments are protected. In addition, if a person owns a property together in accordance with the principles of common ownership, rather than one, there is a possibility that a foreclosure will be applied to the jointly owned property due to the debt of one of these common properties. But since the investment is made through the fund, so the owner of the real estate appears in the relevant Land Registry as a real estate investment fund, such a risk of foreclosure will also not be raised.

3. CMB audit the establishment and management of real estate investment funds is an activity that can be carried out with the permission granted by The Capital Market Board. As long as the activity continues, portfolio managers are subject to the supervision of the Capital Markets Board. For example; III.Article 25 of Communique 52-3 states that funds will periodically report to both the SEC and its investors.

4. Ease of transaction for foreign investors people who are not citizens of the Republic of Turkey and want to make investments by purchasing real estate in Turkey may face legal obstacles from time to time. For example; 2644 PP. According to the land registry law, not all foreigners; only citizens of countries designated by the presidency can obtain real estate in Turkey. In addition, citizens of some countries included in this list may also need to obtain a residence permit in order to obtain real estate. In addition, since real estate transfer operations can only be carried out in the presence of the land registry office, the only option for foreign investors who want to make this investment without coming to Turkey is to make this transaction through a proxy, and this can lead to question marks before foreign investors. Investing through a real estate investment fund eliminates these concerns and provides ease of trading for foreign investors.

5. Convenience in heritage management as mentioned above, the maliki of real estate in the portfolio of the real estate investment fund is registered as the real estate investment fund itself in the relevant land registry offices. In this case, instead of the processes of revenge and allocation of real estate in the event of death, the method of transferring accession documents provides an advantage as a much more practical method.


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