Fractional & Shared Ownership in Turkey

Fractional ownership has been an accepted way of buying property in the USA & Canada for more than 10 years, although only introduced to Europe very recently. As well as being used as a means to buy property, it is also used to purchase planes, yachts, cars and even jewellery.

In Turkey, in common with the rest of Europe, the concept of buying holiday/investment property fractionally has been virtually untried. Turkey will quickly become one of the pioneers of fractional ownership in the Mediterranean as a number of long established and highly reputable developers are due to make their outstanding properties available on a fractional basis.

Fractional Ownership is literally shared ownership of the title to a property; not to be confused with “Time Share” which merely gives you the right to occupy a property for certain set weeks. It is an ideal format for buying lifestyle and investment property.

Many models allow for properties to be sold in quarter fractions, meaning that four separate purchasers buy title to ¼ of the property. Whilst many people dream of owning their own luxury holiday home or investing in a second property, they often find the initial financial outlay and running costs difficult to justify. Fractional ownership can meet the needs of many more potential buyers and offers a property which is:

• Shared Ownership
• Freehold Ownership – Bricks and Mortar
• In Perpetuity – Forever (unless you decide to sell it)

Purchasing a fraction in Turkey is a very straightforward matter. Title to any property in Turkey is recognised through the issue of the TAPU, the Turkish equivalent of a Land Registry Certificate. A typical fractional scheme would split the TAPU into four separate TAPU’s, one for each fractional owner. This allows the owner of a fraction to sell their fraction at any time without affecting the other fractional owners of that property.

Ownership of a quarter fraction of a property entitles owners to 12 weeks occupancy of a property on a rotational calendar basis.

Fractional Ownership is the alternative route to owning Freehold Property and we again must emphasise it is not to be confused with Time-Share.

Purchasers of fractional property are investing in the bricks and mortar and enjoy the same ownership rights as any individual purchasing freehold property. It offers purchasers:

• Deeded property with the same rights as any other real estate purchase
• A property which is fully furnished to a very high standard
• 12 weeks a year sole occupancy of the property, allocated to each owner on a rotational basis.
• The ability to share all maintenance and running costs of the property
• The benefit of rental income for any unused weeks.

This form of ownership also benefits those who would like to test the idea of holiday home ownership before making a larger investment and is a fantastic way of reducing investors’ financial exposure, giving them the opportunity of spreading their portfolio.

Fractional ownership is freehold ownership and NOT Time-Share. Time-Share gives guaranteed occupancy rights for a defined period each year, which is in common with a shared fractional ownership. However it is:

• Not ‘Freehold’ ownership
• Unlikely to achieve any capital appreciation
• A cost rather than an asset
• Carrying a lot of negative media coverage
• Often involving high maintenance charges for limited access

Fractional ownership gives you actual freehold ownership of a property as opposed to just the right of usage. Buying a fraction meets the requirements of many more potential buyers including those who:

• Would love to buy their holiday home outright, but lack the funds.
• Have the funds but recognise it makes little economic sense to pay for and maintain a property when only used for a limited period each year. (Typically foreign property owners use their properties for between 4 & 6 weeks a year.)
• See fractional ownership as a way of spreading their portfolio and reducing their financial exposure.
• Realise that their budget would allow them to buy a 12 weeks use of a significantly better property than they could otherwise afford if they used that budget to buy a whole property.
• Want to be able to arrive at their property knowing that it has been cleaned, that the bed linen has all been changed, that the fridge is stocked with basics and that they can head straight for the pool or the bar.
• Want to be able to share in any capital appreciation if they sell their fraction at some time in the future.

There are a number of fractional schemes in operation, with many more comprehensive schemes offering protection for both owners and developers. They do so by ensuring that properly structured documentation, prepared by highly experienced international property lawyers, is in place for all the properties available on a fractional basis, namely:

• Property management agreements
• Fractional sales contracts
• Properly constructed usage calendars to ensure that each owner is treated absolutely fairly in the allocation of their weeks throughout the year.

Fractional property purchases follow the same process as any freehold purchase. Legal advice is strongly recommended for all buying clients.

As with any property purchase, clients want to be sure that they are receiving the best advice at all times. To safely purchase a property fractionally you will need to employ:

• Fractional sales professionals with extensive product knowledge.
• Sound legal, financial and tax advice using only professional partners.
• Developments which offer an extensive management and maintenance programme.

Choosing your fractional property is no different from choosing a property for outright ownership. Location, extensive sporting and leisure amenities along with restaurants, bars and shops are very important to a lot of buyers. However, you may just be attracted by the opportunity to purchase a quarter share in a property you wouldn’t otherwise be able to afford, even though it may not offer many other facilities.

Choosing a property that suits your lifestyle and needs is made easier, with far more property options available to you through fractional ownership. Not all clients can afford to purchase, for example, their own luxury villa outright, as a holiday home. Many clients can, however, afford a 25% stake in that property. Property we offer fractionally will always be of the highest quality, offering more facilities and choice for its clients.

We all dream of owning a luxury villa or apartment located in an exclusive holiday destination, but not everyone has the time or money needed to own such a property. For those of us who might struggle to afford the initial outlay and/or the maintenance costs associated with purchasing a property outright, Fractional ownership may well be the solution.

Higher standards of services and facilities are generally associated with fractional purchases. They may include things such as:

• Full management and maintenance of your property
• Rental management programmes
• Airport transfers
• Shuttles to local beaches, golf courses, shopping centres etc
• Bars/restaurants/cafes
• Pools
• Childrens’ play areas
• Sports facilities such as tennis and volleyball courts etc.

Typically, all fractional properties will be furnished to a very high standard and fully equipped. The concept is designed to make owning your home a hassle free experience, leaving you time to enjoy your usage.