Mid-income housing campaign contractor game

As applications for the Middle-Income New Home Campaign began this week, new details about the campaign began to emerge.

With the support of the 3-year Treasury, the amounts of the installments did not live up to expectations in the campaign, which seemed advantageous.

First, a citizen who wants to benefit from the campaign must determine the new houses that are within the scope of the campaign and meet with the contractors. However, according to the campaign, it was revealed that the contractors, who were required to deposit 5 percent of the appraised value of the property in the bank as a contribution to the Ministry of Environment and Urbanism, added that money to the price of sale of real estate.

When the citizen is asked for the deed fee, the tax and the VAT derived from the declaration of total value, the sale price of the property increases again. In other words, the contractor adds the amount of the tax, which is the difference between the cost of the floor, which appears as low on the balance sheet, and the actual price, on top of the price of the floor.

EXTRA ACCOUNT OF 750 thousand TL FOR CITIZENS

Speaking to Sozcu.com.tr, real estate consultant Keller Williams Cadde Burçak Sencer Çokgör described the campaign as “There is a difference between what is announced and what is implemented. It does not contain the mathematics” when summarizing; Real estate appraiser Celal Erdoğdu explained that these stages made citizens pay an additional 750 thousand TL for a house worth 5 million TL.

Let us explain this situation through an example with the Erdoğdu calculus:

That the house to buy is 5 million TL.

The contractor deposits 5 per cent of the appraised value of the house, i.e. TL 250,000, in the bank, but increases the price of the house from TL 5 million to TL 5,250.

The price of the house rises to 5.5 million TL when the contractor declares 2.5 million TL and asks the citizen to pay the tax for the house he sells for 5 million TL.

Erdoğdu said, “Prices had already risen in the range of 5 to 15 percent because there would be a campaign,” saying, “As a result, a house worth TL 5 million increased to TL 5,750,000.”

‘IT CAN BE SOLVED WITH INFLATION CORRECTION’

Erdoğdu stated that it was observed that contractors would not assist citizens in sales unless they were tax exempt, and made the following suggestion:

“Let’s say a contractor built the property early last year for 1 million TL for the cost of the flats and 1 million TL for the cost of the land, and spent 2 million TL. A year has passed and its value has risen to 4 million, and his property is still standing. When the government asks for the 2 million TL tax, the contractor says ‘adjust us for inflation’.

Therefore, it could be said that “the inflation adjustment is made at the time of issuing the invoice” for the properties that are subject to sale at this time.

If the contractor side is strengthened, this project can work in the long term. But at the point reached today, people say ‘it didn’t work for us’, ‘we couldn’t take advantage of it’”.

100 THOUSAND PEOPLE SAID THEIR OWN HOME, THERE ARE 78 THOUSAND HOMES

Another striking negative aspect of the campaign is that while 100,000 citizens were said to become homeowners in the first place, there were not 100,000 residences within the scope of the campaign.

Erdoğdu, who said that 5 million of which fit into new flats in Istanbul were 19 thousand residences under TL, said that in Ankara, İzmir, Bursa, Antalya, Mersin and Muğla, there are 21 thousand new flats in total up to 3 million TL ; He also informed that there are 38 thousand houses of up to 2 million TL in other provinces.

NOT ALL HOMES ARE SUITABLE FOR THE CAMPAIGN

In other words, Erdoğdu pointed out that there are 78,000 new houses that have already been announced across the country, and drew attention to the fact that a significant part of these real estates do not meet the conditions of the campaign, explaining that they do not it is possible that 100 thousand citizens have their own house with the campaign.

CONTRACTORS DRAW THEIR ADVERTISEMENTS, DO NOT PARTICIPATE IN THE CAMPAIGN

“You are going to convince the contractor within the limited housing, the properties will have to comply with the conditions requested by the banks. Erdogdu continued:

“The properties that were not included in the campaign were removed from the ad, some contractors did not want to go to the campaign and removed their ads. Among those who will participate in the campaign, there were also those who were attracted by their ads. These are also sold through intermediaries.”

WILL BENEFIT FOR BRAND NEW HOUSES

Real estate appraisal expert Ahmet Büyükduman, speaking to Sozcu.com.tr, noted that as a result of the campaign’s problems in practice, branded residences will be the focus of the project.

Explaining that a contractor, who started construction a year ago and sold a flat for 1 million TL, for 2 million lira, would pay tax on the 1 million TL gain to the state, Büyükduman said: “However, if built the house today, the cost would be 1.5 million TL, that is, 500 TL, which he could not write due to inflation. He will have to pay income tax for a thousand lire. That’s why they don’t want to pay the full bill,” he said.

“Since there will be unrecorded transactions in projects other than branded residences, branded residences will be the focus of the Yeni Evim Housing Campaign.”