Turkey: Memorandum About Turkish Real Property Law From the Viewpoint of Foreign Investors

Last Updated: 14 April 2005
Article by Vural Günal


There have been positive developments in attitudes of foreign real and legal persons, particularly those from European Union Member States, in their approach to buy real properties ("Real Property") in Turkey or to acquire some real rights thereof in the wake of the EU’s decision in December to start membership negotiations with Turkey. Hence, the need was prompted to provide legal advice that may be of interest for such foreign investors in assistance and guidance of their approach within the framework of the Turkish real property law.

This Memorandum was prepared for the purpose of presenting a brief general viewpoint about the legal principles on the subjects related with the purpose referred to above.


1. Subject of the Real Property Ownership:

Pursuant to Article 683 of Turkish Civil Code that became effective on 01.01.2002, owner of a property is entitled to use, benefit and dispose of such property in whatever way he wishes - albeit within the boundaries of the order of laws.

The Turkish Civil Code (Article 704) lists the following as subjects of the real property ownership:

  • Land,
  • Independent and permanent rights registered in a separate page in the Land Registry Records, and
  • Independent units registered in the Condominium Registry Records...

2. Acquisition of the Real Property Ownership:

Ownership of real property (Real Property) is acquired upon registration in the Land Registry (Article 705).

Ownership of the land covers the space and layers both above and under the ground of the subject land, to the extent of benefits of such use (Article 718). This means that existing buildings on the land are also included in the subject of ownership on the real property. Article 718/2 of the Code stipulates that, "the content of the ownership comprises - without prejudice to the legal restrictions and restraints - the buildings, vegetation, and resources on the land".

3. Determination of Real Property Borders:

The borders of the real property are determined by land registry plans and the border marks existing on the land (Article 719).

4. Restrictions:

The restrictions and limitations over the ownership of the real property arising out of the laws are applicable and effective, regardless of such restrictions having been registered in the land registry or not (Article 731).

Imposition of restrictions over the ownership rights of a real property for public interests is subject to the private law provisions (Article 754).

5. Pledge on Real Property:

Pledge on real property can be established only through the following means:

  • mortgage,
  • mortgage backed borrowing instruments, and
  • annuity charge (rent) bond...

5.1. The Rule Regarding the Principal Sum:

Pledge on real property can be established only as a security for repayment of a certain amount of debt shown and expressed in Turkish currency.

However, as an exception, real properties can be pledged as a security for repayment of debts in foreign currency for the purpose of securitization of credits extended by the local or international CREDIT INSTITUTIONS either (in foreign currency) or (indexed to foreign currency).

In the latter case, in calculation of the equivalent in Turkish currency of the debts in foreign currency, the then current "foreign exchange buying rate" published by the Turkish Central Bank is employed (Article 851).

5.2. The Rule Regarding the Interest Rate:

The relevant parties may freely decide the interest rate, without prejudice to the restraining provisions of the laws (Article 852).

5.3. Scope:

A pledge restricts the real property together with its integral parts and annexes.

6. Mortgage:

According to the Code, any outstanding and unpaid debt which exists, or does not exist yet, but will definitely or probably arise can be secured by a mortgage (Article 881).

Land registry officer, upon demand, issues and delivers to the creditor a document in proof of the mortgage; this document is not a negotiable instrument, and it only testifies that the mortgage is registered (Article 882).

Transfer of ownership of the mortgaged real property does not change or alter the liabilities of the debtor or the securitization underlying such mortgage, unless otherwise agreed (Article 888).

7. Land Registry:

All real rights existing over the real properties are registered in the Land Registry (Article 997). Each real property is assigned one page in the land registry logbook, and the pages of this logbook are serially numbered (Article 1000).

Real properties are registered in the Land Registry of their location (Article 1004).

The Government is held liable for all and any damages and losses arising out of or in relation with the keeping of the Land Registry records (Article 1007).

The Land Registry records are open to and accessible by any person who holds a persuasive interest thereon (Article 1020).

Any and all ownership or other real rights of third persons arising out of their reliance in good faith on the Land Registry records are reserved and protected (Article 1023).


The issue of acquisition of real property in Turkey by the foreigners should be analyzed separately for (real persons) and for (legal entities).

The concepts of (foreigner) and (real property acquisition) require, before all, the review and analysis of Legislation for Protection of Value of Turkish Currency which governs and regulates all payments made in foreign currency.

1. Legislation for Protection of Value of Turkish Currency:

1.1. The Law:

The Law 1567 for Protection of Value of Turkish Currency authorizes the Council of Ministers to regulate, and if required, restrict all exports/imports to/from Turkey of "all assets and instruments such as foreign exchange, cash, securities and precious metals and stones".

1.2. Governmental Decree No. 32:

In reliance upon the power vested in it by the Law 1567, the Council of Ministers has on 11.08.1989 enacted and issued the Governmental Decree no. 32 for Protection of Value of Turkish Currency.

Article 16 of the Governmental Decree 32 sets forth the main principles regarding the subject. Accordingly:

(i) It is free for persons resident outside Turkey to transfer abroad through banks and special financial institutions the revenues and the proceeds of sale of the real properties, and of real rights associated to such real properties purchased or owned by them in Turkey.

(ii) Transactions in relation with acquisition and sale of real properties and real rights of such real properties by persons resident abroad are required to be reported quarterly to the Treasury Undersecretariat by the General Directorate of Land Registry and Cadastral, and by banks and special financial institutions within 30 days following the end of the relevant quarter.

In brief, the principles set forth by the above mentioned Governmental Decree require the foreigners intending to purchase a real property in Turkey to transfer the purchase price of the real property to Turkey via a bank, and it is also understood that these transactions are followed up by and reported to the Treasury Undersecretariat.

1.3. Turkish Central Bank’s Circulars:

1.3.1. Circular Marked With (I-M):

Article 29 of the "Turkish Central Bank’s Circular on the Governmental Decree 32 For Protection of Value of Turkish Currency and on the 91-32/5 Communiqué of the Prime Ministry Treasury Undersecretariat", marked with (I-M), issued by the Turkish Central Bank on 03.07.1991 by virtue of the power vested in it by the Governmental Decree No. 32, also stipulates that "the revenues and the proceeds of sale of the real properties or the real rights of such real properties purchased or owned in Turkey by the persons resident abroad are (can be) transferred outside Turkey through banks and special financial institutions, subject to documentation and proof of payment of taxes and similar other financial liabilities in relation therewith".

1.3.2. "Invisible Transactions" Circular:

Article F-4/a of the Turkish Central Bank’s Invisible Transactions Circular no. 2000/YB-4 provides that, "rents and other revenues obtained by persons resident abroad from real properties owned by them in Turkey and from real rights of such real properties are (can be) transferred abroad".

1.3.3. "Capital Movements" Circular:

The Turkish Central Bank’s "Capital Movements Circular" no. 2002/YB-1 also repeats in its Section: II/2 that "net amount of the revenues and the proceeds of sale of the real properties and the real rights of such real properties owned in Turkey by persons resident abroad remaining after deduction of taxes and similar financial liabilities therefrom can be transferred abroad via banks and special financial institutions".

2. Legislation and Procedures About Land Registry:

2.1. The Concept of (Foreigner):

The concept of "foreigner" used in the legislation pertaining to the land registry refers to real persons other than citizens of the Republic of Turkey, and to legal entities founded and active outside the borders of the Republic of Turkey. It should, however, be noted here that aforementioned Governmental Decree for Protection of Value of Turkish Currency does not define the "subject" according to the "nationality", but according to whether the residence of the right owner is in Turkey or not.

2.2. Conditions for Acquisition of Real Properties by Foreign Real Persons:

2.2.1. Circular:

Land registry procedures of foreigners in Turkey are governed by and subject to the Circular, no. 982-2/3090, dated 23.08.1989, issued by the General Directorate of Land Registry and Cadastral.

2.2.2. Reciprocity Principle:

Reciprocity principle is applied in acquisition of real properties in Turkey foreign persons. This means to say that the home country of the foreign person in question should also have given the same right to the Turkish citizens.

As an example, some of the countries for which this reciprocity principle is applied are:

- Germany,

- Unites States of America,

- Australia,

- Belgium,

- France,

- Netherlands,

- England,

- Spain,

- Italy,

- Canada,

- Turkish Republic of Northern Cyprus (KKTC),

- Norway,

- Israel

- There are exceptions to this rule of reciprocity. These exceptions can be summed under following headings:

- Acquisition of real properties by stateless persons (heimatlos),

- Acquisition of real properties by refugees,

- Acquisition of real properties for tourism industry investments, and

- Acquisition of real properties by foreign real persons through inheritance and transfer...

2.2.3 Legal Restrictions on Real Property Acquisition:

Some restrictions and limitations have been imposed by the below listed laws on acquisition of real properties in Turkey by foreigners: Village Act:

In the past, as the right of foreigners to acquire real property in Turkey was restricted within the borders of the municipalities only, they could not purchase real property in villages pursuant to the Village Act (Article 87). This provision was repealed by the Law 4916 in 2003. Land Registry Law:

Foreigners are allowed to acquire independent farms which are not administratively attached to a village, and lands in excess of 30 hectares outside village borders only with a prior Decree of the Council of Ministers. Forbidden Military Zones Act:

Real property acquisition in forbidden military zones is generally prohibited by this Act. Retaliation Act:

Bans may be imposed and applied temporarily on citizens of the foreign countries which impose restrictions on the Turkish citizens.

2.3. Acquisition of Real Properties by Foreign Legal Entities:

2.3.1. Rights Granted to and Reciprocity Principle for Trading Companies:

By the amendments introduced to the Land Registry Law by the Law 4916 in 2003, the trading companies having a separate legal personality founded in foreign countries in accordance with the laws of such foreign countries are permitted to acquire real properties within the borders of the Republic of Turkey, subject to the reciprocity principle and the current legal restrictions. Previously, in principle, foreign legal entities were prohibited to acquire real properties in Turkey, except for acquisition based on bilateral agreements between the relevant countries.

Thus, as per the new legislation, for the purposes of the reciprocity principle, all of the rights of acquisition of real properties granted by a foreign country to its own citizens or to trading companies having a separate legal personality founded therein in accordance with the applicable laws thereof should be granted also to the citizens of or the trading companies founded in the Republic of Turkey.

2.3.2. Land Acquisitions in Excess of Thirty Hectares:

Trading companies having a separate legal personality founded in accordance with the laws of foreign countries are permitted to acquire real property up to 30 hectares in Turkey; however, real property acquisitions in excess of 30 hectares are subject to a prior permission of the Council of Ministers.

2.3.3. Exception:

Reciprocity condition is not sought for in case of the establishment of limited real rights on a real property in favor of foreign real persons or foreign trading companies (Land Registry Law, Article 35). However, the Council of Ministers may refuse to apply this Article in certain places or occasions as required by the public interests and security.

2.4. Procedures:

Requests of foreign trading companies having a separate legal personality are fulfilled by the Land Registries subject to a prior instruction of the General Directorate.

2.5. Laws Giving Privileges to Foreign Legal Entities:

2.5.1. Law for Encouragement of Tourism:

Foreigners are permitted to acquire real properties in locations classified as "tourism development zones" pursuant to the Law For Encouragement of Tourism, without being subject to limitations set forth for foreigners by the Land Registry Law. As a matter of fact, according to Article (8/E) of the Law For Encouragement of Tourism no. 2634, the acquisition of real properties in culture and tourism "protection and development areas" may, by a Decree of the Council of Ministers, be exempted from the restrictions and limitations imposed by the Land Registry Law on foreigners.

Paragraphs "C" and "D" of the same Article stipulate that "allocation" and "rent" of real properties to, and "establishment of easement rights" in real properties in favor of foreigners are under authority of the related Ministry.

2.5.2. Direct Foreign Investments Act:

According to the Direct Foreign Investments Act 4875 of 2003, the term "direct foreign investment" means "to found a new company or to open a branch or to purchase and acquire stocks in the over-the-counter market or to acquire interests and shares in an existing company by purchasing capital shares or voting rights equal at least 10% in the exchange, by a foreigner by bringing from abroad to Turkey (i) cash capital in a convertible currency, (ii) corporate securities except for government bonds, (iii) machinery and equipments, (iv) industrial and intellectual property rights, or by obtaining from domestic market (v) profits, income, monetary receivables and other investment-related rights having a monetary value for use in re-investments, or (vi) economic assets such as rights for exploration and extraction of mines and other natural resources.

Article (3/d) of the Act provides that companies having a separate legal personality founded or participated by foreign investors in Turkey are free to acquire real properties or limited real rights in locations where the Turkish citizens are also permitted to acquire the same.

Here, it is worth mentioning that while as per the Land Registry Law, "trading companies" as legal entities are permitted to acquire and own real properties in Turkey, in this Direct Foreign Investments Act, "companies having a separate legal personality", which is clearly a broader term, are permitted to acquire and own real properties in Turkey.

2.5.3. Banks Law:

Foreign banks permitted to open branches in Turkey are also permitted to acquire real properties as and when needed for their banking activities (Article 12/2).

2.5.3. Petroleum Law:

According to Article 87 of the Petroleum Law 6329, holder of "oil mining license" can acquire the right to use the subject mining land by reaching a mutual agreement with the landowner or through expropriation.


It is deemed appropriate to give brief information in this memorandum about real property investment partnerships ("Partnership") in terms of their relationship with the real property ownership and considering that they are relatively new in the Turkish capital markets.

1. Legal Grounds:

Investment Partnerships can also be founded for the sole purpose of management of a real property portfolio, according to Article 35 of the Capital Markets Law 2499 as amended by the Law 3794.

Article 36 of the same Law authorizes the Capital Markets Board to determine principles regarding the portfolios, profit distribution, custody services, obligations and liquidation of the real property investment partnerships. The Capital Markets Board is also authorized to regulate all "Capital Market Institutions" as per Article 32 of the Capital Markets Law. "Communiqué of Principles on Real Property Investment Partnerships", no. VI/11, issued by the Capital Markets Board and published in the Official Gazette on 08.11.1998 makes all of the necessary arrangements in relation with this topic; and various amendments have been made in the Communiqué thereafter.

2. Information about the Real Property Investment Partnerships:

2.1. Definition:

Capital Market Institutions;

(1) which are authorized to invest in

- real properties,

- capital markets instruments based on real property,

- real property projects,

- real property-based rights, and

- capital market instruments; and

(2) which are authorized to form and found "ordinary partnerships" on ad hoc basis solely for certain projects; and

(3) which are authorized to perform (other activities) permitted by the Communiqué;

are called "Real Property Investment Partnerships (Partnership)".

2.2. Types:

A Real Property Investment Partnership can be founded:

- only for a certain time period in order to realize a certain project,

- for a certain time period or without any time restriction in order to invest in certain areas, or

- for a certain time period or without any time restriction, without any restriction or limitation on its intended activities and objectives.

2.3. Conditions Sought For In Founders:

- Real Property Investment Partnerships can be founded by real persons as well as legal entities. Founders of a Partnership, and real and legal person direct and indirect shareholders holding 10 percent or more of the capital of a Partnership must not have any (outstanding tax obligations) and (social security premium debts). Such founders and 10 percent or more capital holders of a Partnership must have provided their capital investments in the Partnership, FREE OF SIMULATION.

- It is also a prerequisite that real person partners themselves or the partnerships where they are partners with unlimited liability should not have been adjudged bankrupt, and should not have entered into composition with their creditors. Partners, directors, specialized personnel, inspectors, and company auditors should not have been convicted of infamous crimes or breach of provisions of Capital Markets Law and related regulations, Banks Law, and the regulations about money laundering and lending business.

Real Property Investment Partnerships can be founded only by the persons satisfying the criteria listed above, and in case a prosecution is commenced or an offense is reported against those intending to found a Real Property Investment Partnership, such requests may be suspended until finalization of the related court proceedings.

2.4. Foundation:

Real Property Investment Partnerships can not be founded according to the (gradual foundation) process defined in the Turkish Commercial Code. They can be founded only by:

- instantaneous process, or

- "change of kind" of an existing joint-stock company

(i) Instantaneous Foundation:

Following conditions should be satisfied if the Real Property Investment Partnership is to be founded by instantaneous foundation process:

  • Joint-stock company should be founded in registered capital system;
  • Not less than 49 percent of the capital should be offered to public;
  • Its initial capital should be at least 6 trillion 550 billion Turkish Liras (or YTL 6,550,000) for 2005;
  • At least 25 percent of the share certificates representing the initial capital should be issued against cash payment;
  • An application should be made to Capital Markets Board for a Portfolio Management License in order to carry out portfolio management activities;
  • The company name should include "Real Property Investment Partnership";
  • At least one of the founding partners should act in the capacity of "Leader Entrepreneur". (Leader Entrepreneur(s) is/are partner(s) owning at least 25 percent of the capital individually or jointly, and satisfying the conditions set forth by Article 7 of the Communiqué about the qualifications of the founders, and Article 8 thereof about the special qualifications of the Leader Entrepreneur); and
  • Positive opinion of the Capital Markets Board should be received...

(ii) Change of Kind:

Following conditions should be satisfied if the Real Property Investment Partnership is to be founded through change of kind of an existing joint-stock company:

  • Registered Capital System should be adopted or an application should have been made to the Capital Markets Boards for that purpose;
  • It should undertake to the Capital Markets Board to offer at least 49 percent of its capital to public;
  • Its issued capital or existing capital should be at least 6 trillion 550 billion TL (or YTL 6,550,000) for 2005;
  • At least one of the "existing" partners should be "Leader Entrepreneur"; and
  • "Real person" or "legal entity" partners holding 10 percent or more of the capital, and its directors should possess the qualifications set forth in the Communiqué (these qualifications can be summed as not having any outstanding tax obligations or any outstanding social security premium debts, not having been adjudged bankrupt, not having committed any infamous crimes or breach of any provisions of the Capital Markets Law).
  • Other conditions are listed in Article 10 of the Communiqué in details.

2.5. Qualifications of the Leader Entrepreneur:

The Communiqué allows both real persons and legal entities to be a "Leader Entrepreneur". The share certificates representing the minimum capital share of the Leader Entrepreneur(s) shall be registered shares (written to name).

(i) Following qualifications should be satisfied if the Leader Entrepreneur is a real person:

  • Annual gross income of these persons should consistently be above 655 billion TL (YTL 655,000) for the year 2005.
  • Taxable value of the total movable and immovable assets of these persons should be at least YTL 6,550,000 (for 2005).
  • Sufficient knowledge and experience on the fields of activity is a prerequisite.

(ii) Following qualifications should be satisfied if the Leader Entrepreneur is a legal entity:

  • The legal entity to act in the capacity of Leader Entrepreneur should have at least 5 years of past experience.
  • Financial statements for the period of application should have been audited by independent auditors.
  • The legal entity to act in the capacity of Leader Entrepreneur should have recorded a profit in the previous three activity periods.
  • In its most recent financial statements, total assets should not be less than YTL 20,600,000, and net profit for the period should not be less than YTL 2,060,000 (for 2005).
  • If there are more than one Leader Entrepreneurs, above listed qualifications are sought for each of the real and legal person Leader Entrepreneurs separately.
  • It should be equipped with sufficient knowledge about the fields of activity.

2.6. Privileged Shares in Partnerships:

During foundation or change of kind, Real Property Investment Partnerships can not issue any privileged securities and real property certificates other than the privileged share certificates conferring "privilege of nomination" in elections of directors.

No privilege including that of nomination in elections of directors can be created after the public offering.

2.7. Formation of the Board of Directors:

Qualifications of the directors and auditors in regards with educational background and experience have been enumerated and listed in Article 17 of the Communiqué.

The Board of Directors may include foreign nationals; however, the majority of the Board members should be Turkish citizens.

One third of members of the Board of Directors should be "independent" in their status. This requirement, namely the obligation to elect at least one third of members of the Board of Directors from among the independents, is also required to be included in the Articles of Association. For the purposes of the Communiqué, the independence means being independent from:

- Leader Entrepreneur;

- Companies in which the Leader Entrepreneur holds more than 10 percent of shares or voting rights;

- Other partners holding more than 10 percent of shares or voting rights in the Real Property Investment Partnership;

- Shareholders having the privilege to nominate in elections for the Board of Directors;

- Any company supplying "consultancy" service to the Partnership within framework of a contract signed with the Real Property Investment Partnership, on areas such as development of the Partnership’s portfolio and investigation of alternative investment opportunities, also including project development and supervision services; and

- Any company having privilege in the Real Property Investment Partnership; any company holding 10 percent or more shares or voting rights in the Real Property Investment Partnership; and any "operating company" which operates for commercial purposes a hotel, hospital, shopping center, business center, trade parks, commercial warehouses, mass housing estates, hypermarkets and similar other real properties owned by or under tenancy of the Real Property Investment Partnership, pursuant to a contract signed with the Real Property Investment Partnership.

2.8. Board Resolutions of Special Character:

According to the Communiqué, "Board resolutions about the subjects and related with the (parties) referred to in the Communiqué, "if not taken unanimously" should be disclosed to the Capital Markets Board and the Istanbul Stock Exchange together with the reasons thereof, in accordance with the Communiqué on Special Event Disclosures... and such resolutions should be taken into the agenda of the next General Assembly Meeting, and the shareholders should also be informed...". Persons and entities meant by the aforementioned (parties) as defined in (Article 21) of the Communiqué, which provision has obviously been prepared in consideration of the shares offered to the public, are as follows:

- Leader Entrepreneur,

- Shareholders holding 10 percent of the capital shares or voting rights of the Real Property Investment Partnership,

- Shareholders having the privilege of nomination in elections of directors;

- Other companies, 10 percent or more of the shares or voting rights of which is owned by the above mentioned persons or entities,

- Consultant firm of the Real Property Investment Partnership, and

- Subsidiaries of the Real Property Investment Partnership.

The resolutions having special character are listed by the Communiqué as follows:

- Purchase-sale or renting or letting for rent of an asset included in the portfolio of Real Property Investment Partnership,

- Selection of companies for marketing of the assets,

- Establishment of credit relations,

- Selection of intermediary company for underwriting in the public offering of shares of Real Property Investment Partnership,

- Joint investments (we believe it means joint venture),

- Selection of persons or companies for consultancy services (financial, legal and technical),

- Selection of persons or companies for project development and supervision services or other contract services, and

- Inclusion, to the Partnership’s portfolio, of the securities issued by persons defined as a "party" by the Communiqué...

In addition to the above list, resolutions bearing favorable results for any one of the "parties" have also been categorized in "special character".

2.9. Third-Party Management of the Portfolio:

Management of the Partnership’s portfolio may be commissioned under a "consultancy services contract" to an institution holding Portfolio Management Authorization Certificate received from the Capital Markets Board. This contract is valid for a period of one year, at the end of which it may be renewed, or if not renewed, is automatically terminated.

2.10. Prohibited Activities of Partnerships:

The activities which the Real Property Investment Partnerships are not allowed have been listed in the Communiqué as follows:

  • They can not collect deposits;
  • They can not carry out trading, industrial and agricultural activities;
  • They can not carry out capital markets activities other than portfolio management in their own name and account;
  • They can not undertake real property construction works themselves. Nor can they employ personnel and own equipment other than those required for the purpose of supervision of the construction works;
  • They can in no way be engaged in the commercial operation of hotels, hospitals, "shopping centers, business centers", trade parks, commercial warehouses, mass housing estates, hypermarkets and similar other real properties, and can not employ personnel for such operation purposes. (Except for the Operation Agreement signed with the Operating Company), they can not operate real properties for commercial purposes and they can not offer related services to the tenants;
  • They can not offer or provide to other persons the project development, project supervision, financial feasibility, receipt of legal licenses, and similar other services (Article 24);
  • They can not pursue the objective of controlling the capital and management of the partnerships they have participated; and accordingly, they are not allowed to obtain and hold more than 5 percent of the capital and voting rights of the partnerships they have formed;
  • They can not invest in precious metals such as gold;
  • They can not invest in capital market instruments which are not listed in stock exchange;
  • They can not invest in commodity based future contracts or in commodities;
  • They can not make short sale and lending transactions of securities;
  • They can not make derivative transactions in excess of hedging purposes;
  • They can not pay commissions, fees, etc., excluding taxes and similar financial liabilities, in excess of 3 percent of the value of the asset, for the purpose of purchases and sales to/from their portfolio;
  • They can not invest in assets with limited transfer rights, and
  • They can not make short/term real property trade constantly and continuously (Article 26).

2.11. Project Constructions:

Real Property Investment Partnerships have to commission the construction works of their projects to "contractors" (Article 36).

2.12. Expert Advice on Value Assessment:

Value assessments should be carried out by independent expertise survey companies included in list of Capital Markets Board. Real Property Investment Partnerships can purchase service from the same expertise survey company for a maximum of FIVE consecutive years (Article 39/2).


It has been considered beneficial to give very brief information about swiftly ongoing preparations for (Mortgage) system in Turkey, due to its closeness to the subject of real property.

Real property demand has recently boosted in Turkey in parallel with the positive developments in economy. Therefore, taking into consideration the international developments, there are efforts to reformulate a house financing system, in the wake of abolishment by the Government of Turkiye Emlak Kredi Bankası (Turkish House Credits Bank) which has assumed functions for the development of housing projects in Turkey in the second and third quarters of the last century. There are official statements saying that a draft bill of law about this subject is in preparation, details of which have also been declared to the public.

According to this projected system, a (Mortgage Housing Finance Corporation) shall be founded which will function in accordance with the following principles:

    1. In addition to its capital, this Corporation can borrow credits and issue bonds and asset-based securities in Turkey; and issue bonds and borrow credits abroad.
    2. The funds of this Corporation thus formed will be disbursed to banks as credits, and the latter will in turn use these credits for making long-term credits available to individuals demanding to buy a house.
    3. Mortgages to be established as a security for repayment of the loan debts of the persons buying houses by these credits will be sold or transferred to the Mortgage Housing Finance Corporation in accordance with Article 891 of the Turkish Civil Code.
    4. Thus, a (mortgage fund) similar to an investment fund will be established, consisting of the mortgages sold or transferred to this Corporation, and participation certificates of this mortgage fund will be sold to the investors by a futures contract with coupons.
    5. The cycle is intended to be completed and continued by the Mortgage Housing Finance Corporation disbursing again to banks as credit facilities to be used for mortgage housing purposes by using the funds it obtains through sale of mortgage funds to investors.

The Draft Bill of Law prepared for efficient operation of the Corporation intended to be assigned for raising funds through various means anticipates amendments in a number of existing laws. The legal principle adopted in preparation of the referred law is that it should follow the example of the existing (mortgage) laws in the world. It is also hoped that economic conditions and long term funding interest rates will also provide an appropriate atmosphere for proper functioning of such a system in Turkey soon.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.