Turkey: Foreigners' Acquisition Of Immovable Properties In Turkey

Last Updated: 30 October 2018
Article by Faruk Aktay and Selin Sınar

Under the provisions of the Land Registry Law No. 2644 (the ¨Law¨1), acquisition of an immovable property in Turkey is possible for foreign real persons and entities; however, there are also certain restrictions. This informative note aims to provide the process of acquiring property by foreign persons and entities which also indicates the documentation required within the scope of the process.

Legal Grounds

As per Article 35 of the Law, foreign persons and entities are able to acquire immovable and to create limited rights in rem in Turkey by complying with the legal restrictions. Pursuant to the amendment brought by the Law No. 6302, the reciprocity requirement was abolished. Following the abolishment of the reciprocity requirement, the Law entitled the President of Turkey to determine on the names of the countries whose citizens can acquire real property and create limited rights in rem in Turkey.

Legal Restrictions

According to Article 35 of the Law, the total size of a real property which might be acquired and/or limited rights in rem which might be created by a foreign real person across Turkey shall not exceed 10% of the total surface area allowed for private ownership in the respective district. A foreign person may acquire a real property and create limited rights in rem in Turkey up to 30 hectares in total. The President of Turkey is able to increase such amount up to 60 hectares.

Foreign real persons and legal entities are subject to the restrictions stated under the Law of Military Forbidden Zones and Security Zones. Within this scope, an approval of military authorities shall be required, which can be obtained in case the property is not located in a strategic, military or security zone, or is not a threat to national security.

On the other hand, in case the acquired immovable is unconstructed, foreign individuals should submit their construction related project to the relevant ministry in order to receive an approval within two years.

Both immovable properties which (i) have been acquired in contrary to the provisions of the Law and (ii) have been utilized in contrary to its acquisition purposes, and unconstructed properties, in case the relevant ministry's approval has not been obtained or the construction project has not been fulfilled within the legal period, shall be subject to liquidation procedure.

Process

Representation

The acquisition process of an immovable by foreigners in Turkey can be followed by proxy. If the acquisition process will be carried out by proxy, a power of attorney ("PoA") needs to be issued by the foreigner which should be notarized and apostilled in order to be used in Turkey. After notarization and legislation processes, the document should also be translated to Turkish before a notary public in Turkey.

Obtaining A Potential Tax Number

A potential tax number should be obtained before carrying out the relevant sale transactions. Since certain procedures need to be followed before tax offices for obtaining a potential tax number, It would be advisable to point out that potential tax numbers can be obtained by proxy. Within this scope, the authorized person shall submit a petition by stating full names of mother and father and address of the foreign individual together with duly authorized power of attorney and a duly translated copy of a passport, without paying any fee.

Determination of the Area

Foreign individual shall determine the area and the type of the real property initially. Foreign individual as a buyer and owner of the determined property as a seller shall have a common will to fulfill the sale transaction, accordingly.

Assessment Report

After determination of the real property, in order to appraise the property, an assessment report should be obtained from one of the assessment authorities specified in the websites of the Capital Markets Board and Banking Regulation and Supervision Agency.

Real Estate Appraisal

A real estate appraisal should also be obtained from the relevant Municipality where the property is located.

Mandatory Earthquake Insurance Policy

Foreign individual or his representative shall execute an earthquake insurance policy for the property which is mandatory under the legislation.

Application to Land Registry Directorate

An online pre-application shall be made by Turkish citizens (proxy) via http://turkiye.gov.tr or https://randevu.tkgm.gov.tr/ in order to accelerate the process.

Upon application, Land Registry Directorate will initially ask whether the property is located in a military, strategic or security zone, or is a threat to national security from the military authorities. The military authorities shall response these type of requests within approximately 1 or 1,5 month. Land Registry Directorate will also control whether or not, there is any constraints on the immovable that might prevent the sale transaction such as pledge and mortgage. Upon verification, in case the immovable is not located in a military, strategic or security zone and there is no restriction on such immovable, Land Registry Directorate shall commence the sale transaction.

Form and Execution and of the Sale Agreement

Buyer and seller shall initially determine a sale value of the property which should be at least an amount corresponding to at least USD 250.000 in between the amounts stated under assessment report and real estate appraisal.

It should be indicated that as per Article 237 of Turkish Code of Obligations No. 6098, sale of an immovable property shall be valid only if the agreement executed pursuant to the official form and registered to the relevant land registry directorates. Within this scope, the agreement should be prepared as an authenticated document and sign before the Land Registry Directorate. On the other hand, for the sale commitment agreements of immovable properties, the official form and registration shall also be required to obtain ownership of the property. Therefore, these type of agreements shall be executed before a notary public and registered to the Land Registry Directorate, accordingly.

Undertakings To Be Obtained Before Land Registry Directorate

We hereby would like to point out that foreign individuals or their representatives shall acknowledge, declare and undertake that, under no circumstances, the total size of the acquired real property and/or the created rights in rem in Turkey do not exceed 30 hectares unless otherwise, the exceeded area shall be liquidated and paid to its owner.

In terms of the unconstructed properties, foreign persons or their representatives shall also acknowledge and undertake before Land Registry Directorate that the relevant ministry's approval for construction project will be obtained within two years from the acquisition.

Furthermore, at the execution stage, an annotation is also required to be obtained. Accordingly, foreign individuals or their representatives shall acknowledge, declare and undertake that they do not sale the property within three years from the date of acquisition.

The Required Documentation

The following documents should be provided to the Land Registry Directorate during the application.

  • A notarized and apostilled copy of PoA
  • A duly translated copy of passport by a sworn translator
  • A bank account details
  • Title deed of the immovable, and/or information on village/district, lot, parcel, building and independent section
  • An assessment report
  • A real estate appraisal from the relevant municipality
  • Mandatory Earthquake Insurance Policy
  • Photographs of buyer (two copies) and seller (one copy) (within the last six months, size 6x4)

Fees to Be Charged

Certain fees that the foreign individual should pay to complete the sale transaction process are as follows:

  1. Title deed fee shall be paid over the sale price which shall be determined pursuant to the real estate appraisal obtained from the relevant municipality (as per Act on Fees No. 492, in the ratio of 1,5% of sale price until the end of October). One should note that both the buyer and the seller are subject to pay the title deed fee.
  2. A regionally determined title deed delivery fee (döner sermaye ücreti) should be paid (maximum TL 103.5 x 2.5 for 2018).
  3. Land Registry Directorate shall also charge a fixed service fee together with the title deed delivery fee in the amount of TL 485.

A Prior Condition For Obtaining Turkish Citizenship

We hereby would like to clarify that after completing the transactions regarding sale and registration, Land Registry Directorate shall send the documents to the General Directorate of Land Registry and Cadastre ("Directorate") through an e-mail to supervise. Then, the Directorate shall deliver the mentioned documentation to the General Directorate of Population and Citizenship Affairs of the Ministry of Internal Affairs ("Ministry of Internal Affairs") upon completion of its supervision. The Ministry of Internal Affairs shall issue a certificate of conformity where all the documents are appropriate. Within this scope, one of the prior conditions will be met for the foreigners who are willing to receive a Turkish citizenship.

Conclusion

Turkey grants an attractive opportunity to foreign investors in the real property sector. Accordingly, foreign real persons and entities may acquire immovable properties and/or create limited rights in rem in Turkey by complying with the foregoing legislative rules.

Footnote

1. Published in the Official Gazette dated 29/12/1934 and numbered 2892.

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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