The Law to Amend the Tax Laws and Several Laws and Decrees Having the Force of Law numbered 7161 ("Omnibus Law") was published in the Official Gazette dated 18 January 2019. The Omnibus Law changed the cap on increases in lease rates for residences and roofed workplaces. With this change, the cap imposed by Article 344 of the Turkish Code of Obligations numbered 6098 ("Code"), will shift from the producer price index to "the change in the twelve-month averages of the consumer price index".
Another important provision introduced by the Omnibus Law concerns workplace lease agreements where the tenant is a merchant. Rent increases in all leases had been capped at the producer price index, but the effectiveness of that cap had been delayed until 1 July 2020 for workplace lease agreements where the tenant is a merchant. The Omnibus Law has changed that cap to the change in the twelve-month averages of the consumer price index, and also removed the temporary postponement of the cap for such leases.
Lastly, the Omnibus Law also amended the provision regulating the denomination of rental prices in foreign currency. The amendment clarifies that the provisions of the Law on the Protection of the Value of Turkish Currency, dated 20 February 1930 and numbered 1567, are reserved. This amendment now ensures that the Code also embodies the restriction against denominating lease prices in foreign currency, unless certain exemptions apply.
All of the provisions mentioned above have gone into effect as of 1 January 2019.
Originally published January 23, 2019
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