Foreign acquisition of real estate in Turkey

FATIH KAYNARCA
Published 30.04.2019 00:10

Over the years, Turkey has become unbelievably popular with holiday homeowners and expatriates alike. Besides its rich, ancient history and impressive cultural heritage, property investors are also attracted by Turkey's nice weather, charming coastlines, multicolored waters and unspoiled locations. Statistics show that overseas homebuyers prefer coastal cities, including Istanbul, Bursa, Antalya, Fethiye and Bodrum, when buying properties in Turkey. Buying property in Turkey is also much easier than it is in many other European countries, with its fast turnaround being an attractive prospect to investors all over the world.

The first time foreign buyers were allowed to buy real estate in Turkey was in 1934 with the implementation of the Property Act. Nowadays, its real estate market is developing to become one of the leading markets among the Mediterranean countries. The main objective of this brief article is to point out the regulations and legal procedures of buying real estate in Turkey for foreigners.

Law No. 6302 came into effect with an announcement published in the Official Gazette on May 18, 2012, No. 28196. The law changed Article 35 and Article 36 of the Land Register Law.

Accordingly, the condition of reciprocity for the acquisition of real estate by foreigners in Turkey was removed. Thus, citizens of countries specified by the ministerial Cabinet may acquire immovable and limited rights in rem. The Cabinet bases its decisions on international bilateral relations and the interests of the country in determining the aforementioned countries. With the said amendment, the law entitles citizens of 183 countries to acquire immovable property "without the condition of reciprocity." The most important reason for the mentioned amendment is to open up Turkey for foreign acquisitions.

In accordance with Turkish laws and regulations, the transfer of ownership of real estate is only possible with an official deed and register signed at the Land Registry Directorates.

Moreover, it is possible to sign a notarized preliminary agreement to sell. Still, it is not possible to have real estate by the execution of the said preliminary agreement to sell before the notary or any other kind of sales agreements in that manner.

Restrictions

Before the amendment, the total surface area of countrywide immovable properties that could be purchased by foreigners could be up to 2.5 hectares. Now, foreign nationals can purchase a maximum of 30 hectares in Turkey in a limited manner.

This limit can only be at the most doubled following a decision of the Council of Ministers. Therewith, following the council president's decision, approved foreign nationals can purchase a total of 60 hectares real estate in Turkey. However, foreigners are prohibited from acquiring and renting properties within the boundaries of prohibited and security zones.

Foreign nationals can acquire real estate and limited in rem rights of up to 10 percent of the total privately owned area of the district.

Procedures regarding purchases

Buyers should be "nationals of those countries who can acquire property and limited rem rights in Turkey" and meet "the necessary conditions for acquisition."

Therefore, buyers should not be under the scope of the above-mentioned legal restrictions and be a citizen of the countries designated by the president.

In order to determine this, the relevant Land Registry Directorate contacts the relevant military office to inquire whether any obstacles related to the sale are covered by the regulations of foreigners purchasing real estate in Turkey. In cases where they are, the Land Registry Directorate begins the process of registration.

The owner of the real estate, or their authorized representative, must submit a preliminary application to the Land Registry Directorate.

Both the seller and buyer will pay for the deed, which is calculated according to the price and cannot be less than the Property Statement Value, issued by the respective municipality.

In addition to the fee for the transaction, the fixed service fee – which was TL 483.5 in 2018 – will be collected by the Land Registry Office regarding the transfer of the ownership agreements signed in accordance with Article 35 of the Land Registry Law.

During this process, if there are any potential restrictions that may affect the agreement, such as a mortgage, the buyer must inform the Land Registry Directorate.

If the application for purchasing the property is rejected, it can be appealed to the relevant regional offices of the Land Registry Directorate. Having a residency permit is not a prerequisite for foreigners to acquire real estate in Turkey. In the case of disputes between the parties involved in the sale, the disagreement must be brought before the Turkish courts.

* Istanbul-based lawyer

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