The interest in real estate investments in Turkey has clearly got with private individuals as well as at company during the last years. We would like to create an overview about the real estate acquisition in Turkey with this professional contribution. However, the professional support is recommendable by a sollicitor to bend forward all potential risks of a real estate purchase in Turkey.
I. Development of the Turkish property market
The stabilisation of the economy and progress in the accession trial in the European Union during the last years has woken the interest of the foreign investors in Turkey. Real estate industry has also profited itself from this positive development. The real estate prices in Turkey rose with it from 2002 to 2006 very strongly also thanks to the domestic demand. Even if the prices do not rise from 2006 any more as strongly as during the previous years, real estate purchase is recommended in Turkey as an investment furthermore, because the real estate demand because of the young population structure of the country will increase.
II. Legal basic conditions of the real estate acquisition through foreigners in Turkey
The principles about the real estate acquisition of foreigners in Turkey were regulated originally in the land register law with the number 2644 from 1934. In 2003 the government with the law Nr. 4916 has made easier the real estate acquisition for foreigners in Turkey. With this legislation amendment foreign-juridical restrictions concerning were lifted by properties in the village law No. 442 / in 1924 (Köy Kanunu) and land register law No. 2644/1934 (Tapu Kanunu). However, the law No. 4916 was contested briefly late by the constitutional court. On it the government according to the submissions of the constitutional court has anew regulated the legal situation about the acquisition of real estate by foreigners in Turkey with the law No. 5444 from the 29.12.2005.
The law No. 5444 from the 29.12.2005 is become effective on the 07.01.2006. With this law became article. 35 of the land register law No. 2644 (Tapu Kanunu) changed and the new basic conditions of the real estate acquisition in Turkey by foreign private individuals as well as companies.
After the current legal situation foreigners can acquire real estate in Turkey with the only following restrictions:
Mutuality principle: The real estate acquisition through foreigners in Turkey follows above all after the mutuality principle. This means that citizens are entitled only from the countries which permit the acquisition of real estate to Turkish citizens as a countermove to purchase real estate in Turkey. Turkey stands with all western countries in the mutuality relation. The current list of the countries with which Turkey stands in the mutuality relation can be read up on the website of the Turkish land registry and cadastral office (www.tkgm.gov.tr) into Turkish and English language.
Surface restriction: Foreigners may acquire in Turkey up to 2.5 hectares (25,000 square metres) of property for residential purposes and trade purposes freely of licence. The licence of the council of ministers is necessary for bigger surfaces up to 30 hectares. Besides max. 0.5% of the total area of a province may be acquired by foreigners.
Local restriction: Foreigners may acquire only in areas a real estate in which a certified land-use plan or local land-use plan gives. Except these places a real estate acquisition through foreigner is not allowed. In addition, an acquisition is excluded in military locking – and security zones. An exemption confirmation of the responsible military management can under certain circumstances be necessary for the transference in the land registry.
Exception: Acquisition through heirship. The abovementioned restrictions find no application with the real estate which was transferred in the way of an heirship on citizens by states with which Turkey stands in the mutuality relation.
III. Liquidation of a real estate purchase in Turkey
According to Turkish right the conveyancing on corresponding declaration of intention of the seller and buyer is carried out exclusively in the land registry. The contract negotiation is dealt with only in the land registry.
In contrast to other many countries notaries are not involved in the liquidation of conveyancing. The parties or their sales representatives (authorised by notarial authority) must deal with the transference and other audits which is carried out in Germany predominantly by the notary.
By the transference in the land registry a sworn in translator must be available if the foreign contracting party doesn’t speak the Turkish language. For the liquidation in the land registry personal bases and information of the foreign contracting party must be prepared in the approach.
The registration in the land register of properties (flats) cannot last with foreign buyers up to 3 months because the land registry has to request before the registration by the military management whether the concerning property is in a military catchment area.
After the transference an extract from the land register called “Tapu Senedi” is handed over to the new owner of the real estate.
In case of a real estate purchase in Turkey we recommend absolutely to take up corresponding consultation with a lawyer. Because in Turkey no notary is involved in the purchase procedure, the buyer should himself check up in own interest whether there are some tax liabilities, barriers or costs in favour of from third in the land register entry of the real estate. The consultation and assignment of an experienced Turkish sollicitor can protect you also to other risks by salemen and brokers etc.
IV. Taxes by the real estate purchase in Turkey
With conveyancing of a real estate in Turkey seller and buyers pay in each case 0.15% (15 of thousandths) of the purchase amount as a land register fee. Then the buyer must announce the acquisition of the real estate of the responsible city administration and the tax office within 3 months after the transference. It is calculated yearly a real estate-tax.