Discover how foreign investors can acquire real estate in Turkey and gain citizenship. Learn the legal process, limitations, and benefits.
In recent years, Turkey has become a highly attractive investment destination for foreign investors. Turkey’s strategic geographical location, rich cultural heritage, growing economy, and high quality of life are behind this attraction.
Turkey offers a variety of opportunities for both individual and institutional investors, and real estate investment is one of the most important of these opportunities. In addition, the opportunity to acquire real estate in Turkey and apply for Turkish citizenship offers a significant advantage for foreign investors.
Real Estate Acquisition Process For Foreigners in Turkey
Although the Republic of Turkey has granted foreign nationals the right to acquire real estate, this right is subject to certain limitations and exceptions. Amendments to the Land Registry Law No. 2644 have expanded the right of foreigners to acquire real estate and paved the way for more foreign nationals to own real estate in Turkey.
However, the right of foreigners to acquire real estate is subject to certain limitations and exceptions in order to protect Turkey’s national security. In particular, foreigners are prohibited from acquiring real estate in military exclusion zones and areas of strategic importance. These restrictions are intended to protect national security and also ensure that foreign real estate owners act in accordance with the law in their real estate acquisition processes.
The total acquisitions that foreigners may acquire on a surface area basis may not exceed ten percent (10%) of the total area of the province where private ownership is permitted, and if this limit is exceeded, foreigners are not allowed to acquire real estate. They may purchase real estate in Turkey for use as a workplace or residence. However, the total surface area of the immovable properties that a foreigner can purchase in Turkey, even in different cities, cannot exceed 30 hectares. These limitations come into play, especially when it comes to large land acquisitions.
If the land is to be used for agricultural purposes, the Ministry of Agriculture and Forestry must approve whether the land is suitable for its intended use. This approval process is important to ensure that the land is used efficiently and in line with Turkey’s agricultural policies. There may also be a legal obligation for foreign investors to start agricultural activities on the land within a certain period of time after land acquisition.
How Does The Procedure For Foreigners to Purchase Real Estate in Turkey Work?
This process does not require foreigners to have a residence permit as a prerequisite for acquiring real estate in Turkey. In addition, foreigners who purchase real estate in Turkey are granted a renewable short-term residence permit in accordance with Law No. 6458 on Foreigners and International Protection. After obtaining a residence permit, foreigners are required to prepare the necessary documents to acquire real estate in Turkey.
These documents include the land registry of the real estate or village/neighborhood, plot, parcel, building and independent section information, photo ID or passport issued by the country where the foreigner is a citizen if the transaction includes a Power of Attorney (PoA), a document regarding the representation, a document on the current market value of the real estate issued by the relevant municipality, and a compulsory earthquake insurance policy for buildings.
Title deed transfer transactions are carried out by the Land Registry Directorate, and in this process, it is obligatory to pay the title deed fee and other taxes. The sales contract is the first step to be made between the parties, and this contract covers all the conditions regarding the transfer of the real estate and the rights and obligations of the parties.
During the title deed transfer process, the real estate’s title deed registration is officially transferred to the Land Registry Directorate. The foreign investor who transfers the real estate is required to pay all relevant fees and taxes.
How is The Acquisition of Real Estate and Limited Real Rights by Foreign Legal Entities in Turkey?
In Turkey, only commercial companies established according to the laws of their own country and possessing legal personality can acquire real estate and limited property rights as foreign legal entities. However, legal entities other than such commercial companies, such as foundations and associations, do not have the right to acquire real estate and property rights.
Commercial companies established in foreign countries under the laws of their home countries and having legal personality may acquire real estate only in exceptional circumstances. This is only possible under the conditions stipulated by international agreements or special laws.
In this context, laws with special provisions include the Turkish Petroleum Law No. 6491, the Tourism Encouragement Law No. 2634, and the Industrial Zones Law No. 4737.
There is an exception regarding mortgages. There are no restrictions on mortgages to be created on immovable property in favor of foreign real and legal persons.
Can Companies With Foreign Capital Established in Turkey Acquire Real Estate and Limited Real Rights?
Legal entities established in Turkey are considered companies with foreign capital under certain conditions. These conditions include foreign investors owning fifty percent or more of the company’s shares or having the right to appoint and dismiss the majority of the board of directors.
Such companies may acquire immovable property and limited rights in rem to carry out the activities specified in their articles of association. To do so, they must first apply to the governorate where the immovable property is located.
On the other hand, if the immovable property to be acquired is located in a prohibited military zone or a military security zone, the acquisition will be subject to the permission of the General Staff. If the property is located in a special security zone, permission must be obtained from the relevant governorate.
If the application to acquire real estate is approved, the governorate will inform both the company and the Land Registry Office in writing so that the title deed can be registered.
Applications can be made directly to the Land Registry Directorate in cases such as the establishment of a mortgage, the acquisition of property by the beneficiary of a mortgage through the collection of the mortgage, the transfer of ownership due to company mergers and separations, and the transfer of limited real rights. In addition, the permission of the governorate is not required for the acquisition of immovable property in organized industrial zones, technology development zones, and free zones, transactions that are considered as loans within the scope of banking legislation, or acquisitions for the collection of receivables.
What Are The Considerations For Foreigners Acquiring Real Estate in Turkey?
Foreigners wishing to purchase real estate in Turkey should refrain from signing legally binding contracts and making payments before obtaining information about the real estate from the Land Registry Directorates without proving their interest. They are advised not to start transactions without researching the sellers and not to cooperate with individuals or organizations that cannot prove their reliability.
If any dispute arises during the buying and selling process, it is mandatory to bring the matter to the judiciary and file a lawsuit in Turkish courts. In this case, the Turkish Ministry of Foreign Affairs and foreign representations cannot intervene in the judicial process.
Can a Foreigner Inherit Real Estate Acquired by a Foreigner?
Of course, foreigners’ right to inheritance in Turkey is protected. In the event of a foreigner’s death, the real estate they own is passed to their heirs. If the heir has the right to acquire the real estate (if they are eligible in terms of nationality and if the per capita and country-wide total limitation conditions allow), the heir can keep the inherited real estate.
Otherwise, the person concerned must transfer the real estate immediately. Otherwise, the Ministry of Treasury and Finance will sell the real estate and pay the price to the heir.
What Procedure Should a Foreigner Follow to Acquire Real Estate in Turkey Through a Power of Attorney (PoA)?
If the real estate acquisition is preferred to be carried out by a third party authorized through a Power of Attorney issued abroad, the Power of Attorney must include authorization regarding the procedure to be carried out.
In addition, the Power of Attorney must be issued by the Turkish Consulates on the real estate according to their own will and issued by the competent authorities abroad who have the right to issue a Power of Attorney. The Power of Attorney must be issued in the language of the country where it is issued and must have a photograph on it.
In this process, if the country is a party to the Hague Convention, it must contain an apostille stamp. The signature certifies that a Power of Attorney is officially signed by the relevant authority, and the Turkish Consulate must certify the signature and seal of the relevant authority if a Power of Attorney is issued in a country that is not a member of the Hague Convention. The application must also include a notarized and sworn Turkish translation of the Power of Attorney that meets the required criteria.
Acquisition of Turkish Citizenship Through Real Estate Acquisition in Turkey For Foreign Investors
Foreign investors who invest in real estate in Turkey may be eligible to apply for Turkish citizenship under certain conditions. With the 2018 regulations, in order for foreign investors to apply for citizenship, the value of the real estate they acquire must be at least USD 400,000.
After the acquisition of this immovable property, an annotation stipulating that it cannot be sold for at least three (3) years is required. During this period, no transfer or sale can be made on the real estate ownership of the immovable property. This condition must be committed to the relevant authorities when applying for citizenship.
During the citizenship application process, documents such as the title deed of the immovable property, purchase documents, and the investor’s identity information must be submitted. In addition, the applicant’s criminal record, health report, and statements regarding the duration of his/her intended stay in Turkey are also evaluated. Applications are scrutinized by the Ministry of Interior of the Republic of Turkey, and if the application is approved, the investor and his/her family, if any, are entitled to Turkish citizenship. Acquisition of citizenship provides investors with the right to free movement in Turkey, the right to vote, and other Turkish citizenship rights.
What is a Valuation Report? And Why is it Necessary?
The real estate valuation report is very important in the citizenship application process. The value reflects the current value of the immovable property within the conditions specified in the report.
For example, information such as the project, zoning status, and abandonment status of the real estate is included in the section titled municipality. As a result of the research carried out in the municipality, the accuracy of the real estate’s location, whether the structure shows growth, or whether there is a demolition decision for the structure is examined in detail in this section. Therefore, the valuation report is of great importance.
The real estate appraisal report, which is requested in title deed transactions for foreigners to acquire real estate, is valid for 3 months. However, since the value of the real estate may change over time, there is no definite legal regulation regarding the validity period of the report. Unless there is a change in the physical and legal status of the property, the valuation report is generally expected to remain valid for 6 months to 1 year.
Accurate determination, research by the relevant official institutions, and accurate reporting are of utmost importance in valuation. The process of determining the value of a certain immovable property or a right attached to an immovable property in a certain period of time by using scientific methods and analyzing all factors that constitute or affect this value is called a real estate valuation report. This report can also be defined as determining the value of a certain date in an independent, impartial, and objective manner.
The real estate appraisal report should be prepared by a Capital Markets Board (CMB) licensed real estate appraiser to determine the value of the real estate. The report should include the analysis and valuation of all factors affecting the value of the real estate.
In Which Currency Should Foreigners Pay When Buying Real Estate in Turkey?
As stated in the Regulation on the Implementation of the Turkish Citizenship Law, payment can be made in US Dollars, equivalent foreign currency, or Turkish lira. If the acquisition took place before 19.09.2018, the effective selling rate of the Central Bank of the Republic of Turkey (CBRT) is taken as basis. However, for immovable property acquisitions after this date, the effective selling rate and/or the cross-currency exchange rate in favor of the claimant shall be taken into account.
Legal Support & Consultancy For Foreigners in Real Estate Acquisition and Turkish Citizenship Applications
For foreign investors, obtaining legal consultancy during the real estate acquisition process in Turkey is crucial to ensure that transactions proceed smoothly and in compliance with the law. At CKAY Law Office, we provide comprehensive guidance to our clients on real estate consultancy, title transfer procedures, taxation, and other legal obligations. This helps complete the real estate acquisition process thoroughly and minimizes potential legal issues that investors might face in the future.
The citizenship application process is detailed, and obtaining legal consultancy plays a critical role in ensuring that the application progresses smoothly and successfully. At CKAY Law Office, we offer extensive support during the application process, managing crucial steps such as obtaining necessary documents, submitting the application to the relevant authorities, and following up on the progress.
After the citizenship application is approved, it is extremely important for new citizens to be informed about their tax obligations, real estate ownership rights, and other legal procedures in Turkey. We ensure that our clients can start their lives in Turkey without issues and provide ongoing support to overcome any potential legal hurdles they may encounter.
References
- Republic of Turkey Investment Office. Real Estate and Citizenship Acquisition. Retrieved from: <https://www.invest.gov.tr/tr/investmentguide/sayfalar/acquiring-property-and-citizenship.aspx>
- Regulation on the Implementation of the Turkish Citizenship Law, September 18, 2018. Retrieved from: <https://www.resmigazete.gov.tr/eskiler/2018/09/20180919-15.pdf>
- General Directorate of Land Registry and Cadastre. Power of Attorney Documents Issued Abroad. Retrieved from: <https://www.tkgm.gov.tr/yabanci-ulkelerde-duzenlenen-vekaletnameler>
- Republic of Turkey Ministry of Foreign Affairs. Guide for Foreigners to Purchase Property in Turkey. Retrieved from: <https://www.mfa.gov.tr/yabancilar-icin-rehber.tr.mfa>
- Republic of Turkey Ministry of Interior – General Directorate of Population and Citizenship Affairs. Acquiring Turkish Citizenship. Retrieved from: <https://www.nvi.gov.tr/turk-vatandasliginin-kazanilmasi>
- Ertas, S., & Ozturk, G. Y. (n.d.). Developments in Foreigners’ Real Estate Acquisition and Current Situation in Turkey. Retrieved from <https://dergipark.org.tr/tr/download/article-file/469310>
