Buying property in Turkey




*UPDATE* 02/May/2008

The Constitutional Court of the Republic of Turkey (CCRT), by its decision of 11 April 2007 has cancelled some provisions of the Title Deeds Act No:2644, regarding property sales to the foreign nationals. The CCRT's decision was published in the Official Gazette on 16 January 2008 and came into effect three months later on 16 April, 2008.

Therefore due to the ongoing enactment of legislation regarding the acquisition of property by foreign national individuals and foreign companies, the Directorate General of Land Registry and Cadastre has issued a Circular stating that the processing of applications for land and property sale to foreign nationals and foreign companies has been suspended until further notice.

A bill has been prepared by the Turkish Government, taking into account the CCRT's standpoints, Turkey's international/bi-lateral agreements, and is about to be submitted to the Parliament. When the new act is enacted, foreign nationals will keep buying property in Turkey in line with the new act.

According to the Constitution, the acquired rights cannot be seized by anybody. Thus, the ownership rights of a foreign national who already owns a property (or who will own a property after the enactment of the new bill) in Turkey will be preserved by the Constitution.

Rules:

Citizens and commercial corporate entities of the countries with which reciprocity agreements have been signed and companies established in line with Foreign Direct Investment Law No. 4875 in Turkey may purchase a real estate in Turkey on their own names provided that the property is not located in military and security zones. The acquired property may be resold or rented out and the proceeds of the sale or the rental income may be transferred out of Turkey freely.

Procedure:

The sale procedure for foreigners is the same as Turkish citizens except a search for the abovementioned military and security zones restriction. Once a sale agreed with the owner, an application has to be made to the local Land Registry Office. The Land Registry Office then carries out a search for the abovementioned restriction through correspondence with the military authorities in the area. As soon as the search is completed, the Land Registry Office then transfers the title and issues the new deed.

Taxes:

Each of buyer and seller is to pay real estate sale-and-acquisition levy of 1.5 per cent, based on the declared value of the asset. There is also a real estate tax, again, based on the declared value of the asset and collected by the local municipalities, at the rate of 0.1 per cent for residential properties and 0.3 per cent for building land annually. One fourth of the tax value (minimum YTL 2,500) of newly built residential properties is exempt from the municipal real estate tax for the first five years.

For further information regarding buying property in Turkey please follow the link to the Economic Counsellor's website

www.turkisheconomy.org.uk