Search
Close this search box.
Search
Close this search box.

,

December 21, 2023

Implementation of the 24 January 2022 Amendment in the Procedure for Foreigners to Acquire Real Estate in Turkey

Implementation of the 24 January 2022 Amendment in the Procedure for Foreigners to Acquire Real Estate in Turkey

I. Preamble

This article explains the changes in the process and conditions regarding the acquisition of real estate by foreigners in the Republic of Turkey, with the Circulars issued within the framework of the “Regulation Amending the Regulation on the Implementation of the Turkish Citizenship Law” published in the Official Gazette dated 6 January 2022 and numbered 31711, and the changes that began to be implemented on 24 January 2022.

The main purpose of this guide is to provide up-to-date information on how foreigners can acquire real estate in the Republic of Turkey and how they can acquire Turkish citizenship with such an investment, within the framework of the changes brought by the Presidential Decision No. 5072.

For a detailed explanation of the implementation before the change and the procedures that did not change, see: https://www.kilinclaw.com.tr/en/acquisition-of-the-real-estate-by-foreigners-in-turkey/

II. Legal Grounds

Implementation of the amendment brought within the scope of the “Regulation Amending the Regulation on the Implementation of the Turkish Citizenship Law”, which was published in the Official Gazette dated 6 January 2022 and numbered 31711; It has been clarified by the amendment made in the “Capital Movements Circular” of the Central Bank of the Republic of Turkey, the 2022/1 Circular of the General Directorate of Land Registry and Cadastre and the Supplementary Guide to the Circular No 2019/5.

III. Situation Before The Amendment

After the buyer determines the real estate that wanted to buy, it is recommended, although not mandatory, to issue a preliminary contract regulating the rights and obligations of the buyer and the seller. With this preliminary contract, issues such as the seller being obliged to perform the title deed transactions and the cancellation of the sale or the elimination of the damages of the parties in the event that the sale does not take place for a reason beyond the will of the parties will be clarified in a binding manner.

The preliminary appointment can be scheduled from the e-government portal (http://turkiye.gov.tr) or the online appointment system of the Land Registry Directorate (https://randevu.tkgm.gov.tr/)  or calling “181” or “+90 (312) 593 99 00” (from abroad).

The sales process was carried out by obtaining the following documents and information.

  1. Title Deed (to be provided by the seller),
  2. Photocopy of the Buyer’s Passport (with notarized translation),
  3. “Current Value Statement of the Property” (provided by the seller from the relevant municipality),
  4. Real Estate Valuation Report (obligatory to be obtained from authorized institutions – The value of the real estate is $250,000 or more is mandatory for naturalization.),
  5. Compulsory Earthquake Insurance Policy (to be provided by the seller),
  6. 1 (one) Seller’s Photograph / 2 (two) Buyer’s Photograph (6×4 size and must have been taken within the last 6 months),
  7. Identity Information Declaration Form (can be filled by us on behalf of the client),
  8. If the transaction will be carried out with a power of attorney, the power of attorney containing the authority to purchase real estate.
  9. Original receipt (In case of real estate acquisition for the purpose of obtaining Turkish citizenship, it is necessary to prove that at least $250,000 has been transferred from the buyer to the seller.)

IV. Novelties After The Change

Article 13, titled “Real Estates”, of the Capital Movements Circular prepared by the Central Bank of the Republic of Turkey contains the following provisions;

“(1) It is free for banks to transfer abroad the net amount of income and sales costs of real estate and real rights related to real estate purchased or owned by non-residents in Turkey, after deducting taxes and similar liabilities.

(2) Payment obligations of real estate purchased in Turkey by persons who do not have citizenship ties with the Republic of Turkey are fulfilled in foreign currency. This foreign currency is sold to a bank, and by the bank to the Central Bank, by stating the reason before the title deed transactions. Payment is made in Turkish lira to relevant persons. The procedures and principles regarding the implementation of this paragraph shall be determined by the Central Bank.

(3) Relevant persons are obliged to submit the Foreign Currency Purchase Document to the land registry, which proves that the foreign currency with the sales price has been sold to a bank in the application for title deed transactions. The Turkish lira amount registered in the Foreign Exchange Purchase Document is declared to the title deed administration as the sales price by the relevant parties.

(4) Within the scope of the second paragraph, it is possible to sell foreign currency to banks only by the buyer, seller, their proxies or representatives of the relevant real estate.

(5) As a minimum, in the explanation part of the Foreign Exchange Purchase Documents to be issued by the banks regarding the foreign exchange sales to be made within the scope of the second paragraph; It is obligatory to include the name, surname, passport number or Foreigner Identity Number of the person on whose behalf the currency is exchanged, the US dollar equivalent of the foreign currency purchased, and a statement stating that this transaction was carried out within the scope of this article.

In this context, in the acquisition of real estate by foreign real persons, the sale price must be sold to a bank to be sold to the Central Bank in USD or its equivalent in foreign currency, and the ” Foreign Currency Purchase Document” to be issued by the bank must be submitted to the Land Registry Directorate before the sale transaction. It can be done by the buyer, seller, their proxies or representatives of the real estate. The following information must be included in the Foreign Exchange Purchase Certificate:

  • Name and surname of the person on whose behalf the currency was exchanged,
  • Passport number or foreigner identification number of the person on whose behalf the currency was exchanged,
  • US dollar value or US dollar equivalent of the currency exchanged,
  • TL equivalent of the exchanged foreign currency,
  • A statement stating that this transaction was carried out within the scope of “Article 13 of the Capital Movements Circular”.

It is obligatory to submit the Foreign Currency Purchase Document containing this information to the land registry office.

In the 3rd paragraph of the 13th article of the Capital Movements Circular of the Central Bank of the Republic of Turkey, “The Turkish lira amount registered in the foreign currency purchase document is declared to the title deed administration as the sales price.” provision is included. In this context, the following points should be considered when issuing the official deed (sales contract) to be drawn up at the land registry office:

  • It should be issued on the basis of the TL value shown in the Foreign Currency Purchase Document.
  • A payment item (commission, expense, etc.) other than the immovable sales contract or immovable promise of sale contract price should not be included in the foreign currency amount specified in the Foreign Currency Purchase Document.

Since the sale price in the official deed by the land registry office will be the value in the Foreign Currency Purchase Document, special attention should be paid to the foreign currency sales amount so that the taxes paid at the time of sale do not exceed what they should be, and in case of future disputes, it does not create a presumption against the buyer.

 

On the other hand, in cases where the payments were started before the change, but the transfer will be made after the change, and the sales price is deposited to the account of the buyer before the date of publication of the Circular No. 2022/1, 21.01.2022, if this situation is documented with an approved bank receipt, a separate Foreign Currency Purchase Certificate will not be required.

However, in this case, the sales value to be specified in the official deed should not be lower than the value deposited in the seller’s account, and in cases where a foreign currency payment is made to the seller’s account, the Turkish Lira value to be found at the effective selling rate of the Central Bank prior to the issue of the receipt. In other words, the Turkish Lira prices in the receipts of all payments made to the seller will be calculated separately over the Central Bank’s effective selling rate prior to the receipt date, and the Turkish Lira prices will be collected and recorded in the official deed as sales price.

In addition, if a price higher than the sales price found as a result of the calculation made with the above method is shown as the sales value and the transfer is made after 21.01.2022, the Foreign Currency Purchase Document indicating that the foreign currency has been exchanged to be sold to the Central Bank for the amount of the difference will have to be submitted to the land registry administration during the transfer.

V. Change In The Application Status For Turkish Citizenship

The above-mentioned change will not create a general change in citizenship acquisition procedures. Only the Foreign Exchange Purchase Certificate, which is required to be submitted, has now been added to the documents required for real estate acquisition and citizenship acquisition. In this sense we want to remind, foreigners who purchase real estate worth at least USD 250,000 can apply for Turkish citizenship, provided that an annotation stating that the real estate will not be sold for three years is added to the title deed, and that their spouse and children under the age of 18 have also the right to apply for Turkish citizenship, and all will acquire Turkish citizenship upon the approval of the application, following the procedures for issuing a Turkish passport and for obtaining identity and fingerprint registration should continue in Turkey.

 

Best Regards,

Kılınç Law & Consulting

Authors

Levent Lezgin Kılınç

Levent Lezgin Kılınç

Founding Partner