In this article, we will examine in detail the real estate purchase by foreigners in Turkey, and the rights they will gain in this way.
INTRODUCTION
The demand for real estate investment, which is a very functional way for foreigners who want to obtain citizenship or residence permit from Turkey, is increasing day by day. Foreign nationals have the right to purchase any kind of real estate (such as housing, workplace, land, field) in the country within the framework of the specified legal limits, but it should be kept in mind that a project must be submitted to the relevant ministry within two years for unstructured real estate.
This article, which has been prepared to guide foreign nationals in the purchase and sale of real estate and to guide them in this process, does not substitute an official consultancy service.
In order to prevent problems that may arise in this process and to finalize your transactions in the fastest way possible, it would be beneficial to seek legal advice from expert lawyers.
The Abolition of the Reciprocity Basis for Foreigners to Buy Real Estate
Article 35 of the Land Registry Law No. 2644, as amended by Law No. 6302, which entered into force in May, abolished the requirement of reciprocity for foreign real persons to buy real estate in Turkey.
The abolition of this practice has paved the way for foreigners who wish to acquire real estate in Turkey to do so, regardless of their nationality. Foreign nationals can purchase real estate in Turkey by power of attorney without the requirement of residence or citizenship, and real estate investment provides the right to obtain a residence permit or citizenship if certain conditions are met
Considerations for Real Estate Purchase by Foreigners in Turkey
The matter of the official organization of contracts and their compliance with the law should be handled meticulously. It is of great importance for the validity of the contracts involving the transfer of immovable property to be executed in accordance with the law at the notary public or the relevant directorate.
One of the issues to be considered in this process is that the necessary documents must be prepared in full before the sale transaction and the title deed fee and title deed revolving fund fee must be paid. It is also possible to prepare a “contract of promise of sale” at the notary public before the official sale. It is useful to know that the contract containing the promise of sale will be a valid document for the residence permit or citizenship application. It will be useful to review our article on Acquisition of Turkish Citizenship and its Conditions for the conditions sought for citizenship applications to be made by foreigners through investment.
It should also be kept in mind that according to the new practice of the Ministry of Interior, Directorate of Migration Management, for the real estates purchased after April 27, 2022, rental agreements will no longer be taken into consideration in residence permit applications made with real estate investment, and it will be required to purchase the real estate’s subject to the residence permit or to have an officially issued real estate sales promise contract regarding the real estate in question. In addition, the real estates in question must have a minimum value of USD 75,000 in metropolitan areas and a minimum value of USD 50,000 in non-metropolitan areas.
Legal Restrictions on Real Estate Purchases by Foreigners
Foreign nationals should be careful to check the title deed before purchasing real estate in Turkey. This is an issue that not only foreigners but also everyone who will buy real estate, and checking whether there is any annotation or mortgage on the immovable property is important not only for citizenship or residence permit but also to avoid any disputes afterwards.
Another situation to be considered during the real estate purchase by foreigners in Turkey is the market value of the real estate. If the real estate in question will be subject to citizenship or residence application, the market value, i.e., the fair value, should be determined and whether the real estate meets the conditions of the relevant application should be checked by an approved appraiser.
Foreigners who want to buy property in Turkey should not sign a contract or make a payment without having information about the title deed of the real estate they want to buy. In addition, it will be useful to check the reliability of the companies where the real estate will be purchased and to get the help of a lawyer in this regard.
In case of a dispute regarding the purchase and sale, Turkish courts will be competent and the person will have to file a lawsuit in Turkish courts. Since foreign missions cannot intervene in this process, it is possible for a foreign national who purchases real estate in Turkey to be involved in the process through a lawyer or by being personally present in Turkish territory.
Limitations for Foreign Persons
It is important to determine that the real estate to be purchased is not located within the security zone. The sale of a real estate in a security zone to foreign nationals is not approved by the Turkish authorities.
Foreign nationals who will purchase real estate must comply with the conditions to be determined by the relevant Ministerial Board. Foreigners whose criminal records in the country of residence and citizenship will pose a problem for the security of the country and they will not be able to purchase real estate in Turkey.
In addition, the suitability of the sale of immovable properties that are in the nature of a protected area or agricultural land to foreign nationals is also subject to the permission of the relevant ministries.
For purchased unstructured immovable properties (such as land, fields, etc.), a project appropriate to the nature of the real estate must be submitted to the relevant ministry for approval within two years.
In addition, it is stated in the Law that the surface area of the immovables to be purchased by foreign real persons cannot exceed 10% of the surface area of the district where the immovable is located, and cannot exceed thirty hectares throughout Turkey. As an exception to this situation, only the Ministerial Board can increase the amount individually.
Limitations for Legal Entities Located in a Foreign Country
The acquisition of real estate by foreign companies is framed by special legal provisions. These laws are limited to the legislation of Petroleum, Tourism and Industrial zones, and rights are granted to foreigners for commercial companies. This right is subject to the condition that the foreign capital company obtains permission from the governorship and an application must be made in this regard.
The acquisition of real estate by commercial companies with foreign capital and legal personality established in accordance with the laws of their own country will be determined by the president according to the interests of the country.
Companies with foreign capital are required to submit a “certificate of authorization” showing the company’s authorities and the form of representation in their applications to purchase real estate. The authorization certificate must clearly include the authorization to acquire real estate and the identity information of the company officials and must be dated the year of the transaction.
Immovables Acquired by Foreigners from Turkey through Inheritance
The rights of foreigners who are heirs to acquire real estate in Turkey by inheritance are protected. However, the conditions in Article 35 of the Land Registry Law also apply to immovable properties acquired by inheritance, and real estates that do not comply with the existing restrictions will be requested to be liquidated, and if not liquidated, the relevant Ministry will pay the price of the immovable property to the rightful owner.
Contracts of Promise of Sale of Immovable Property
As stated in Article 29 of the Code of Obligations No. 6098 under the heading “Preliminary Agreement”, “Agreements regarding the future conclusion of a contract are valid. Except for the exceptions stipulated by law, the validity of the preliminary agreement depends on the form of the future agreement.”
This provision makes it possible and valid to conclude a preliminary agreement for a future contract. Pursuant to this article, which also covers sales contracts, the validity of the preliminary agreement depends on the compliance with the formal requirements of the actual contract.
It is clearly stated in Article 237/2 of the Turkish Code of Obligations that the Contract of Promise for Sale of Immovable Property (Real Estate Sales Promise Contract) must be made in official written form.
In the future, if one of the two parties refrains from making the actual sales contract, it will be obliged to realize the sale promised by the judiciary in the lawsuit to be filed based on the sales promise contract.”
CONCLUSION
It is very important that the Contract of Promise of Sale of Immovable Property is made in an official manner, and with the preliminary contract, citizenship or residence permit procedures can be started before the title deed of the immovable property is allocated to the foreign national.
In addition, the title deed procedures to be carried out during this whole process, the reports to be obtained and the necessary certificates of conformity to be obtained from the ministries are very important, and it will be useful to follow the process by a lawyer who is an expert in this field in order to avoid problems in your citizenship or residence permit transactions when you buy a real estate that meets the necessary conditions.
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Juriste Baran İSTANBULLU
Att. Bilgehan DACİK
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