Turkish real estate market for foreign buyers is quite young, but purchasing property in Turkey is becoming increasingly popular with holiday home owners and investors around the globe. First law allowing foreign citizens to purchase Turkish real estate was adopted in 1934 and some amendments were subsequently implemented to facilitate the acquisition. And now Turkish real estate market is the undisputed leader according to temps of developing among the other countries of Mediterranean resorts. The reason is obvious; Turkey is a special world absorbed the history and culture of both East and West. The special beauty and attraction has the famous resort town of Kemer. Kemer – such a picturesque place on our planet! Fresh mountain air, greenery, the Mediterranean Sea, and of course the sun 300 days during a year. Paradise which people can only dream of? You can make the dreams come true and make this paradise your home! Buying real estate in Kemer you guarantee yourself this opportunity.
Turkey was defined as a prospective direction for money investment into real estate. Turkish government is focused on the tourism industry developing and according to their plans in 2020 income from tourism will be already 15% of GDP. Powerful and rapid development of infrastructure (construction of new roads and major airports, new hotels, parks, shopping malls, entertainment areas) makes Turkish real estate market more and more popular. The fact that Turkey has got an incredible popularity because of its fast developing tourism industry stimulates a huge demand for Turkish real estate. For example, in 2008, 73,103 foreign individuals and companies bought property in Turkey in the amount of 38,623,661 m2 that amounted to $ 10, 4 billion foreign investments. And there are reasons for such a high popularity:
- Ideal climatic conditions
- Excellent opportunities for recreation all year round (diving, surfing, ski resorts, golf fields of international level
- 8000 km long coastline; beach awarded with the International blue flag for clean coast water
- year-round flights from most countries in the world
- developed infrastructure
- wide range of real estate
- price\ quality ratio is one of the best in the world in real estate sphere
- low taxes
- availability of real estate property gives the right to obtain a residence permit and later, if desired, citizenship
Registration of real estate transactions
Real estate purchasing by foreigners in Turkey
According to Article 35 of Property Act №2644 as amended by Article 19 of the Act № 4916 dated by 03.07.2003: «Foreign individuals and trading companies, forming a legal entity established abroad, and in accordance with the laws of their country, have the right to purchase real property located within the borders of the Turkish Republic».
But the initial factor of the law application is the principle of reciprocity, according to which a foreign state recognizes the right of the Turkish Republic citizens and Turkish traders at the same level as for their own citizens or commercial companies, forming a legal entity and set up in accordance with national legislation. Thus, the compliance of the reciprocity principle of the real property purchasing between Turkey and the foreign state indicates the existence of a legal framework and mechanism for its practical implementation.
In this regard, buying procedure of turkish real estate for foreign citizens or companies depends on the terms of its acquisition in that state for Turkish citizens or trade companies, and depands on the existence of legally prescribed rights, as well as the mechanism for their implementation. Decisions on applications for acquisition of real property by citizens of the states that are not included in the list of countries that adhere to the reciprocity principle (112 countries) and the list of countries that do not comply with this principle are made upon request the General Directorate of Real Estate.
But there are exceptions to the principle of reciprocity.
Upon acquisition of real estate by foreign individuals the conditions of reciprocity are not required for the following categories of citizens:
- Persons without citizenship
- Persons with refugee status (in accordance with the law №359 of 26.08.1961 Turkey acceded to the Agreement on Legal Status of Refugees of 28.07.1951 according to Article 7 / 2 for persons with refugee status and residence in the state for 3 years, the principle of reciprocity does not apply.)
- Foreign individuals and companies engaged in investing in tourism (According to Art. 8 / E for the Promotion of Tourism Act № 2634, when these individuals perchase properties in tourist areas and centers the principle of reciprocity and other legal restrictions do not apply.)
Buying real estate in Turkey, foreign citizens must comply with the following legal limitations:
1. Restrictions on the area: the total area of real estate, owned by foreign person on the right of property, or received for use on the basis of a limited property right, can not be more than 2.5 (25 thousand square meters) across Turkey. However, the law provides that the Council of Ministers may raise that level up to 30 hectares. A new law also introduced additional restrictions on the area: in each area not more than 0,5% of the total area of this region may belong to foreign individuals.
2. Restrictions on the type of property: on the foreign buyer may be issued only that real estate, which registered in the land registry as housing or a job place or is intended to be used for those purposes, according to local architectural plans.
3. The condition of the reciprocity principle: a foreigner can buy property in Turkey only according to the conditions if the country he\she is the citizen of, legally and factually allow Turkish citizens to acquire property within its territory at the same terms.
4. Legal restrictions on the military exclusion zones and security zones, as well as areas of strategic importance due to its characteristics of energy, agriculture, culture, etc.
5. Restrictions for legal entities: real estate can be purchased only by commercial organizations; various foundations, associations, societies, cooperatives, the state can not acquire real estate in Turkey.
Buying real estate in Turkey by foreign entities, they are subject to the same restrictions as individuals.
Acquisition of real estate by companies with foreign capital participation
The notion of «company with foreign capital participation» is often a substitute for the notion of «foreign company». But it should be noted that companies with foreign capital are established in Turkey according to Turkish Commercial Code and are registered in the commercial register of Turkey. Thus, these companies operate under the legal rules of Turkey. Their capital, partially or completely owned by foreign individuals or entities. Foreign status of holders are not attached to the status of foreign companies, as well as to distinguish between «nationality» of the company and nationality of the shareholders.
Since 17 June 2003 was implemented the Act № 4875 «On foreign direct investment», that is directed to attract and increase foreign investment, protect the rights of foreign investors, the transition from the permits and approvals to the principle of information and advice. In accordance with the Act in regard to foreign investors, the same regulations, as for the local investors are used; canceled the order permission to invest, to create a company, etc. Legal entities created by partially or entirely based on foreign capital, have rights, equal rights as for citizens of Turkey.
The procedure of real estate buying begins with the conclusion of the contract that provides you a right of the selected object and prevents the possibility of its sale to another buyer.
In the contract must be written the owner and buyer of real estate, the value of the deposit, the payment schedule for the remaining amount, as well as additional terms of the transaction.
After signing the contract you pay a deposit (___% of the value of the property-value specified on a particular object). After this at the Police Department must be made a residence permit. A copy of the passport, 4 color photographs 3,5 x 4,5 cm, and the names of your parents will be required for this. These documents are sent to the local State Cadastral Administration. To get TAPU (Certificate of title) must submit a copy of the passport and photos to the Cadastral Office, which in turn make a formal request to the Eagian military Office to check whether the real estate is in the millitary zone or security zone. After receiving permission, you can get Tapu. Duration of this procedure, approximately 3 months, in some cases, the procedure may be slightly longer (depending on the number of requests). To get TAPU your personal presence will be required. When buying real estate by foreigners who do not speak the Turkish language, while registering a transaction, the presence of an official interpreter prescribed by law. Only after the assurances you have understood the text of the treaty the contract will be registrated. The fact of the transfer of ownership is registered in the cadastral book, then you get TAPU.
In Turkey, there is a cover system of real property registration, that means that only the state authorities on behalf of Cadastral Office registrate the documents of ownership, ensuring at the state level, the purity and legitimacy of the transaction. Notaries do not have the right to register the transaction of sale of real estate in Turkey. Condition of real property, including encumbrances, mortgages, etc. registrated in the Cadastral Office.
Expenditures for the purchase and operation of real estate in Turkey. When you purchase once you pay tax at a rate of 3% of the cadastral value of real estate. Payment is made in the public bank to the goverment. The remaining non-recurring costs associated with registration of property rights (the services of a translator, notarization, the various contributions), as a rule do not exceed 300-500 euro. The annual cost of maintaining a property in Turkey are quite small: for tax for living fund is 0,2% of the declared value of the object. (may be paid in two equal parts in March / April and November). In addition, tax on waste (the amount of the tax is determined by the local government depending on the type of building and its position – about 50 euro per year). The cost of utilities is not great. Water and electricity is paid by the meter: water ~ $ 1.8 cubic meters, electricity ~ $ 0.13 kWh, including taxes. Also, the annual costs include mandatory insurance against earthquakes (approximately 10% of the voluntary insurance that is about 150-250).