Ownership of Foreigners in Turkey | Notable Facilities Come into Effect

The Presidency of the Directorate General of Land Registry and Cadastre in Turkey has issued a circular introducing new amendments to real estate investment transactions for foreigners in Turkey.

The circular numbered (2024/4) dated 13.06.2024, includes legal amendments to the laws regulating real estate investment for foreigners and the executive regulation related to the application of the Turkish citizenship law, which is the legal framework for real estate investment granting the right to apply for Turkish citizenship.

The new decisions have revealed further facilitation related to real estate appraisal, especially for properties owned by foreigners, which can be addressed within the following axes:

Real estate appraisal is no longer mandatory in all transactions!

One of the most significant changes in the new amendment is the removal of the mandatory real estate appraisal report for foreign real estate purchases, except for purchases made with the aim of obtaining Turkish citizenship.

It is known that the real estate appraisal report is a report prepared by specialized companies accredited by the Directorate General of Land Registry and Cadastre to determine the market value of the property, and preparing this report was a mandatory legal requirement in all real estate purchase transactions for foreigners in Turkey.

According to the new amendment, the obligation for the mentioned real estate appraisal report is now limited to real estate purchase transactions made with the aim of obtaining Turkish citizenship, to verify that the market value of the property reaches the qualifying value for applying for Turkish citizenship, which is 400 thousand dollars.

An effective solution to the issue of property value discrepancy between financial and legal documents

On the other hand, the new amendment provided a solution to the issue of the discrepancy in the value of the property purchased by the foreigner and achieving the qualifying value for applying for Turkish citizenship through real estate investment, which is 400 thousand dollars.

According to the new amendment, if the official sale deed and the currency purchase document achieve the qualifying value for citizenship and this value is not achieved in the real estate appraisal report, the matter is referred to the Presidency of Foreign Affairs in the Directorate General of Land Registry and Cadastre.

According to the amendment, the Foreign Affairs Department will have the final decision in such cases and will have the initiative to grant the eligibility decision for the property for Turkish citizenship in transactions where the difference between the financial documents is less than 15%.

The currency purchase document is the basis for evaluation in other purchase transactions

Regarding deferred sales and installment sales, the new amendment approved the property's price according to the amount specified in the currency purchase document (Döviz Alım Belgesi), which is a document showing the sale of foreign currency to one of the banks operating in Turkey to be sold to the central bank before the real estate purchase transaction is completed.

Accordingly, the property price will be calculated on the date of extracting the currency purchase document in the appraisal reports issued after the sale contracts / promise of sale contracts are concluded, and the value will be fixed in the appraisal report according to the amount specified in the currency purchase document on the date of the first installment payment in installment property purchase transactions.

Edited by: Emlak Konut©