Clarifications about the new mechanism for foreigners buying real estate in Turkey

Imtilak Real Estate answers common questions about the mandatory foreign exchange when foreigners buy real estate in Turkey.

Clarifications about the new mechanism for foreigners buying real estate in Turkey
3,207
2022-01-28 Last update 2022-03-29

Clarifications about the new mechanism for foreigners buying real estate in Turkey

The obligation to sell foreign currency for the purchase of property in Turkey has been established by foreign nationals to the Central Bank of Turkey.

This obligation was made following Article 13 of the circular relating to the movement of capital, the executive regulations relating to the application of the Turkish Nationality Law, and the instructions issued by the Central Bank of Turkey regarding the applications of selling currency to it in foreigners' purchases of real estate.

Table Of Contents

Currency purchase document

According to the text of the circular: in the transactions of selling real estate to foreigners, the price of the property to be purchased in foreign currency must be sold to the Central Bank of Turkey, through one of the banks operating in the banking sector in Turkey.

A document evidencing the purchase of currencies by the Central Bank, regulated by the concerned bank, and submitted to the Title Deed Directorate, must be submitted before starting the transactions of transferring ownership of the property to the foreign citizen.

This obligation came into force on January 24, 2022, according to which the foreigner was obligated to present a document proving the Central Bank's purchase of the property price in foreign currencies, which was called Döviz Alım Belgesi, which means in Arabic the currency purchase document.

Here, we provide you with the answers to common questions related to the process of implementing the said obligation:

1. Is there an obligation to exchange currencies in real estate purchases for foreign nationals?

The obligation to sell foreign currency for the purchase of the real estate by foreign citizens to the Central Bank of Turkey was established, according to Article 13 of the circular regarding the movement of capital, the executive regulations related to the implementation of the Turkish Nationality Law, and the instructions issued by the Central Bank of Turkey, related to the applications of selling currencies to it in purchases foreigners for real estate.

Accordingly, every foreign citizen is obligated to pay the payments related to the process of buying a property in Turkey in foreign currencies, as these currencies are paid by the person concerned to one of the banks operating in Turkey, and the bank, in turn, sells them to the Central Bank of Turkey and pays their value in the Turkish lira to the person concerned, before starting With the transactions of transferring ownership of the real estate in the relevant Title Deed Department.

Buying a property in Turkey

2. What are the entities to which foreign exchange must be exchanged?

Foreign currencies are exchanged exclusively through the Central Bank of Turkey, by selling them to one of the banks operating in the banking sector in Turkey, and accordingly, the exchange of currencies through official or unofficial exchange offices makes them illegal for use in real estate purchases.

3. How much foreign currency do I have to exchange?

Under Article 3 of the Circular on Capital Movement issued by the Central Bank of Turkey: an amount of foreign currency should be exchanged corresponding to the full price of the property to be purchased.

4. What is the currency purchase document “Döviz Alım Belgesi”?

It is a document that proves the Central Bank of Turkey's purchase of a certain amount of foreign currency from a bank operating in Turkey, for the benefit of a foreign citizen who wants to buy a property in Turkey, and it is submitted by the person concerned to the Land Registry, before starting property purchase transactions.

شقق للبيع بالتقسيط انجليزي شقق للبيع بالتقسيط انجليزي

5. What is the minimum information that the currency purchase document must include for it to be accepted by the Title Deed Directorate?

The document must include at least: the name of the person in whose favor the currency was exchanged, last name, passport number, or the identification number of the foreigner issued by the Turkish Republic, and the value of the amount of foreign currency sold in the US dollars (and its value in Turkish lira will be mainly present in the document). In addition to a written declaration stating that the said currency exchange transaction was carried out under Article 13 of the circular relating to the movement of capital.

6. Does the foreign buyer have to exchange the currency from the concerned bank in person?

There is no objection to obliging the foreigner to carry out the disposal process in person. The buyer, seller, or whoever represents the property can do so under a legal agency.

7. Can I exchange currency after purchase transactions?

Currency exchange can never be done after the purchase transactions that take place in the Title Deed Department. Rather, the currency must be exchanged, and the currency purchase document must be submitted to the relevant Title Deed Department before starting the purchase transactions.

8. Does the currency exchange obligation apply to Turkish citizenship transactions in exchange for real estate?

The exchange of currency by selling it to the Central Bank of Turkey by one of the banks operating in Turkey is mandatory in all transactions of selling real estate to foreigners, whether the purchase is for the purpose of obtaining Turkish citizenship or not.

the Central Bank of Turkey

9. In citizenship transactions in exchange for real estate (conformity document transactions), does he require a document other than the currency purchase document?

In Turkish citizenship transactions in exchange for real estate (conformity document transactions), the relevant Title Deed Department requests a currency purchase document, in addition to a bank receipt proving the transfer of the disbursed amount to the property seller's account.

Presenting a currency purchase document is mandatory to the Title Deed Directorate, before starting the sale transactions in the Title Deed. As for the payment receipt for the price of the property (transferring the price of the property from the buyer to the seller), it can be submitted with the currency sale document, and it can also be submitted later, provided that this is done before preparing the conformity document.

10. Is it possible to transfer the price of the property in currencies to the seller’s account before it is disposed of by the bank?

It is possible to transfer the price of the property in currencies to the seller’s account so that the seller can exchange it through the bank, but there is an important point in this matter, which is the issuance of the currency sale document before starting to conduct sales transactions in the Title Deed for example:

In the event that the foreigner (GC) pays the price of the independent real estate part No. 5 in Sector No. 1 and Island 101 in the Çamlik neighborhood of Didim district in Aydin State in Turkey, the price of which is $270,000, through a wire transfer from his bank account outside Turkey to the dollar account of Ziraat Bank, Didim branch of the real estate seller, the Turkish citizen (BZ). The property owner must sell this amount to a Turkish bank and get the currency sale document for the benefit of the aforementioned foreign citizen. He must also get a certified bank receipt for the transfer sent by the foreign citizen, and submit them together to the Title Deed Department to complete the property sale transactions.

In other words, the price of the property can be paid in an aforementioned way, but that makes the payment receipt a priority with the currency sale document.

Turkish citizenship in exchange for a property

11. Does the obligation to sell currencies apply to the payments that were made prior to the entry into force of the decision?

Receipts for payments made prior to the entry into force of the decision will have legal validity in sales transactions, and it is not necessary to produce a currency sale document for these payments.

However, a certified bank receipt evidencing the transfer of these payments must be submitted. Payments made by hand or by other methods are not accepted in sales transactions.

12. How is the assessment of bank access to payments prior to the date of implementation of the decision? How is its value calculated to be disclosed to the Title Deed Department?

Since the payments that were made before the date of implementation of the decision cannot be extracted from a special currency sale document, only a certified bank receipt proving its transfer from the buyer’s account to the seller’s account is sufficient.

In this case, the price of the property specified in the title deed should not be less than the amount transferred by the seller, and in the event that payment is made in foreign currencies, its value is calculated at the exchange rate in the Central Bank a day before the date of getting the payment receipt.

For example, a documented payment with a bank receipt was made of the property price in the amount of 1,000,000 (one million TL) on 11-11-2021, and 500,000 TL, also documented on 15-12-2021, the price of the property in the bond will be 1,500,000 TL.

But in the event of paying $100,000 documented with a bank receipt from the price of the property on 11-11-2021 and $50,000 documented with a bank receipt on 12-15-2021, the first payment will be calculated at the exchange rate of 9.8135 (which is the exchange rate of the Central Bank on 10-11-2021) for the first payment amounting to 981,350 TL.

As for the second payment, it will be calculated at the exchange rate of 14.2213 (which is the exchange rate of the Central Bank on 12-14-2021), so that the value of the second payment will be 711,065 TL, for a total of 1,692,415 TL.

13. Will the value of the property in Turkish lira recorded in the currency purchase document be the basis for the title deed expenses?

According to the circular, the value of the property in Turkish lira recorded in the currency purchase document will be based on the title deed expenses.

14. Do these provisions apply to Title Deed registration requests that we submitted before January 24, 2022?

The obligation mentioned in the decision will not be applied to applications submitted to the Title Deed before the mentioned date, and their transactions have not yet begun but will be completed in accordance with the laws that prevailed at the time of submitting the application.

 

Edited by Imtilak Real Estate©

Reference: General Directorate of Land Registry and Land Survey

Did you like this topic? You can share it with your friends now.

More from Imtilak
A new center in Baghdad to grant entry visas to Turkey

The Turkish Embassy in Baghdad opened a new visa center for Iraqis to enter Turkey, with the aim of facilitating entry p...

2022-01-20
1,648
An official decision resolves the controversy over the nationalities prohibited from owning property in Turkey

Follow through Imtilak Real Estate the latest amendments issued by the Presidency of the Foreigners Department in Turkey...

2021-11-18
8,152

Privacy Policy

We use cookies to offer you the best possible user experience, learn more about how to use them