PURCHASING REAL ESTATE IN TURKEY

It is known that there is an increasing trend in purchasing real estates in Turkey, and so plenty of foreigners are rushing into Turkey in order to buy an estate.

At first, European foreigners tended purchasing real estates in Turkey, however GCC region citizens are additionally eager to buy estates recently because of the cultural similarities and developing social dialogues. However and unfortunately contrary to the demands from Europe, some problems are observed on the demands coming from GCC region due to the inefficient agents’ lack of legislation knowledge.

Therefore, we thought that it would be beneficial to specify the important issues for our dearest readers who are eager to buy estates in Turkey.

LEGAL INFRASTRUCTURE AND OTHER PROMINENT DETAILS

According to the recent amendment, reciprocity is no more a condition for the foreign natural entities. The citizens of the countries that are defined by the Cabinet can buy houses, offices, lands and fields, etc. within the frame of significant rules. However since some restriction due to the strategic realities are in force, it is better for foreign citizens to get information from Turkish Republic Embassies/Consulates or demand support from competent firms.

In order the real estate transferring to be valid according to the regulations, all the purchasing operations must be done at the Land Registry Office with an official deed and registry where the real estate is.

Therefore, only “Sales Commitment Agreement” or “External Sales Contract” before a public notary are not enough for property ownership. The legal ownership to the property do not pass with these kinds of agreements or contracts. Thus, the buyer should be attentive for purchasing operations. On the other hand, real estate ownership for foreign legal entities necessitates different conditions such as; Property ownership for foreign legal entities is regulated in accordance with the Article 35 of the Land Registry Law no. 2644. Foreign legal entity companies established in accordance to their relevant laws can own properties with limited rem rights and within the framework of special laws such as Turkish Petroleum Law no. 6491, Tourism Encouragement Law no. 2634, and Industrial Zones Law No. 4737. In addition, legal entities such as charitable foundations, associations, etc. are not permitted to have limited rem rights.

Acquisition of Property by foreign capital companies established in Turkey necessitates some conditions such as; If the foreign investors hold 50% or more share of the company individually or collectively and/or they do not hold any share of the company but have a right to assign or remove the managers on condition that the company has a legal personality in Turkey, they could buy property in Turkey in accordance with Article 36 of Land Registry Law No. 2644 and the “decree on Acquisition of Property and Limited in Rem Rights by companies and corporations within the context of Article 36 of Land Registry Law No. 2644”, dated 16.08.2012. The land Registry General Directorate has published a circular No. 2012/13 (1735) on “acquisition of property and limited in rem rights by companies with foreign capitals” Within this context, it is so crucial for legal and/or natural entities to examine the related legislations and apply to an expert agent in any circumstances. Since the subject is so detailed, it will be better to specify in articles below:

- Foreign natural entities should present the project they will develop on the real estate (field, land) to the approval of the Ministry.

- Entities with foreign nationality can buy maximum 30 hectares of property with limited in rem right.

- Properties within military forbidden zones and security zones cannot be acquired or rented.

- Entities can acquire property or limited in rem right in a district/town up to 10% of the total area of the same district/town.

- Natural entities and commercial companies which are established in foreign countries with legal entity are not applied restrictions in setting mortgage.

- The properties are subject to windingup if they are acquired in violation of laws; if the relevant Ministries and administrations identify that the properties are used in violation of purpose of purchase; if the foreigner does not apply to the relevant Ministry within time in case property is acquired with a project commitment; if the projects are not materialized within time.

Considering the information above, let’s give some significant details about applications and procedures;

- Foreign buyers should be the citizens of the countries stated by the Ministry.

- The owner of the property or his/ her authorized representative should make a preliminary application to the Land Registry Directorate. (Preliminary applications are made before noon by taking sequence number) If the preliminary application is incomplete, the file will be kept waiting.

Information on powers of attorney issued abroad:

- Powers of attorney are issued by the Turkish Embassies or Consulates.

-If the power of attorney which is issued by a notary of a foreign country is certified according to The Hague Convention dated 5 October 1961 and if it bears “Apostille (Convention de La Haye du Octobre 1961)” in French, there is no need for an additional certification of the said power of attorney by the relevant Turkish Consulate

- If the power of attorney is issued by a notary of a foreign country which is not party to The Hague Convention dated 5 October 1961, the signature of the said notary has to be certified by the relevant authority of the foreign country and then the signature and seal of the said foreign authority have to be certified by the Turkish Consulate in that country. (http://www.mfa.gov.tr/guidance-forforeigners.en.mfa)

The financial aspect of the procedure is as;

- Both seller and buyer have to pay the tittle deed fee, calculated according to the selling price which cannot be less than the “Property Statement Value” to be issued by the relevant municipality. (According to the Charges Law No. 492, the title deed fee percentage for 2015 is % 2)

- Circulating capital fee which is determined locally has to be paid. (Maximum 82,5x2.5 TL for year 2015)

- At the stage when the Land Registry Directorate inquires with the relevant military authorities whether the property is located within a military or special zone, circulating capital fee for the map prepared by the Cadastre Directorate has to be paid. (385 TL for year 2015)

OTHER ISSUES TO BE NOTICED BY FOREIGN BUYERS OF A PROPERTY IN TURKEY

Undoubtedly, purchasing an estate is a subject which should be taken serious both or buyer and seller since financial loses can occur. So foreign buyer should pay attention to the issues stated below;

-The foreigner should inquire with the Land Registry Directorate if there is any limitation on the property, such as mortgage, arrestment or any obstacle which prevents the sale of the property and a formal answer should be procured from the directorate.(It is possible to be procured by the seller)

-In some circumstances, research about the seller may be needed in order to prevent problems which may occur later. If possible, a written letter stating the seller is not protested by the bank may be demanded.

-The real property sale value should be stated to the directorate in order to prevent conflicts, legal, taxational problems.

- The buyer should also studiously control whether the property is subject to “Condominium Ownership” or “Immovable Property Easement”. Immovable Property Easement is a form of ownership which depends on the land share and it is converted to condomin ium ownership upon request of land owner or collective owners whereas condominium ownership refers to the ownership right established upon the independent parts of the building.

Lastly, it should always be taken into consideration that there are plenty of important details and notions while purchasing a real estate in Turkey.

Never forget, experience is a value gained through paying suitable price or a fact the entities gain by paying excessive prices; however it has never been a concept gained free.

Therefore, we want to restate that absolutely and unconditionally work with an expert person or agent. Our firm based here in Qatar provides support in every details of the subject stated here… Call us from +974 66579139 and let us keep you at 100% safe side…

Take care of yourself and do not hesitate to be our neighbour in our beautiful country, we love you…

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