Who can buy real estate in Turkey?

Foreign Nationals

According to the article 35 of Title Deeds Law, foreign nationals (real persons) are able to acquire real estate in Turkey on the onditions of being reciprocal and complying with legal restrictions.

In implementation of the reciprocity principle, it is essential that real estate acquisition right given by a forein country to its own citizens and to commercial companies established in foreign countries according to the laws of these countries are also given to the citizens and commercial companies of the Republic of Turkey.

Foreign Companies

According to the article 35 of Title Deeds Law, foreign commercial companies having legal personality established in foreign countries according to the laws of those countries are able to acquire real estate in Turkey provided that they operate pursuant to the special laws such as the tourism Encouragement Law, the Petroleum Law, the Industrial Zones Law etc.

But, foreign legal entities other than the above mentioned commercial companies, such as foreign charities, foreign foundations and foreign societites, etc. cannot buy proeprty in Turkey.

Companies established / participated by foreign nationals (FDI Companies)

Legal entities (companies) established or participated in Turkey by foreign investors can acquire real estate or limited right in rem in Turkey in line with operational purposes set in company's Articles of Association.

If these properties are acquired by another company established in Turkey by foreign investors or a Turkish company owning a property is acquired by foreign investors, same rule applies.

On the other hand, the acquisition of sites in military forbidden zones, security zones and strategic zones by legal entities (companies) established or participated in Turkey by foreign investors, is subject to consent of the Turkish General Staff or military authorities designated by General Staff. The acquisition of sites in special security zones is subject to consent of the governor of the province where the property is located. The rovisions of Military Forbidden Zones and Security Zones Act No. 2565 are reserved.

Where and what type of property can foreigners buy?

Foreign nationals (real persons) from countries with which there exist legal and de facto reciporcities in relation to property pruchase can buy properties in zones coverred by an Implementary Development Plan ("Uygulama Imar Plani" in Turkish) or a Local Development Plan ("Mevzii Imar Plani" in Turkish) for use of residential or commercial purpose.

Forbidden Zones

Foreign nations and foreign commercial companies are not allowed to buy property in the military, strategic and security zones of Turkey.

In addition, the Council of Ministers is authorized to determine specific zones to be preserved such as lands which are strategically very important in terms of energy, agriculture, mining, history, cultural values, ioogical flora, and national security. thus, foreign nations and foreign commercial companies will not be able to buy property in those specially preserved zones.

In other words, TAPU (Land Registry) office are supposed to check whether a property that is being purchased by a foreign national is within one of those forbidden zones or not.

Upon your application, the local TAPU office will do a search on behalf of you whether the asset is in a foridden zone or not. If the information provided by military authorities confirms that the real estate is outside the military and security zones, then your application is accepted.

Please also note that military clearance may take a considerable time and it may be worth checking at what stage the procedure is. Thus, you are advised to gather the contact information of the TAPU office you are using so that you can call the authorities later.

Size Limitation

The total area of all lands a foreign national (real person) can own in Turkey cannot exceed 2.5 hectares (25,000 m2). Please not that the Law allows the Council of Ministers to increase this threshold to 30 hectares.

The maximum size of all lands owned by foreign nationals (real persons) in a town cannot exceed 10% of the total area within the Implementary Development Plan ("Uygulama Imar Plani" in Turkish) and Local Development Plan ("Mevzii Imar Plani" in Turkish) of a town. The Council of Ministers can set lower ratio (less than 10%) taking importance of infrastructure, economy, energy, environment, culture, agriculture and security of a town into consideration.

What is the legal framework for property ownership?

The Constitution, the relevant provisions of the Civil Code, the Title Deeds Act, the Foreign Direct Investment Law and the relevant legislation form the legal framework which enables foreign people or corporate entities to buy real estate in Turkey.

Are Turkish citizens and foreingers treated differently?

According to the legal framework mentioned above, both Turkish citizens and foreign owners have equal property ownership rights.

Types of Properties

Freehold or leasehold?

In general, properties in Turkey are Freehold.

Property Prices

Property prices have been steadily increasing. You can find a real estate from 20,000 GBP up to a couple of hundred thousand GBPs. The price depends on the location of the property, the quality of the material used in construction, architectural features of the property, ease of transportation, economic activities in the region, and availability of nearby services, etc.

Types of residential buildings

There is a wide range of options such as detached, semi-detached and terraced houses, purpose-built flats, cottages and luxury villas. Quality residential building are available everywhere in Turkey.

Are you advised to hire a solicitor?

It is not compulsory to hire a solicitor. However, since there are lots of transactions for buying a property and some steps are very important, a careful consumer will consult a solicitor who can provide legal and financial advice about all issues including a power of attorney.

Please not that solicitors are privileged professionals to gather any information on:

• Property official records at TAPU offices,
• Company registration records at Chambers of Commerce
• Financial viability of a company
• How to find out who owns a property
  • Whether a property had been built properly and all relevant licenses had been gathered

Furthermore, you may not need a translator if you are using a good English - speaking solicitor.

Moreover, a good solicitor can do all search and checks well for you to secure your rights.

In addition, please bear in mind that an authorized solicitor cannot breach the laws and regulations. otherwise, the Bar he has been registered with abolishes his license and afterwards he can never work as a solicitor.

How to contact Turkish solicitors who speak English?

Law offices and legal partnerships in Turkey provide interested parties with good and comparatively much cheaper legal services.

The following links provide the lists of English - speaking Turkish solicitors. ankara.usembassy.gov/list_of_attorneys.html | www.britishembassy.gov.uk

Please note that you can double check whether the solicitor you are using is an authorized solicitor at www.barobirlik.org.tr/eng. Please also note that this search engine is sensitive to Turkish characters ( i, ü, ö , ş, ç, ğ )

How to contact other English speaking professionals?

So as to get information on other English speaking professionals, you can contact The Turkish British Chamber of Commerce and Industry via www.tbcci.org and obtain hundreds of company names from this organization.

Can you assign someone for your all your transactions? Power of Attorney

Delegation of authority

There are several steps to be followed in buying a property. That's why it is suggested that you appoint someone or an agent to deal with all necessary transactions by means of a legal document called "Power of Attorney" for buying property. This should be done in the presence of a Notary Public.

A Principal (the person who delegates his authority) can give an Agent broad legal authority, or very limited authority. The Power of Attorney is frequently used to help in the event of a Principal's illness or disability or in legal transactions where the principal cannot be present to sign necessary legal documents.

Suggested duration for a Power of Attorney

Under what conditions and how long a Power of Attorney shall be in force and end should be clearly defined.

What can be delegated?

A Power of Attorney can be used to make an Agent:

• Buy, sell or rent out your property
• Manage your property
• Conduct your banking transactions
• Invest or make use of your money on your behalf
• Make legal claims and conduct litigation or
• Carry out tax matters

The conditions such as the duration of validity, actions that the agent can take cannot take etc. should be stated clearly in those documents.

Who should be appointed?

The candidate agent should be researched well. If he/she is a solicitor, it might be useful to cross check whether he/she is a member of the local Lawyer' Barr Association. Or, if you find someone from other professions, you can ask for a CV and a professional reference letter.

Please not that without a trustworthy Agent, a Power of Attorney becomes a dangerous legal instrument.

You may appoint multiple Agents. If you apoint two or more Agents, you must decide whether they must act together in making decisions involving your affairs, or whether each can act separately. Allowing your Agents to act separately may ensure that an Agent is always available to act for you. But it may also result in confusion and disagreements if the Agents do not communicate with each other.

Agent's responsibilities

The Agent appointed by means of a Power of Attorney is your representative. As long as you have the legal capacity to make decisions, you can direct your Agent to behave the way you wish.

The Agent is obliged to act for the sake of yoru interests and is supposed to avoice any "self-dealing".

Money should be kept in a separate bank account for the benefit of the Principal. Agents must also keep accurate financial records of their activities, and provide complete and periodic accountings for all money and property coming into your possession.

Abuse of Power of Attorney or Frauds

A Power of Attorney can be abused, and a dishonest Agent may use a Power of Attorney to transfer your assets to himself. That is why, it is very important to appoint an Agent who is completely trustworthy and to reuire the Agent to provide you with complete and periodic reports.

If you agent is a professional accredited by a occupational association, you should complain about him/her against that association in case of an abuse.

Please also note that you can apply to public attorneys in local justice courts ("Adliye Sarayi" in Turkish) and complain about any abuse or fraud if you are able to document the case.

Abolishment of Power of Attorney

You may revoke the Power of Attorney at any time, in the same way in which it was issued. In order words you shold contact the Nortay Public in Turkey or Turkish Consltae General in London or your country to revoke the Power of Attorney. In that case, you should send a written notice to your Agent and say that you are revoking the Power of Attorney. Do nto forget to request the return of all copies of your Power of Attorney. You shold also notify your bank or other financial institutions where your Agent is likely to use the Power of Attorney that it is no longer valid.

How to legalize your documents prepared in the UK?

Legalization simply means confirming that a signature, seal or stamp appearing on a document is genuine. The signatures or seals of British public officials such as solicitors, notaries, registrars on certain documents from the UK have to be confirmed before those documents can be accepted in Turkey.

On the other hand, many types of documents can be apostilled by the Foreign and Commonwealth Office ( www.fco.gov.uk/legalisation ) and are exempt from certification by the Consulate General.

Are there any (universal) mortgages companies in Turkey?

There had been no universal mortgage system in Turkey until March 6, 2007. However, the mortgage law was adopted by the Turkish Parliament and published in the Official Gazette on March 6, 2007. The new law makes mortgages available over long periods to home buyers and is expected to transform both the housing market and the Turkey's urban environment.

Translation Professionals

You are strongly advised to have the contracts you are to sign with a seller:

• translated by a sworn - translator and
• ratified by a notary public

If you have any difficulty in finding a local sworn - translator, you can ask a notary public to give you a list of translation professionals they use.

How to find financial resources to buy property in Turkey?

In order to buy a property in Turkey, you can re-mortgage your property in your country. In addition, if you can provide Turkish financial organizations with acceptable financial guarantees such as a bank guarantee letter, etc. those institutions can supply you with a long-term loan. However, please note that in case you have financial trouble in paying back the loan, the relevant company may confiscate the property on finance.

Double checking the property

Once the sale and purchase conditions are agreed with the owner or with his/her agent, you are advised to ask for a copy of the TAPU (Title Deeds) and double check whether:

• The TAPU really belongs to the property you are interested in
• It is a residential or commercial property in a zone covered by an Implementary Development Plan or a Local Development Plan (If not, please note that the new Title Deeds law does not allow you to buy it, please give up buying it)
• the property really belongs to the person who introduced himself to you as the "owner" (Compare the ID card of the person to the TAPU of the property)
• A joint ownership is in quetion (if so, whether all of the shareholders comply with the sale)
• No annotation prohibiting the sale/purchse of the property appears on the TAPU (Unless the prerequisites envisaged by the annotation are met, the sale is impossible)
• The Implementary Development Plan (Imar Plani) or the Local Development Plan allows you to erect a building on the land (if a land is in question an you want to construct a building on it),
• The buildin complies with all regulations such as earthquake-proof standards (if you are about to buy a flat or house, you shold check all licenses and official permits for the property had been properly obtained),
• The curent owner(s) owes no over-due taxes to the Tax Office,
• The current owner(s) owes no over-due debts to the utility companies,
• The agent you are using, if any, works for a registered company,
• The solicitor you are using, if any, is an authorized solicitor,
• A binding contract with a tenant using the property is in question.

Moreever, in order to save time and not to be in a hurry later, you should,

• Register with a local tax office and then open a bank account
• Make necessary contacts with the relevant professionals such as a good solicitor, a Sworn-tranlator, an independent accountant or an agent.

Preparing a draft contract

Although these contracts are not compulsory according to current regulations and mutual declaration of both the buyer and seller to the TAPU (Title Deeds) Registry Office is enough to carry out the transfer of ownership, having a robust sales & acquisition contract will allow you to protect yourself from some potneital risks which may stem from the seller or agents.

If you are using a real estate agent and/or solicitor, please ensure that contract refrs to her/him and she/h also signs the contract.

Please make sure that a contract should, at least, includ the following:

• A detailed description of the property (address, TAPU details, technical conditions, etc.)
• The actual price to be paid to the seller for the property (Please note that when the contract includes any "price" clause, then each of both you and the seller are to pay a Stamp dluty of 0.75% of the value stated in it. However, mentioning the actual price will allow you to secure all your rights in case of a future legal dispute),
• the details of the bank account of the professional you use, if any (you should use a single account for all payments to be make to this professional),
• The payment terms and conditions (payments to the seller including deposite, interim and final payments, and payment to any agent/solicitor, if any ought to be separately indentified),
• A statement emphasizing that the seller and the buyer will pay their own tax liabilities (some selers may force you to pay all taxes including theirs with regards to the sale of the property),
• The fees and commissions to be paid to the solicitor or agent (this iwll secure you in a way that you will not be invovled ina tax evasion which may be caused by those professionals. Furthermore, this will prevent those professionals from making unfair money)
• Under what conditions and how the money paid by the buyer will be refunded by the seller,
• Force majeure conditions (for example, what if a legal obstacle occurs in the future),
• How current tenants, if any, will be treated,
• How over-due debts, if any, of the current owner, which are property-related, will be treated,
• How existing furniture, if any, will be handled
• Whether parties can give up the sale/purchase, if so, under what conditions this can happen
• How to keep the parties regularly informed about the on-going transactions at the local TAPU office,
• How a power of attorney, if any, will be cancelled or amended, how other parties will be kept informed about this,
• Detailed permanent contact information of the signature holders.
• What if one of the parties breaches the promises written down, who will decide under what conditions that a breach was realized,
• How future disputes will be sorted out,
• The right and responsbilities of the persons whose signatures appear on the contract,
• ID number of Turkish Nationals (TC Kimlik No) who are to sign the contract, the Barr registry number of the solicitor being used and the trade registry number of the real estate company.

Having the draft contract translated

Befre signing the contract, you ought to have it translated into English (or your own language). In other words, you are advised to have both English and Turkish versions of the contract. Yo uare strongly advised to use a Sworn-translator if you do not use an English-speaking solicitor. Sworn-translators' fees are quite appropriate.

Please note that relying on only an oral-translation may lead to unwanted situations in the future.

Instead of preparing two separate contracts in Turkish and English, having a bi-lingual contract may be of great use.

Having the contracts notarized

You are strongly advised to sign both the English and Turkish versions of the contract (or a bi-lingual contract) in the presence of a notary public and then have them notarized. This will ensure that

• the people signed the contract and their signatures are genuine,
• the contract is in line iwth Turkish laws and officially acceptable anywhere in Turkey,
• the terms within the contract are binding for all parties

Application to the TAPU Office

As a next step, both buyer and owner (or their legally authorized agents) apply to the TAPU Office for transferring the ownership.

Documents asked by the TAPU Office

Individuals

During the application, the buyers (individuals) are to provide the local TAPU Office with the following documents:

1. Title Deed or a document indicating the property's exact location (plot or parcel number etc)
2. Passport and/or ID Card of the buyer,
3. Two recent passport photos of the buyer
4. If any agent is being used:
   1. Passport and/or ID Card of the agent
   2. Two recent passport photos of the agent and
   3. An acceptable Power of Attorney

FDI companies (companies established in Turkey)

Companies established in Turkey in line with the Foreign Direct Investment Law have to issue an authorization document to be prepared by the Commercial Registry Office on behalf of them. This document basically covers the:

• name/title of the company,
• the names of the authorized representatives, and
• whether the type/legal features of the business allow the property purchase

Companies established abroad

Commercial companies established in countries with which reciprocity exists have to submit an officially ratified authorization document similar to the document described in the above sub-section. If any power of attorney is to take palce, then two recent passport photos of the agent and the an acceptable Power of Attorney are required.

How are FDI and foreign companies treated by the TAPU Offices?

FDI Companies

Legal entities (companies) established or participated in Turkey by foreign investors can acquire real estate or limited rights in rem in Turkey in line with operational purposes set in company's Articles of Association.

Foreign Companies

Foreign real persons and trading companies having legal personality established in foreign countries according to the laws of these countries can acquire real estate in Turkey on the conditions of being reciprocal and complying with legal restrictions. In implementation of reciprocity principle, it is essential that real estate acquisition right given by a foreign country to its own citizens and to trading companies established in foreign countries according to the laws of these countries, are also given to the citizens and trading companies of the Republic of Turkey.

The real property purchase application of such company to local Land Registry Offices is forwarded to General Directorate of TAPU (The Land Registry and Cadastre Office) for reciprocity control. General Directorate double checks the application from the Ministry of Foreign Affairs as the existence of reciprocity between our country and a foreign country in terms of trading companies, is determined by the Ministry of Foreign Affairs.

After the reciprocity confirmation of aforementioned Ministry and response of the military post stating the subject real estate is out of military forbidden zones and security zones the company then becomes eligible for buying the property.

Trading companies having legal personality established in foreign countries according to the laws of these countries have to submit an officially stamped authorization document during the registration.

Foreign commercial companies which are legal entities can buy property provided that they operate pursuant to the special laws such as the Tourism Encouragement Law, the Oil/Petroleum Law, the Industrial Zones Law, etc. In addition, foreign legal entities other than the above mentioned commercial companies, such as foreign charities, foreign foundations and foreign societies, etc. cannot buy property in Turkey.

For more information please visit www.tkgm.gov.tr

Issuance of a New TAPU by the Office

Finally, after military clearance has been finished, you are given an official owership document call the Title Deeds (TAPU).

Without having a TAPU, you are never considered to legally own the property even if you signed a legally acceptable purchase contract with the seller.

You are advised to make the payments net of the deposit (plus the interim payments, if any) to the seller at this stage.

Declaration of acquisition to the local government

You are supposed to apply to the Municipality for declaring the acquisition of the property by the end of the year of acquisition. You simply fill out a form and submit it to the municipality. Afterwards, the municipality officers will tell you when/how much "real estate tax" you are going to pay.

Source: http://www.turkisheconomy.org.uk/buying_property.html