According to the Land Registry Law numbered 2644 (“Land Registry Law”), it is possible for a foreigner to acquire immovable property in Turkey, provided that the acquisition conforms with the legal restrictions in the Turkish Law.
After the amendments made for the 2644 numbered law in 2012, abolishing the reciprocity requirement in the foreign acquisition and allowing foreign real persons and legal entities to acquire real properties in Turkey, foreigners' demand in the real estate sector has considerably increased. By this means, 220.351 immovable have been sold within the period from 2013 to 2020 in Turkey.
According to the Turkish Institute of Statistics’ figure for 2020, foreigners bought 40.812 in Turkey. Even though the restrictions imposed on international travels have led to a significant decrease in property sales during April and May, the sales have re-escalated to the pre-pandemic figures in September 2020, following the re-opening of borders.
The acquisition of immovable property by foreigners in Turkey is regulated in Article 35 of the Land Registry Law. Under the conditions specified in this article, foreign real persons and legal entities will be able to acquire immovable property without satisfying the reciprocity principle. Pursuant to Article 35 of the Land Registry Law, certain legal restrictions have been imposed on foreigners when acquiring a property in Turkey;
Limitations Ratione Loci
The total area of immovable property along with limited real rights of an independent and permanent nature that foreign real persons acquire may not exceed 10% of the land area available as the private property of a sub-province or 30 hectares per person on a nationwide basis. The President of Turkey is authorized to increase the amount up to 60 hectares.
Foreign real persons and legal entities are not allowed to acquire and lease real estate in military forbidden zones and security zones unless permission is obtained.
Limitation Ratione Personae
Foreign real persons who are nationals of countries specified by the President of Turkey may, on condition of compliance with the legal restrictions, acquire immovable property and limited real rights in the country.
Immovable properties that have been acquired contrarily to the provisions of Article 35 of the Land Registry Law and/or have been identified by the relevant Ministry and administration that it is utilized in contrary to its acquisition purposes shall be subject to liquidation procedure.
Besides, as per Article 35/3 of the Land Registry Law, the President may, where the country’s interests so demand, qualify with regards to country, person, geographical region, duration, number, proportion, type, nature, area, and amount, restrict, fully or partially cease or forbid the acquisition of immovable property and limited real rights by foreign real persons and incorporated commercial companies established in foreign countries under the laws of their own countries.
On the other hand, an exclusive condition comes into play, when acquired immovable is unconstructed. In that case, foreign persons shall develop a construction project, that is appropriate to the nature of the immovable. Furthermore, foreigners also acknowledge and undertake before Land Registry Directorate that the approval for the construction project will be obtained from the relevant Ministry, within two years from the acquisition.
If the foreign person does not apply to the Ministry within two years or/and the construction project is not completed within the time limit, the immovable in question shall be subject to liquidation provisions. Moreover, if the immovable is not liquidated by the owner within the period given by the Ministry of Finance, which shall not exceed one year, the immovable shall be liquidated and paid to its owner.
In conclusion, foreign real persons and legal entities may acquire a property in Turkey by complying with the legal limitations enacted in the Land Registry Law. In order to prevent the problems that may arise due to the fact that foreigners are not familiar with the legislation and practice in our country, foreigners should pay regard to the above-mentioned aspects. Unless otherwise, a foreign investor may confront the risk of liquidation.
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