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Turkey

Moroğlu Arseven

1

Restrictions

Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

Yes, foreigners can own and occupy real estate and hold shares in property owning companies in Turkey, provided that the following conditions are met;

1- To comply with the legal restrictions (stated below), 
2- To be a citizen of the countries determined by the President of the Republic of Turkey in terms of the international bilateral relations and in cases required by the interests of Turkey.
The total area of the real estates to be acquired by the foreigners cannot exceed 10% of the area of the district subject to private ownership and 30 hectares throughout the country per person. It is also required to obtain permission from the military authorities if this real estate is located in the security zone.

Additionally, the President of the Republic of Turkey may determine, restrict, partially or completely stop or prohibit the acquisition of the real estates by the foreigners in terms of country, person, geographical region, duration, number, ratio, type, quality, area and amount in cases required by the interests of Turkey.

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

No, the foreign companies are not subject to any financial restrictions for the purchase of real estate.

2

Taxes

A. Buying

Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

The title deed fee of 2 percent of the sales price is payable by both the purchaser and the seller separately when buying real estate. In practice, parties usually agree on imposing the total amount of 4 percent to the purchaser. As a rule, commercial real estate sale and sales made by constructors are subject to Value Added Tax (“VAT”). However, real estate owned by commercial entities at least two years are exempt from VAT. Additionally, the Turkish Natural Catastrophe Insurance policy is also required to be issued during the title deed transfer while buying a real estate. Further real estate consultant service fee of 2 percent of the sales price + VAT may be requested by the real estate consultants.  
 
B. Owning

Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

Property owners are responsible for annually paying the property tax collected by the municipalities. The amount of this tax is calculated based on the value of real estates. This tax must be paid every year, starting with the year after buying the real estate.

The taxpayer is the owner of the real estate. The property owner cannot transfer the burden of this tax to the tenant or an occupier. If there is a joint ownership on the real estate, all owners are obliged to share the tax pro rata to their shares. 
C. Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

A foreigner who is not residing in Turkey may benefit from the VAT exemption. This exemption is only applied on the first delivery of real estate from the constructor.
In order to benefit from the VAT exemption in residential property or commercial property purchase transactions, the amount of the real estate must be paid in foreign currency.

 

3

Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

The ownership of real estate is evidenced by registration at Land Registry. This is a public register of titles

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

Land Registry entries are publicly available. Whoever that can prove his/her interest, he/she can examine the information and documents in the Land Registry before the land officer.

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Burak Baydar
Moroğlu Arseven
Turkey