HOW DO FOREIGNERS BUY REAL ESTATE IN TURKEY?
1) Can Foreign Nationals own real estate in Turkey?
Before 2012, the purchase of real estate by foreigners had been restricted by the reciprocity principle. The new law effective May 18, 2012 allowed foreign nationals to purchase real estate in Turkey, with the exception to Syrians and North Koreans. As a dissimilarity to other legal systems , a real estate sale contract between two parties is overseen by the state. This means that one cannot simply sign a contract, pay the price and own a land; a formal agreement has to be signed before the state, necessary procedures carried out and fees paid. Absence or fault of any of the procedural requirements may result in a void contract and loss of one’s financials.
2) What Are the Restrictions For Foreigners Owning Real Estate?
For foreign nationals the right to own real estate is not without restrictions. A foreigner is only allowed to own a total of 30.000m2 of land in all Turkey. Also the size of the property must not exceed 10% of the total purchasable lands in the district.
Also, nationals of Russia, Ukraine, Austria, Australia, Bahamas, Bahrain, Algeria, Pakistan, India, Iraq, Iran, Tunusia, China,Denmark, Malta, Fiji, Israel, Vietnam, Morocco, Jordan, Egypt are bound by more restrictions as to the quantity of real estates they can own (for more information, please consult your lawyer).
Finally, it is also forbidden for foreign nationals to own or rent any real estate in military restricted areas and security zones. Therefore when a foreigner applies to purchase real estate at the land registry, military authorities must first be consulted on whether or not the property in question is within any military area. The process can only proceed if the military authorities approve the purchase.
3) What Conditions Need to Be Met For Foreigners to Purchase Real Estate?
If the purchased property is without any construction (plantation, field etc.) within 2 years of the purchase one must submit an application with the Ministry and present a project regarding the use of the property (please consult your lawyer for more information).
The Contract of Sale must be composed and approved by the Land Registry. At a Notary it is possible to sign a Preliminary Agreement for the sale of real estate, however that agreement is not binding for any 3rd parties. Therefore one can not legally purchase real estate in Turkey through an informal contract or a preliminary agreement at a Notary. All contracts regarding the ownerships of real estate in Turkey have to be made in Land Registries. For this to take place all necessary procedures have to be carefully carried out.
If you’d like to form a contract at the Notary regarding preliminary agreement or if you’d like that contract to be binding for 3rd parties, it’s important that you consult your lawyer to make sure the contract is valid and legally binding for all parties.
4) How Does the Purchase Procedure Work?
To purchase real estate one must first submit an application to the municipality for documents which state the value of the real estate. The real estate also must have an insurance policy which covers earthquake damages. For foreigners who do not speak Turkish, a sworn certified translator and two legal witnesses must be present during the purchase.
In order to purchase and sell a property both buyer and seller are legally required to pay 2% tax each, a total of 4% of the value of the property as stated in the Bill of Sale . Other fees also must be paid to the land registry, differing from district to district and from year to year.
5) What Should You Be Careful About Before Buying Real Estate?
Before you commit yourself to the purchase of real estate you should make sure the other party is the legitimate owner or a credible real estate agency. Before you make any downpayments it is highly recommended that you contact your lawyer to make sure the contract is legitimate and legally enforceable.
One other vitally important step you should take is checking whether or not the property has any mortgage or distrait registered on it. Buying a property which has a mortgage or distraint registered on it makes you liable for the debt and might end up with your property being sold at an auction. When buying a property with a mortgage, it is important to know how big the debt is and exactly how much it will cost to remove the mortgage. Because of all these technicalities, many legal disputes and lawsuits occur in Antalya between foreigners who want to buy real estate and owners who want to sell. Often times the lawsuits cost lots of money, time and they end up without a satisfying decision for the buyers. Therefore, in order to have legal protection and grounds for your real estate transactions, it’s important for you to consult a lawyer experienced in this area before signing any binding contract.
Barış Erkan ÇELEBİ
Trainee Lawyer at Gunes Law Firm