Acquisition of Real Estate by Foreigners in Turkey
The Turkish real estate sector, especially in the last decade, has come to prominence significantly and has become increasingly attractive opportunities for investors. Sunday Sunday, although the negative effects of the recent economic crisis and the global financial contraction have been felt in the European and US real estate markets, the real estate market in Turkey is promising for the future. A reduction in demand across Europe and, consequently, the persistent decline in housing prices, the Turkish Statistical Institute (TurkStat) reported in the second quarter of 2011 compared with the same period of 2010 in Turkey, apartments in sales, an increase of 18% was observed. This, in turn, indicates that Turkey has an extraordinary growth potential in the real estate Sunday.
The Turkish real estate sector offers great opportunities to investors thanks to the changing population factors in parallel with the developing economic figures of the country. Increasing commercial activity in the industrial and transportation-intensive regions of the country also leads to a rapid increase in the need for workplaces and housing.
If we examine the strengths and weaknesses of the Turkish Real Estate Sector, we will examine;
Strong Points;
1) A sound banking system
2) The mortgage housing loan system that was recently introduced
3) The presence of strong construction companies that have made a name for themselves around the world
Weak Points;
1) The large number of illegal and old houses that are not suitable for the use of mortgage housing loans
2) The limited amount of favorable land, especially in Istanbul, and the fact that it is expensive
If we examine the opportunities and threats in the sector, we will;
Opportunities;
1) The growth potential that arises due to the fact that the supply of housing is lower than the demand
2) Expected increase in housing quality in accordance with earthquake regulations
3) The increasing need for residential and plaza buildings
4) The fact that reconstruction works in cities lead to the demolition of slums and the construction of higher quality housing in their place
Threats;
1) High earthquake risk, especially in the Marmara Region, which covers the leading industrial regions of Istanbul and Turkey
2) The usual fluctuating trend in the industry
To make a brief summary about the tax framework for investors, it is necessary to;
1.Corporate income tax: 20% of net profit, including capital gains from real estate transactions and rental income.
2.Income tax: Natural persons who receive rental income from real estate are obliged to pay income tax at a level that gradually increases from 15% to 35%.
3.Value added tax: It is at the level of 1%, 8%, 18%, depending on the type of products and services. Residences under 150m2 used as a residence are subject to VAT at a rate of 1%, and all other real estate is subject to VAT at a rate of 18%.
4.The registration of the real estate is subject to the title deed price. The amount that both the buyer and the seller must payis calculated as 1.5% of the acquisition or transfer price of the real estate.
5.Property tax: In 2009, it is at the level of 0.1% for buildings used for residential purposes, 0.2% for other buildings (used as factories or offices), 0.1% for land and 0.3% for construction sites based on their registration values.
ACQUISITION OF REAL ESTATE IN TURKEY BY FOREIGNERS IN TURKEY WITHIN THE FRAMEWORK OF THE LATEST LAW AMENDMENTS
With the Law No. 6302 on the Amendment of the Land Registry and Cadastre Law, significant changes have been made to the conditions required for the acquisition of real estate by foreigners. With the law adopted on 03/05/2012, the conditions imposed for foreign citizens who want to acquire real estate in Turkey are facilitated, while some restrictions related to the countries that Turkey borders with the law remain.
With the amendment, the law granted the citizens of 183 countries the right to purchase real estate in Turkey “without seeking reciprocity conditions”. Due to the high interest in real estate investment, opening Turkey to the acquisitions of foreign investors is the most important reason for this legal change.
The most noticeable change made within the framework of the law was the abolition of the reciprocity condition sought in applications. In this way, even if a Turkish citizen cannot acquire real estate in the country where the foreigner is a citizen, a foreign real person will be able to acquire real estate on the territory of Turkey.
It is necessary to explain the concept of reciprocity; the principle of reciprocity of a citizen of a state certain rights in a foreign state, such person is a national of the foreign state that can benefit from the same rights of citizens in the state to benefit from being bound implies. Reciprocity may arise from a contract (political), law or actual practice concluded between states. In accordance with this principle, it is essential that the rights granted to the citizens of the Republic of Turkey to which the right to land ownership is not granted to persons, are granted to the citizens of the country, the rights granted to their citizens by the foreign state in the acquisition of real estate are also granted to the citizens of the Republic of Turkey. For example, if a state grants the right of building ownership to its own citizens and Turkish citizens, the citizens of this state will only be able to benefit from this right in Turkey, but will not be able to acquire land ownership. Dec.
If we examine the land registry law, the amount limitation has been imposed on the acquisition of real estate by foreigners. Accordingly, the continuous nature of the dependent and independent foreign real persons and limited real rights, which gained a total area of private ownership survey of the county which is subject to 10% across the country and per capita of about 30 hectares (300 acres) may not exceed. In addition, the Council of Ministers authorized to increase the 30 hectares that can be acquired throughout the country up to 2 times per capita. As a result of this arrangement, a foreign citizen will be able to acquire 60 hectares (600 acres) of real estate in Turkey by the decision of the Council of Ministers. Before the change, the total area of real estate that foreigners could buy throughout the country could not exceed 2.5 hectares (25 thousand m2).
In addition, the acquisition of real estate in military areas was subject to the permission of the General Staff or the commands that it will authorize; in the private security zone, the permission of the governorates where the real estate is located.
Regarding the acquisition of real estate by trading companies with a legal entity established in foreign countries according to the laws of their own country;
35 of the Title Deed Law. 2 of the article. paragraph with legal personality established in foreign countries according to the laws of their own country, trading companies, however, the provisions of private law (Tourism Incentive Law No. 2634 Petroleum Law No. 6326 industrial zones Law No. 4737) real estate and you can obtain limited rights within the framework of these companies acceptable to the establishment of limited real rights in favor of outside trading companies and stated that they could not have acquired immovable property.
In the immovable pledge facility, it is stated that the limits in this article will not be applied. In other words, real estate pledges will be made in foreign countries in favor of trading companies with legal entities established in accordance with the laws of their own countries and foreign nationals.
In terms of companies with foreign capital established in Turkey;
36 Of the Law.according to the article, established in Turkey, the company with foreign capital; foreign real persons, foreign legal entities or international organizations in Turkey and the capital of the company, the Board 50% or more, or if you have to be able to appoint the majority of board members or, in the event that he is entitled to hold office, the company is established in Turkey however, even though can acquire property or limited real rights to carry out the activities specified in the main contract and use it.
According to that same article, in this way established in Turkey, the capital is 50% or more in the hands of Foreign natural or legal person or assignment of the right to dismiss members of the board of directors or the company owned, Turkey which was established in partnership with another company, the ultimate ratio of 50% or more if you have the same conditions apply. If the final partnership rate is 50% or more; it may occur if foreign investors acquire shares of a company with immovable domestic capital directly or indirectly, and the shareholding ratio of foreign investors in companies with immovable foreign capital reaches 50% or more as a result of the transfer of shares. In other words, these companies will only be able to acquire immovable property or limited real rights in order to carry out the activities specified in their articles of association.
Cases where the application will be rejected without any action;
The cases in which the application will be rejected without any action are stated in the circular No. 1734 of the Ministry of Environment and Urbanization. According to this; foreign natural persons and companies having legal personality established in foreign countries according to the laws of their own country, except for all entities (entity, or non-foundations, associations, Cooperative, Association, Community, communion, etc.) Since it will not be possible to acquire real estate in Turkey and establish limited real rights in their favor, requests related to this issue are directly rejected by the Land Registry Directorates without any correspondence.
In accordance with the same regulation, since the acquisition of real estate and limited real rights of foreign citizens in Turkey is limited to 30 hectares, acquisition requests exceeding this amount are directly rejected by the Land Registry Directorates.
In the event that there are no structures on the land acquired by a foreigner;
35 of the Title Deed Law.in the article, foreign real persons and trading companies with legal entities established in accordance with the laws of their countries in foreign countries are obliged to submit the project to be developed in the unstructured real estate purchased by the relevant Ministry for approval within 2 years. Circular No. 1734 of the Ministry of Environment and Urbanization states that if the approved project or the relevant letter stating that the project has been approved comes to the Land Registry Directorate, the land registry declarations house has been approved by the “… Ministry … project. The date stipulates that a statement will be made in the form of ”Journal”..
In accordance with this circular, if no notification is made regarding the approved project within 2 years or the project is not completed within 2 years, the local unit of the Ministry of Finance is notified by the Land Registry Directorates for the liquidation of immovable or limited real rights at the end of two years from the acquisition.
In accordance with the Circular No. 1734 of the Ministry of Environment and Urbanization, the general procedure to be followed by the Land Registry Directorates for the acquisition of real estate and limited real rights of foreign citizens;
Examination of the acquisition conditions of the applicant in terms of nationality
Asking whether the real estate in question remains in Military Forbidden Zones, Military Security Zones or strategic areas.
obtaining the commitments specified in the circular in terms of limitations on 30 hectares
According to the relevant circular of the Ministry of Environment and Urbanization, 35 of the Land Registry Law. the real estate or real rights acquired contrary to the provisions of the article or used contrary to the purpose of acquisition other than the legal obligation may also be subject to liquidation.
From the point of view of those who are Turkish citizens by birth and have lost Turkish citizenship by obtaining permission to leave;
With the circular No. 1734 of the Ministry of Environment and Urbanization, those who are Turkish citizens by birth and lose their Turkish citizenship by obtaining permission to leave, and their children who are traded with them, are subject to Article 35 of the Land Registry Law. excluded from the limitations in the article. Thus, persons of Turkish origin living in foreign countries, especially in Germany, and who have become citizens of that country, are not subject to these restrictions. The applications of these persons are finalized by the Land Registry Directorates.
As a result; The Law No. 6302 on the Amendment of the Land Registry and Cadastre Law 1.ve 2nd. by abolishing the reciprocity principle contained in the Land Registry Law since 1934 with its articles, the lands of Turkey have been opened to the purchase of citizens of 183 countries without any conditions except for the limit of the amount of 30 hectares.
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