REAL ESTATE LAW
AMENDMENTS TO REAL ESTATE ACQUISITION BY FOREIGNERS IN TURKEY
Ozge Hakdan Erguc
Attorney At Law
The Code on the Amendment of Land Registry and Cadastre which was enacted on the 18th of May 2012 and published on Official Gazzette numbered 28296, amended the Land Registry Code’s article 35 which is related to the reciprocity principle.
The new provision of article 35 does not mention the reciprocity principle and does grant an authority to the Council of Ministers to determine the countries whose real person citizens can purchase real estate in Turkey. By this way, there will be no need to have a reciprocity between these countries in the list and Turkey provided that the Council of Ministers enlists the country whose real person citizen wants to acquire real estate in Turkey.
According to the amended code, the reciprocity principle has been abolished, and it is no longer required on a foreign real person’s real estate acquisition in Turkey whether there is a reciprocity principle between the foreign real person’s country and Turkey. Amended code provides benefits for foreign persons whose real estate acquisition in Turkey were not possible according to the previous code. However, amended code regulated restrictions for foreigners on the total acreage of and rights to property.
The total acreage of all the real estate owned by a foreign person was not allowed to exceed 2.5 hectares (25,000 m2) as per the previous regulations. This upper limit has been increased to 30 hectares (300,000 m2) throughout the whole country. The Council of Ministers has been exclusively authorized to double this amount.
According to the 35th provision of the amended code numbered 6302, the total surface of properties owned by foreign persons cannot exceed 10% in a district. The related part of amended Article 35 has become as follows:
“ARTICLE 35 : Foreign national real persons, citizens of the tcountries which shall be determined by the Council of Ministers, can acquire immovables and limited right in rem, in accordance with the international bilateral relations and when required for the country’s interest, provided that all legal restrictions are complied..”
According to the former code, foreign individuals and foreign commercial companies could only acquire properties for residential or commercial purposes, the new code abolished this regulation. Pursuant to the amended code, foreign legal entities are also able to acquire real estate and limited rights in rem on real estate in accordance with the provisions of certain codes such as the Petroleum Law, the Code on Tourism Encouragement and the Industrial Areas Law. Foreign investors are subject to the same rights as domestic investors, and companies established with foreign capital in Turkey are considered in equal right with Turkish companies. However, foreign charities, foundations or societies cannot buy property in Turkey. Foreign capital companies are allowed to acquire real estate or limited real rights in areas where the acquisition of such rights is granted to Turkish citizens. Therefore, there is no restriction or necessity to receive relevant permission for them since the company is a Turkish entity.