Announcement of TKGM Circular No. 2024-4

The General Directorate of the Land Registry and Cadastre (“TKGM”) has announced Circular No. 2024-4 dated 13 April 2024 (“Circular”). Guidelines on the Implementation Regulation of Turkish Citizenship Law, effective from 1 February 2024, were also released to the public alongside the Circular.

The Circular amends regulations regarding the acquisition of real estate by foreign individuals.

1. A property valuation report will no longer be required for requests to acquire real estate by foreign persons - except when said request is part of an acquisition of citizenship.

TKGM Circulars No. 2019/1(1795) and 2019/5(1799) made it mandatory to present a property valuation report for certain transactions where foreign persons are buyers and in real estate acquisitions for citizenship purposes.

Circular No. 2024/2 determined the Procedures and Principles For The Valuation Reports To Be Used In Real Estate Acquisitions By Foreign Persons and Certain Transactions. GEDAŞ Gayrimenkul Değerleme A.Ş. was authorized to issue reports for requests regarding acquisition of real estate for citizenship, while valuation institutions licensed by the Capital Markets Board were authorized for other requests.

With the new Circular, the requirement for a property valuation report for real estate acquisition requests by foreign persons, other than requests for acquiring citizenship by acquisition of real estate, is abolished. Therefore, no property valuation report will be required for these transactions.

2. Where citizenship is being acquired through the purchase of real estate, the property valuation report will only be required at the stage of annotation of the non- transfer commitment before the deed.

According to Article 20/2(b) of the Regulation on the Implementation of the Turkish Citizenship Law, if foreign persons are determined by the Ministry of Environment, Urbanization and Climate Change to have purchased condominiums, condominium easements, or properties classified as land, with building on them, (or to have been promised the sale of condominiums or condominium easements), worth at least 400,000 US Dollars (or equivalent foreign currency), and a three-year non-transfer commitment (of title or promise to sell, as appropriate) is annotated in the title deed records, these persons can acquire Turkish citizenship exceptionally via Presidential Decision under Article 12/1(b) of Turkish Citizenship Law No. 5901.

The declared sale price in the official deed, the value in the valuation report, and the record of payments must each meet the required amount. Upon determination of the investment amount by TKGM, a Real Estate Investment Certificate shall be issued according to which the decision on citizenship will be made.

According to Circular No. 2022/1 on the Foreign Exchange Purchase Certificate in Foreign Real Person Acquisitions, the amount of US Dollars or equivalent foreign currency corresponding to the agreed contract price must be converted to Turkish Lira by the Central Bank of Turkey via banks, and the foreign exchange purchase certificate issued by the bank must be declared and used as the basis for the official deeds.

The valuation report can now be issued after the sale (or promise to sell) transaction, to be presented with the request for annotation (dating-back a maximum of three-months). In this case, the valuation amount at date of acquisition will be determined by reducing the valuation report amount to the date of the foreign exchange purchase certificate via domestic product price index (D-PPI) rates.

Attention is required as this calculation method may lead to a decrease in the report value.

It should be noted that under Circular No. 2024/2, in certain situations TKGM could reduce the amount according to D-PPI rates (such as when a current report is required). However, since the obligation to present property valuation reports before the sale (or promise to sell) has been repealed, a general provision in this direction has become necessary.

Considering this, if the declared sale (or promise to sell) amount in the official deed and the records of payment meet the investment amount, but the valuation report amount does not, the investment amount will be determined by TKGM according to these principles.