Turkish Law Blog

Getting Turkish Citizenship Through Acquisition of Real Estate

Melis Ersöz Koca Melis Ersöz Koca/ Koca Ersöz Law Firm
23 February, 2020
396

Within the scope of 20th clause, second paragraph, article (b) of the regulation on the Application of Turkish Citizenship Law, foreigners can acquire Turkish citizenship:

Real estate worth at least 250,000.00 US dollars, or equivalent foreign currency or Turkish lira, has been purchased with an annotation in the land registration indicating that it can’t be sold for 3 years; or property of established commonhold or construction servitude worth at least 250,000.00 US dollars or equivalent foreign currency or Turkish Lira deposited in advance of the sale, a preliminary sale contract is drafted by a public notary including an annotation of undertaking of the property that shall not be transferred or abandoned for 3 years, and Ministry of Environment and Urbanization has confirmed the annotation recorded by the title deeds registry”, by the decision of the President.

Three amendments have been passed in the regulation, which came into force on, January 12, 2017, September 19, 2018, and December 7, 2018.

Accordingly;

1- Value of real estate(s) purchased between the dates January 12, 2017, and September 18, 2018, shall worth 1,000,000 United States Dollar (USD),

2- Value of real estate(s) purchased/to be purchased after September 19, 2018, shall worth 250,000 USD,

3- For preliminary sale contract has been arranged/is to be arranged after December 7, 2018, the value of the real estate(s) shall worth 250,000 USD,

are required to meet the conditions.

Real estate(s) purchased before January 12, 2017, which is the effective date of the first amendment in the regulation, and real estate(s) subject to the preliminary sale contract before December 7, 2018, are excluded.

Legal Limitations

Law no. 6302, and 35th clause of the amended Land Registry Law by Council of Ministers’ decision define citizens of 183 countries who can acquire real estate in our country and the conditions of acquisition, which are announced to all of our directorates with a circular, numbered 2012/12 (1734) and processed by TAKBIS (Turkish Land Registry Information System).

For instance: Due to the fact that Syrian citizens shall not acquire real estate in our country on their own behalves, it isn’t possible for them to apply for citizenship through real estate acquisition.

In our country, foreign nationals may acquire real estate up to 30 hectares and private property up to 10% surface area of a district within the limits of the law.

Foreign nationals can purchase real estate and draft a preliminary sale contract in “Private Security Zones” with the permission of the Governorate. However, they shall not buy real estate and/or draft a preliminary sale contract in military prohibited and security zones or other areas where the acquisition of foreigners is impermissible.

Military prohibited and security zones specified in provinces are covered by Circular numbered 2017/4 (1775), which defines the nature of the real estate, and thus sales transactions are conducted according to the land registration records, without corresponding with the authorized military commanderships in these provinces.

In this respect, foreign nationals who wish to acquire Turkish citizenship through sale or preliminary sale contracts (which has the same legal status as the actual sale) shall primarily bear all the conditions of real estate acquisition in terms of nationality and legal limitations.

Since regulation covers real estate acquisition of foreign nationals personally, their spouses, children, or the like, or acquisitions made on behalf of legal entity of a company that they are managing/partners of, will not be evaluated within this scope.

Nature of The Real Estate

There is no limitation of the nature of real estates to be acquired through sale (housing, business, land, field, garden, etc.).

However, within the scope of circular numbered 2013/15 (1752), foreign nationals undertake the responsibility of obtaining pre-permits in agricultural land acquisition requests and handing in an agricultural project within 2 years; submitting a building license project when acquiring building land without construction to the relevant municipalities or institutions within 2 years.

Number of Real Estates

There is no limitation on the number of real estates to be acquired through sale or subject to the preliminary sale. It is important to have the satisfactory monetary value totals of the properties according to the values specified by the dates in the regulation.

In this respect, after one/more real estate from a Turkish citizen have been acquired through a sale or a draft of a preliminary sale contract, in order to get the total amount of 1,000,000 USD or 250,000 USD, it’s possible to acquire additional one/more real estate from a Turkish citizen through a sale or a draft of a preliminary sale contract.

Value Determination

The required monetary values of 1,000,000 USD or 250,000 USD based on the dates in the regulation shall be secured by three types of valuation: sale price/prices declared in the official deed and/or sum of the values/values stated in preliminary sale contract, sum of value/values in valuation report, and sum of value transfers/payments.

During the sales process, the value stated on the official deed cannot be changed, and this fact shall be emphasized to the applicants, because value determination is based on the official deed declaration value and attention should be paid on stating the value also in USD based on the exchange rate.

1. Exchange Rate:

The effective currency exchange rate of the Central Bank of the Republic of Turkey (CBRT) is published on their official web page, and is the basis for finding the USD equivalent of Turkish Lira used in transactions.

http://www.tcmb.gov.tr/wps/wcm/connect/TR/TCMB+TR/Main+Menu/Istatistikler/Doviz+Ku rlari/Gosterge+Niteligindeki+Merkez+Bankasi+Kurlarii/)

2. Real Estate Valuation Report:

Within the scope of the regulation regarding date of acquisition, when determining a real estate valued at 1,000,000 USD or 250,000 USD, a valuation report indicating the market value (current market value/current status value) is required.

Real estate valuation report shall be acquired from real estate appraisal companies listed on webpages of “Capital Markets Board (CMB)” (http://www.spk.gov.tr/SiteApps/SirketIletisim/List/gds), or “Association of Valuation or Specialists of Turkey (TDUB)” (http://www.tdub.org.tr/Web/CompanyListForm.aspx?UID=a11d0b04-de564ab0-9bb8-7c2c8863ba92).

The valuation reports submitted for applications are valid for 3 months from the date they are issued, and no new reports will be ordered for the transactions applied within this period.

The valuation report is based on; the value at the report date for the buildings fully completed their construction, and the value upon completion for the buildings that are under construction and that have construction servitude.

Under the Circular No. 2019/1, the value of the sale or preliminary sale contract can be below the value on the valuation report. In this respect, sales price and land registry fees within the scope of legislation shall not be conditioned by the valuation report.

There is no obligation to submit a valuation report for real estate transactions made by foreigners prior to March 4, 2019. Therefore, for sales transactions or preliminary sale contracts without valuation reports, the valuation report (if any) arranged no more than 3 months prior to the transaction (based on the CBRT effective sales rate of last workday before the date of report) can be used for value determination.

Receipt

It’s encouraged that a sale or a preliminary sale contract transfer/payment shall be arranged through a bank, and a bank-approved receipt (Wire transfer, EFT or a cashier’s check including receipt) indicating the sale value is deposited by buyer or relevant parties, into the account of seller or relevant parties is obtained. In transfers from abroad, the receipt of the account charged is also presented.

For sale transactions, date of receipt can be after date of sale. However, date of receipt for preliminary sale contract shall be either before the contract is drafted in public notary or on contract arrangement day at the latest. The receipt dated after the date of preliminary sale contract drafted in public notary will not be valid because it can’t be considered as "advance" payment. The receipt shall be submitted with the undertaking transaction and before issuing the certificate of conformity at the latest.

Transactions between Foreigners

Real estate(s) subject to sale or preliminary sale:

1- Property must not be registered in the Land Registry on the name of foreign citizens. (Including spouse and children of the foreign national with acquisition intentions)

2- Property to be acquired by a foreign national hasn’t been transferred by himself/herself, or a spouse or children after January 12, 2017.

However, if the property registered in the name of a foreign national is transferred to a Turkish citizen/company after January 12, 2017, it can be purchased by another foreigner for the purpose of acquiring citizenship.

3- Property shouldn’t be registered in the Land Registry on the name of a corporation where foreign citizen works as a manager or is a partner.

Foreign nationals who acquired Turkish citizenship through real estate acquisition and registered in MERNIS (Central Civil Registration System) with a statement of "Acquired Turkish citizenship in accordance with 5901 Law on Turkish Citizenship, Nr. 12, article b” shall also be regarded as foreign nationals in this context until the abolition of the undertaking.

(It is not possible for these people to sell their registered property during the undertaking period. During this period, those people are allowed to sell unregistered property (if any) to Turkish citizens or foreign nationals who have no intention of acquiring Turkish citizenship, but they shall not sell property to foreigners who wish to purchase real estate for the purpose of acquiring Turkish citizenship.)

People who denaturalized citizenship through permission (Blue Card) shall not be evaluated under foreign status in this respect.

If Turkish citizens have citizenship of another country (dual nationality), Turkish citizenship shall be taken as the basis for transactions to be arranged.

Cancellation of Undertaking

When undertaking has been admitted but not approved because conditions of the Certificate of Conformity have not been met, the undertaking shall be canceled upon request of the competent authority entitled to issue Certificate of Conformity.

After the issuing "Certificate of Conformity" and before the expiration of a 3-year undertaking period, if there’s a request for cancellation by the owner or the creditor of the preliminary sale, the request of the foreign citizen is directed towards Provincial Directorate of Population and Citizenship. If the process of acquiring citizenship has been initiated before, the request for cancellation shall be denied.

The undertaking processed in the declarations section within the scope of the regulation shall be abandoned upon the request of the owner or the creditor of the preliminary sale after the expiration of three-year period.

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