Introduction

The Real Estate Market Turkey

Turkey is noted for its unique geographic location, straddling the European, Middle Eastern, and Central Asian continents. The real estate market is constantly expanding due to the country’s growing economy and population in Turkey. Furthermore, the property demand turkey is regarded as one of the most important contributors to Turkey’s economic growth.

The government has supported real estate investing in recent years by significant law reforms that have improved the atmosphere for both domestic and foreign investors.

The reciprocity criterion, which enabled only those whose countries of origin allow Turkish residents to purchase real estate in those nations to purchase real estate in Turkey, was eliminated in 2012. While the number of unrestricted countries expanded from 89 to 183 as a result of this modification, citizens of a few countries are still forbidden or subject to specific restrictions for national security reasons.

As a result of the passage of a comprehensive new immigration law in 2014, the period of residence permits issued to foreign real estate owners was increased from three months to one year. As a result, such foreigners have been given the opportunity to renew their residence cards as long as they hold property in Turkey.

Foreigners Purchasing and

The Real Estate Market Turkey

Foreign real persons may purchase real estate in Turkey or gain restricted real rights (e.g., right of usufruct, right of building, etc.) over immovable property, subject to the following requirements.

1. The foreigner must be a citizen of a nation that is not on the government’s list of prohibited countries.

2. A foreigner’s total acquisitions cannot exceed 30 hectares over the entire country.

3. The total amount of private properties purchased by all foreigners in a certain district cannot exceed 10%. (1)

4. Real estate cannot be in a military prohibited zone.

However, while arranging a mortgage in favor of a foreign individual, the aforesaid restrictions do not apply. As a result, all foreigners, regardless of citizenship, are regarded similarly as Turkish citizens and are not subject to any restrictions when mortgages are issued in their favor.

Foreign Corporations Acquire

Real estate acquisition by firms established in other jurisdictions is severely limited. In fact, only foreign firms operating in specific industries are permitted to own real estate in Turkey.

Foreign enterprises operating in the petroleum, tourist, or industrial manufacturing sectors are permitted to purchase real estate in Turkey if they secure the requisite investment and operation licenses from the relevant ministries in line with specified legislation.

Foreign companies, like people, are unable to purchase real estate that is located within a military prohibited zone.

Similarly, regardless of where they are formed, foreign firms are considered the same as Turkish enterprises when it comes to obtaining mortgages in their favor. As a result, when people get a mortgage, there are no restrictions.

Foreign legal entities other than commercial firms, such as associations, foundations, governmental institutions, or similar non-profit organizations, are not permitted to directly buy real estate or restricted real rights in Turkey.

Foreign-invested Turkish companies are acquiring properties in Turkey.

The extent of foreign participation in the Turkish firm’s shareholding and management structure determines whether or not it is considered a foreign-invested corporation under Turkish law.

Companies located in Turkey are classified as foreign-invested in this regard if:

Foreign investors possess 50% or more of the company; or

The majority of people in the management body can be appointed or removed by foreign investors.

The term “foreign investors” encompasses the following:

Individuals from other countries (regardless of their country of citizenship),

Commercial Enterprises from Other Countries (regardless of where they are incorporated or headquartered),

Associations, foundations, public institutions, non-profit organizations, and other foreign legal entities

Institutions of the international community

Foreign-invested Turkish firms can obtain full ownership or limited real rights to real estate in Turkey, as long as the acquisition is within the scope of their articles of association’s activities and aims.

However, when the real estate in question is located in particular zones defined by national security legislation, such corporations must acquire approval from the relevant authorities prior to the acquisition transaction.

To be more specific, full ownership or limited real rights in real estate located in I Military Forbidden Zones, (ii) Military Security Zones, and (iii) Strategic Zones require permission from army commanderships, while real estate located in (iv) Special Security Zones requires permission from governorates.

The above restrictions do not apply to foreign-invested Turkish enterprises in the following situations:

A mortgage has been set up in their favor.

The purchase was made as a result of a real estate mortgage foreclosure.

As a result of a merger or demerger, full ownership of real estate or restricted real rights thereon is transferred.

Special Investment Zones are where the real estate is located (e.g. Free Trade Zones, Organized Industrial Zones, Industrial Zones, Technological Development Zones, etc.)the property demand turkey

Banking Corporation is one such corporation, and the acquisition is undertaken in order to secure a loan or collect a debt.

Foreign-invested firms in Turkey, on the other hand, are not assumed to be foreign-invested companies within the definition of real estate purchase if foreign investors own less than 50% of the stock and are unable to control the company. As a result, such corporations are treated as if they were entirely owned by Turkish citizens, and they are free to acquire real estate and limited real rights.

(1) A province is divided into districts. Istanbul, for instance, is divided into 39 districts.