In Turkey, the Ministry of Environment and Urbanization has regulated the principles, procedures and conditions of purchasing a property in Turkey by foreigners in the Land Registry Law (“LRL”), No.2644. Previously, foreign individuals could only purchase a property in Turkey if their own country allowed Turkish citizens to purchase a property there (“the reciprocity principles”). The reciprocity principle is abolished with latest amendments to the LRL. The current principles regarding acquiring a property/limited rights in rem by foreigners are explained in detail below.

How is the property transferred in general?



Transfer of the ownership of a property is made with an official deed and registry at the Land Registry Directorate. The seller and the buyer have to submit an application with necessary documents to the Land Registry Office in the area where the property is registered. Following the application, the seller and the buyer have to pay certain fees arising out of the transfer.

If the Land Registry Directorate rejects the application concerning purchasing a property, this decision can be appealed to the relevant Regional Office of the Land Registry Directorate. If the Land Registry Directorate approves this application, both the buyer and the seller have to be present at the Land Registry Directorate to perform the sale transaction.

Choose the most profitable possibility for purchasing property in Turkey!

Before purchasing a property within Turkish soil, foreigners shall engage in comprehensive consultation to find the right approach. Relevant articles (Article 35 -36) of the LRL specify the implementation concerning purchase of a property by foreign investors shall be reviewed carefully to find the most profitable possibility.

Accordingly, for foreign individuals there are some restrictions during purchase of a property in Turkey that need to be taken into consideration. Besides, the Council of Ministers has been provided with a significant and strong authority concerning some restrictions for purchasing a property in Turkey.

Companies established according to the Turkish laws can acquire a property or limited rights in rem if such an arrangement stipulated in their articles of association.

It shall be noted that foreign individuals and foreign companies shall consider special areas (territorial limitation) as military forbidden zone, military security zone. According to Article 36 of the LRL, without prejudice to the provisions of Law on Military Forbidden Zones and Military Security Zones (No: 2565), if a property is acquired within military forbidden zone, military security zone, a necessary permit is required from relevant authorities in order to acquire this property.

Finally, real estate investment trusts have been defined in the Communique regarding the Real Estate Investment Trusts (Gayrimenkul Yatırım Ortaklıklarına İlişkin Esaslar Tebliği (III-48.1)). The important matters relating to this are explained below.

As can be seen, there are certain important points that need to be taken consideration relating to foreign individuals, foreign companies and Turkish companies wholly or partially owned by foreign individuals or foreign legal entities.

I. Individuals

According to the LRL, foreign individuals can purchase any kind of property (house, business place, land, field) and/or acquire limited rights in rem within the restrictions.

• The total area of properties and limited rights in rem acquired by foreign individuals should not exceed % 10 of the total area of the district/town of private properties and 30 hectares per person in Turkey in total.
• If foreign individuals are willing to purchase a property without construction (land, field), they have to submit a project which they will construct on this unstructured property to the relevant Ministry within 2 years.

In light of Article 35 (1) of the LRL, the Council of Ministers is entitled to determine the citizens of the countries, foreign national real persons, who can acquire a property and limited rights in rem in Turkey. Also the Council of Ministers has been provided with the authority to determine, restrict, wholly or partially suspend or prohibit the acquisition of property or limited rights in rem made by foreign individuals and/or legal entities on the basis of country, person, geographical region, duration, number of acquisitions, proportion, quality, area and quantity.

Foreign nationals are taxed in Turkey on income. According to the Real Estate Tax Law numbered 1319,

• Due to the transfer of the property’s ownership, the new buyer has to submit the property tax declaration to the relevant municipality.
• In case of non-payment of the property tax, the new owner and the former owner of the property will be jointly or severally liable for the tax debt.

Foreigners who wish to purchase a property in Turkey don’t need to have a residence permit. Purchasing a property does not provide foreigners with a residence or work permit in Turkey. However, it shall be considered that who wish to purchase a property in Turkey and does not have a residence permit needs to obtain a foreigner identity number from the Turkish National Police Foreigners Department.

II. Legal Entities with foreign investors

The principles and procedures relating to the legal entities with foreign investors are specified in Article 35 – 36 of the LRL. Accordingly,

• Article 35 of the LRL clarified that only commercial companies which are established according to the laws of its state have the legal personality and can acquire a property in Turkey.
•  Article 36 of the LRL applies only to the Turkish companies which are established according to the Turkish law in Turkey.

Foreign companies are taxed in Turkey on capital gains with certain arrangements according to the Corporate Tax Law, No: 5520

There can be international bilateral agreements between the Republic of Turkey and another country, regarding the avoidance of double taxation and/or the prevention of fiscal evasion.

A. Turkish companies which are established in Turkey, wholly and partially owned by foreign individuals or foreign legal entities

In light of the LRL, foreign individuals and/or foreign legal entities can establish a company, such joint stock company, limited liability company, unlimited liability company, commandite company, cooperative company which are registered to Turkish Trade Registry. As follows;

-The unlimited liability company under the TCC can be established by individuals who have unlimited responsibilities for receivables of company’s creditors.

-The commandite company under the TCC has shareholders with limited liability and also with unlimited liability. The shareholders with unlimited liability has to be individuals. Contrary to this, legal entities can be shareholders only with limited liability.

-The joint stock company under TCC is responsible for its debts only with its assets. The shareholders of such company are liable with their shares to the company.

-The limited liability company under TCC can be established by one or more individuals or legal entities who are not liable for company’s debts. The shareholders are liable only to pay their shares and fulfil the obligations relating to supplementary payment and subsidiary performance, if company’s articles of association states with regard to this.

-The cooperative company under the Cooperatives Law, No: 1163 can be established by individuals or legal entities with exchangeable shareholders and exchangeable capitals.

-Those companies are owned wholly or partially by foreign individuals or foreign legal entities. Because the company’s nationality is different from its shareholders’ nationalities, such companies shall not be regarded as foreign companies.

-A special permission shall be provided by Trade Registry Directorate for joint stock companies, limited liability companies, unlimited liability companies and commandite companies which have 50 % or more direct or indirect foreign capital, in order to purchase a property.

-Real estate investment trusts (“REIT”) are regulated in the Communique regarding the Real Estate Investment Trusts (Gayrimenkul Yatırım Ortaklıklarına İlişkin Esaslar Tebliği (III-48.1)) by the Capital Markets Board, and established according to the Turkish laws.

The aim of REITs is to invest in properties, projects based on properties, to earn rental income from properties on its portfolio and income on purchase and sale of its properties.

By REIT’s nature, they have to invest in properties, properties projects and rights at the rate of at least 50 % of its portfolio. According to Corporation Tax Law, the REIT’s incomes are excluded from the corporation income tax.

            Article 36 of the LRL states the principles and conditions relating such companies established in Turkey by foreign individuals or legal entities which can acquire property or limited rights in rem in Turkey in order to perform their business purposes defined in their articles of association. This principle is also valid if a foreign company purchases the shares of the domestic company which owns properties. It shall be underlined that Article 35 of the LRL will apply to the foreign shareholders of the company.

B. Foreign companies which are established in foreign country

According to Article 35 of the LRL, foreign companies which are established according to the relevant law of their country laws are allowed to acquire property and/or limited rights in rem within the special laws (such Petroleum Law, No: 6491, Law on Encouragement of Tourism, No: 2634, Law on Industrial Territories, No: 4737, Privatization Law, No: 4046, ). Those companies can acquire property or limited rights in rem only with the scope of the abovementioned special laws.

According to the TCC, if a foreign based company is willing to open a branch in Turkey, the locations of head office and its branch and an indication relating to the branch have to be stated in the trade name of company.