New legislation regulating the foreigners' acquisition
of property in Turkey is being drafted. Here is what it entails...

Turkan Al / AA (Excerpt from Milliyet newspaper of 18.5.2005, Translated by Yesim Soyel, Turyap Foreign Affairs Coordinator)

Pursuant to the constitutional ban on the subject, certain restrictions on the foreigners' acquisition of property will be imposed. Following on from the constitutional ban of the Act which facilitated foreigners' purchase of property, the Commission formed to formulate the new regulation has now prepared a draft. The work coordinated by the Land Registry Directorate General and contributed to by the representatives of relevant organizations has taken the justifications of the constitutional ban into account.

The draft that will replace the relevant section of the Land Registry Act (Tapu Kanunu) will be imposing certain restrictions to the foreigners' acquisition of property in Turkey. It will be decreed that foreigners may acquire plots and land only within the municipalities and the contiguous boundaries; it will also introduce restrictions on the buildings and structures that may be sold within village boundaries. Likewise, the Council of Ministers is also endowed powers with which they may leave certain areas significant in terms of irrigation, energy sources, agriculture, mining and historical sites outside the scope of sales to foreigners.

NO SALE EXCEEDING 10.000 SQM

According to the draft on which the bureaucrats are currently working and which will be finalized by the Council of Ministers – as long as there is reciprocity and the legal restrictions are honoured -, foreign real persons and foreign companies formed in accordance with the legislation of their respective countries will be able to purchase buildings and structures constructed independently on the immovables as well as individual units, plots and land which have been assigned with private ownership in accordance with Act 634 located within the municipality zones and the contiguous zones in the Republic of Turkey.

The amount of property to be acquired is limited to 10.000 sqm across Turkey.
Foreigners shall not be able to acquire plots and land outside the boundaries of municipalities and contiguous zones. The buildings and structures as well as the individual units constructed that may be purchased outside these zones shall not exceed 1000 sqm.
In the implementation of the reciprocity principle, decisions will be based on whether the country in question bestows the same property acquisition rights to Turkish citizens and companies as it does to its own citizens and/or companies formed in accordance to the legislation of the concerned country.

PERMISSION OF THE COUNCIL OF MINISTERS

The Council of Ministers' permission shall be sought (required) if foreign real persons and foreign companies wish to purchase properties over 10.000 sqm within the boundaries of municipalities and the contiguous zones as well as properties over 1000 sqm outside the said zones. This rule shall not apply in the case of properties transferred by inheritance.
The Council of Ministers' permission shall also be sought where properties above the threshold would be transferred through death related acquisitions that fall outside the scope of legal inheritance. If the concerned permission is not granted, the exceeding amount shall be transferred (sold) and the relevant sum shall be paid.
Where citizens of countries which do not have reciprocity with Turkey acquire property through legal inheritance, properties shall be liquidated and the proceeds shall be paid to the concerned people.
In granting limited rights on properties to foreign real persons and companies, again the reciprocity principle and compliance with the legal restrictions shall be sought. Assigning of a mortgage on the property will be an exception to this article.
The Council of Ministers has the power to decide that the above provisions will not be implemented on the sale of places significant for irrigation, energy sources, agriculture, mining and historical sites – with the proposal from relevant bodies.

WHAT DID THE OLD REGULATIONS ENTAIL?

The article that was banned ensured that foreign citizens and companies acquired property in Turkey as long as the reciprocity principle was in place and the legal restrictions were honoured.

This legislation which did not have any limitations regarding municipalities and the contiguous zones ruled that the sale of land over 30.000 sqm to foreigners was subject to the approval of the Council of Ministers. The concerned article said that “the Council of Ministers is authorised to define the places where this article would not apply taking the public interest and the safety of the country into account”.

The current draft restricts the property acquisition to municipalities and contiguous zones; it also reduces the land to be sold from 30.000 sqm to 10.0000 and to 1000 for buildings within villages.

Furthermore, it defines the powers of the Council of Ministers in relation to the restrictions it can impose on foreigners' acquisition of property.