Attorney Pınar KONAÇ - REAL ESTATE LAW

Introduction to Turkish Real Estate Law

Turkish Real Estate Law, governed by the Turkish Civil Code (Law No. 4721) and other specific legislation, provides a comprehensive legal framework for the acquisition, ownership, use, and transfer of real property in Turkey. This legal framework is designed to protect the rights of property owners, ensure the orderly development of real estate, and promote investment in the sector. Key principles of Turkish Real Estate Law include the recognition of private property rights, the registration of property transactions in the land registry, and the regulation of foreign ownership. The system ensures transparency and legal certainty, making it an attractive destination for both domestic and international investors. Additionally, various regulations address issues such as zoning, construction, and environmental protection, ensuring that real estate development aligns with broader social and economic goals. Understanding these laws is crucial for anyone involved in real estate transactions in Turkey.

Acquisition of Property

Acquiring property in Turkey involves several steps and legal requirements to ensure the transaction is valid and enforceable. The process typically includes the following stages:

Title Deed (Tapu) Search: Before purchasing property, a title deed search at the land registry office is essential. This search verifies the legal status of the property, ensuring there are no encumbrances, liens, or disputes.
Sales Agreement: Once the due diligence is complete, the buyer and seller sign a sales agreement (Satış Vaadi Sözleşmesi). This contract outlines the terms and conditions of the sale, including the price, payment schedule, and any other relevant details.
Official Transfer: The actual transfer of ownership occurs at the land registry office (Tapu ve Kadastro Genel Müdürlüğü). Both parties must be present, or represented by a power of attorney, to complete the transaction. The deed of transfer (Tapu Senedi) is signed and registered, officially transferring ownership to the buyer.
Payment of Taxes and Fees: Various taxes and fees are associated with property acquisition, including the title deed fee (usually a percentage of the property's value), value-added tax (VAT) for new properties, and other administrative charges. These must be paid to complete the transfer process.
Registration: The final step involves registering the new ownership at the land registry. This registration provides legal recognition of the buyer's ownership and is essential for enforcing property rights.

By following these steps, both domestic and foreign buyers can securely acquire property in Turkey, with the legal protections offered by the Turkish legal system.

Ownership and Title Deeds

Ownership of real estate in Turkey is evidenced by a title deed (Tapu), which is a legal document issued by the land registry office. The title deed contains crucial information about the property, including its location, size, boundaries, and the identity of the owner.

Types of Ownership: There are various forms of property ownership in Turkey, including sole ownership, joint ownership, and shared ownership. Sole ownership means the property is owned entirely by one individual. Joint ownership involves multiple owners, each holding an undivided share of the property. Shared ownership, on the other hand, divides the property into specific shares held by different owners.
Title Deed Types: Title deeds in Turkey can be categorized into two main types: full ownership and bare ownership. Full ownership grants the owner all rights to use, rent, sell, or transfer the property. Bare ownership means the owner holds the title but may not have the right to use the property, which might be granted to another party through a usufruct right.
Land Registry: The Turkish land registry system ensures that all property transactions are recorded and publicly accessible. This transparency helps prevent fraud and disputes by providing a clear and reliable record of ownership.
Title Deed Transfer: When transferring property ownership, the title deed must be updated to reflect the new owner. This process involves both parties appearing at the land registry office, where the transfer is recorded, and a new title deed is issued.

Having a clear and accurate title deed is crucial for establishing and protecting property rights in Turkey, ensuring legal certainty for all parties involved.

Property Rights and Obligations

Property ownership in Turkey comes with specific rights and obligations. Understanding these is essential for managing real estate effectively.

Rights of the Owner: Property owners have the right to use, rent, sell, mortgage, and transfer their property. These rights are protected by law, allowing owners to fully utilize and benefit from their property. Owners also have the right to exclude others from using their property, ensuring privacy and control over their assets.
Obligations of the Owner: Owners must comply with zoning laws, building codes, and other regulations that govern the use and development of property. They are responsible for paying property taxes, maintaining the property in a safe and habitable condition, and respecting the rights of neighbors and the community.
Easements and Usufruct Rights: Property in Turkey may be subject to easements, which are rights granted to others to use the property for specific purposes, such as access or utilities. Usufruct rights allow a person to use and benefit from property owned by another, typically for a specified period.
Restrictions on Use: Zoning laws and local regulations may restrict how property can be used. For example, certain areas may be designated for residential use only, while others may be zoned for commercial or industrial purposes. Compliance with these regulations is mandatory to avoid legal issues.

Understanding these rights and obligations helps property owners manage their assets responsibly and ensures compliance with Turkish laws.

Real Estate Transactions and Contracts

Real estate transactions in Turkey involve various contracts and legal procedures to ensure the validity and enforceability of agreements.

Sales Agreement: The sales agreement is the primary contract between the buyer and seller, outlining the terms and conditions of the property sale. It includes details such as the purchase price, payment schedule, and obligations of both parties.
Preliminary Contract: In some cases, a preliminary contract (Satış Vaadi Sözleşmesi) may be signed before the final sales agreement. This contract outlines the intention to sell and buy the property and sets the terms for the final agreement.
Notarization: While not all real estate contracts require notarization, it is often recommended to have contracts notarized to provide additional legal security. Notarization ensures that the parties' identities are verified and that the contract is legally binding.
Due Diligence: Before entering into a real estate contract, due diligence is crucial. This process involves verifying the property's legal status, checking for any encumbrances or liens, and ensuring compliance with zoning and building regulations.
Contract Execution: The execution of real estate contracts typically requires the presence of both parties or their authorized representatives. Contracts must be signed and witnessed, and in some cases, registered with the relevant authorities.
Legal Counsel: Engaging legal counsel is advisable for real estate transactions to ensure that all legal requirements are met and that the interests of both parties are protected.

By following these procedures, real estate transactions in Turkey can be conducted smoothly and legally, providing security and peace of mind to both buyers and sellers.

Taxes and Fees on Real Estate

Various taxes and fees apply to real estate transactions in Turkey. Understanding these costs is crucial for buyers and owners.

Title Deed Fee: A title deed fee (Tapu Harcı) is typically calculated as a percentage of the property's declared value. Both the buyer and seller usually share this fee, although the exact percentage can vary.
Value Added Tax (VAT): For new properties, VAT may be applicable. The rate depends on the type of property and its value. Residential properties generally have lower VAT rates compared to commercial properties.
Property Tax: Property owners must pay annual property taxes based on the assessed value of their property. These taxes fund local services and infrastructure.
Income Tax on Rental Income: Owners who rent out their property must declare rental income and pay income tax. The tax rate varies depending on the total rental income and other factors.
Capital Gains Tax: When selling property, capital gains tax may apply if the property is sold within five years of acquisition. The tax is calculated based on the profit made from the sale.
Notary Fees and Legal Costs: Notary fees, legal costs, and other administrative charges may apply, especially when notarization and legal representation are involved.

Understanding these taxes and fees helps property buyers and owners plan their finances and comply with Turkish tax regulations.

Foreign Ownership of Real Estate

Foreign nationals are allowed to purchase real estate in Turkey, subject to certain restrictions and procedures.

Eligibility: Foreign individuals and legal entities from countries with reciprocal agreements can purchase property in Turkey. There are restrictions on property purchases in military zones and certain rural areas.
Procedures: The process for foreign buyers is similar to that for Turkish nationals. It includes title deed searches, signing sales agreements, and registering the property at the land registry office.
Military Clearance: For properties located near military zones, foreign buyers must obtain clearance from the military authorities to ensure the property is not in a restricted area.
Financing: Foreign buyers can obtain mortgage loans from Turkish banks, subject to the bank's lending criteria and the buyer's creditworthiness.
Residency Permits: Purchasing property in Turkey can facilitate obtaining a residency permit. Property owners can apply for a short-term residency permit, which is renewable and can lead to long-term residency.
Legal Representation: It is advisable for foreign buyers to engage legal representation to navigate the property purchase process and ensure compliance with Turkish laws.

By understanding these aspects, foreign buyers can successfully invest in Turkish real estate and enjoy the benefits of property ownership in Turkey.

Conclusion

Understanding Turkish Real Estate Law is essential for anyone involved in the property market, whether domestic or international buyers. The legal framework ensures the protection of property rights, transparency in transactions, and compliance

with regulations. By following the correct procedures for acquisition, ownership, and transfer, property owners can secure their investments and enjoy the benefits of real estate ownership in Turkey. Legal counsel and due diligence are crucial in navigating the complexities of real estate transactions, ensuring that all legal requirements are met and that the interests of all parties are protected. With its robust legal system and attractive investment opportunities, Turkey remains a favorable destination for real estate investments.