Comprehensive Guide to Real Estate Transactions in Turkey: From Deposit Payment to Title Deed Transfer and Citizenship Acquisition

Buying property in Turkey involves several steps that must be followed diligently to ensure a smooth and legally compliant transaction. This guide outlines each stage of the process, from the initial deposit payment to acquiring the title deed and, if applicable, securing citizenship.

1. Making the Deposit Payment

Selection of Property:

• After identifying the property you wish to purchase, a preliminary agreement is usually signed. This document outlines the basic terms of the sale, including the price, payment schedule, and any conditions agreed upon by both parties.

Deposit Payment:

• A deposit is typically required to secure the property and take it off the market. This deposit, often around 5-10% of the property’s value, demonstrates your commitment to the purchase.

Sales Agreement:

• A detailed sales agreement is drafted, including specifics about the property, payment terms, and timeline. This contract should be reviewed carefully, ideally with the assistance of a legal advisor, to ensure all terms are clear and legally binding.

2. Obtaining a Tax Identification Number (TIN)

Purpose:

• A Tax Identification Number (TIN) is required for various transactions in Turkey, including opening a bank account and paying taxes related to property purchase.

Process:

• Obtaining a TIN is straightforward and can be done at a local tax office with a copy of your passport. Some municipalities also allow you to apply for a TIN online.

Use:

• The TIN will be necessary for paying the property’s taxes, registering the purchase, and completing other legal steps.

3. Opening a Bank Account

Requirement:

• A Turkish bank account is often required, especially if the purchase involves financing or if the property developer or seller prefers payment to be made from a domestic account.

Procedure:

• To open a bank account, you’ll need your passport, TIN, proof of address (e.g., a utility bill), and sometimes a tax certificate from your home country.

Currency Considerations:

• You can open the account in Turkish Lira or in foreign currency, depending on your needs and the requirements of the transaction.

4. Property Valuation Report

Purpose:

• A property valuation report, prepared by a state-authorized company, assesses the market value of the property. This is especially important if you are purchasing property to qualify for citizenship.

Procedure:

• The report must be obtained before the title deed (Tapu) transfer can occur. It confirms that the property’s value meets the minimum investment threshold for citizenship, currently set at $400,000 USD.

Exceptions:

• Properties purchased from Real Estate Investment Trusts (REITs) are exempt from this requirement, as their sales prices are automatically accepted by the state as the official valuation.

5. Finalizing the Payment

Payment Schedule:

• Payments should be made according to the schedule outlined in the sales agreement. This may involve multiple installments or a lump sum payment.

Currency Exchange Certificate:

• Requirement: In Turkey, all real estate transactions must be conducted in Turkish Lira (TRY). Therefore, either the buyer or the seller must exchange the payment amount into Turkish Lira and obtain a Currency Exchange Certificate (Döviz Alım Belgesi).
• Buyer’s Responsibility: If you are exchanging the currency yourself (e.g., from USD, EUR, or another currency), you must do so at a licensed bank in Turkey, and the exchange must be processed through the Central Bank of the Republic of Turkey. Upon completion, you will receive the Currency Exchange Certificate.
• Seller’s Responsibility: Alternatively, if you pay the seller in a foreign currency, the seller must exchange the payment into Turkish Lira through a licensed bank and obtain the certificate. This certificate is a crucial document required for the title deed transfer process.
• Legal Compliance: Ensure all payments are documented, with receipts or bank statements confirming the transfer of funds and the acquisition of the Currency Exchange Certificate. This documentation will be crucial during the title deed transfer process.

6. Title Deed (Tapu) Transfer

Preparation:

• Once the full payment has been made and the valuation report obtained, the final step is the transfer of the title deed.

Title Deed Office:

• Both the buyer and seller must be present at the local Tapu Office to sign the official documents. An official translator may be required if the buyer does not speak Turkish.

Registration:

• The property is registered in the buyer’s name, and the new title deed is issued. This step officially makes you the legal owner of the property.

7. Acquiring Citizenship (If Applicable)

Citizenship by Investment:

• If your property purchase qualifies for citizenship, you can begin the application process once the title deed is transferred.

Application Process:

• Submit the required documents, including the property’s valuation report, proof of payment, Currency Exchange Certificate, and the title deed, to the Directorate General of Migration Management.

Approval:

• The citizenship application is reviewed, and if approved, you will receive your Turkish passport. This process typically takes several months.

8. Additional Considerations

Property Insurance:

• It’s advisable to purchase property insurance covering earthquakes and other potential risks.

Utilities and Maintenance:

• Set up utility accounts (electricity, water, gas) and, if applicable, arrange for property management services to maintain the property in your absence.

Annual Taxes:

• Be aware of the annual property tax, which must be paid each year. This amount varies depending on the property’s value and location.

9. Legal and Professional Assistance

Legal Advisors:

• It’s highly recommended to engage a legal advisor experienced in Turkish real estate law to guide you through the process and ensure all documents and transactions are compliant with local regulations.

Real Estate Agents:

• A reputable real estate agent can provide invaluable assistance in finding properties, negotiating prices, and navigating the legal landscape of Turkish property transactions.