Real Estate Regulation in Turkey
By Ferhan Yildizli, Financial Axis
Real estate investments are supported by Turkey in administrative regulation for foreigners. There are various advantages for investment that should be evaluated by investors. Therefore, these types of investments give opportunities such as:
The purchase of Turkish citizenship is possible both by way of birth and through later acquisitions.
With the decision of the President, there have been amendments to the “Implementation of the Turkish Nationality” regulation. The brandnew amendments are as follows:
- For three (3) years, property valuing USD 250,000 (or equivalent currency) must no longer be sold. The individual that owns the property, determined by the ministry of environment and urbanisation, can have the right to citizenship.
- By determining this example through the capital markets board of Turkey, the foreign person retaining a fixed capital investment or actual property mutual fund in the amount of USD 500,000 (or equivalent currency) or more, will have the proper criteria for citizenship.
- It is much easier to obtain citizenship with a real estate investment as of 19 September 2018, with the price of the asset at least USD 250,000.
The basic principles of VAT obligation in real estate acquisition of foreigners, which are summarised above, are based on Article 7 of Law No. 6824 on Restructuring Certain Claims and Amending Certain Laws and Statutory Decrees (“Law No. 6824”), published in the Offcial Gazette dated 08 March 2017. An exception has been made.
Accordingly, the conditions for benefiting from the mentioned exception are as follows:
- The exception is only valid for the delivery of buildings constructed as residences and workplaces.
- The exception will only be applied for the first delivery of the buildings in question.
- It must be brought to Turkey in exchange of cost.
Purchasing real estate does not require any VAT payment at the beginning. Only if the investor decides to sell this before one full year from the purchase date, selling procedures require payment of the VAT and any additional taxes before the property is sold to the third party.
Ferhan YildizliGGI member firm
Financial Axis Independent Audit & Consulting Inc
Corporate Finance, Fiduciary and Estate Planning, Law Firm Services, Tax
T: +90 312 428 1 444
Financial Axis has provided services in audit, tax, legal, and consultancy since 2000. The firm has vast expertise in data protection and capital markets. Their auditors are qualified CFA, CISA, CISM, CGEIT, CRISC and their lawyers are registered in the Turkish and New York bar associations.
Ferhan Yildizli is a PhD candidate in law, and he holds bachelor’s and master’s degrees in both international relations and law. He has also produced various publications on entrepreneurship and international trade. He provides consultancy services on real estate and e-commerce.
Published: Real Estate Newsletter, No. 12, Autumn 2020 l Photo: efesenko - stock.adobe.com