New rules – Buying a Property in Turkey
The Turkish Government has recently introduced a new regulation for foreigner property buyers and these changes are vital. These new rules – buying a property in Turkey are now affecting all prospective property buyers and sellers. According to the latest state circular, all foreign nationals who purchase property in Turkey must exchange their money with the Bank of Turkey, and they must obtain the Foreign Exchange Purchase Certificate and it must be submitted to the local Deed Registry Office along with your other documents.
Prior to the purchase, the sale price (declared value) needs to be deposited in your account with the Bank of Turkey and transferred into Turkish lira by the Bank of Turkey. You will then receive a Foreign Exchange Purchase Certificate which you can then present to the local Deed Registration Office. This certificate confirms the name, surname, passport number or foreign identity number of the person on whose behalf the foreign currency was exchanged, the US Dollar equivalent of the foreign currency purchased (TL equivalent is always included) and a statement stating that this transaction was carried out within the scope of Circular on Capital Movements.
Foreign Exchange Purchase Certificate
The circular is a very detailed government paper and discusses the Turkish Citizenship related requirements however, we have summarised it for those who wish to buy a property both with and without obtaining citizenship in Turkey.
Basically, if you are not residing in Turkey and your funds are coming from another country to Turkey for buying a property then you must follow these new rules.
If you are a seller and about to accept an offer from a foreign citizen then you are also affected by these changes. You will no longer be able to dictate receiving your money in another currency.
Step by step buying the property in Turkey
- Choose the property you wish to purchase first and find out the sellers’ situation.
- Choose a lawyer or a licensed real estate agent and initiate your legal search first.
- Get your Turkish Tax Number and open a bank account in Turkish Liras as well as one of the three currencies recognised by the state; English Sterling (GBP), American Dollars (USD) or EURO.
- If all is well with your chosen property, then ask your representative to organise a purchase & sales commitment agreement.
- Pay your deposit, remember that your deposit is fully refundable if there is any faults with the paperwork. This deposit amount is generally 10% of the total purchase value but can vary as per mutual agreement.
- A Home Report must also be obtained prior to your purchase. Please remember that the home report document is provided by a qualified property surveyor who is already registered with the local Deed Registration Office.
- It is time to transfer your funds. Do a Swift Transfer from your home bank to the bank account in Turkey. Please do not forget stating the reason for this transfer as it is extremely important and protects your funds. This is a new process and the banks are familiarising themselves with the fine tuning. Article 13 of the Circular of Actions has given this role to the banks in Turkey and staff training wil be ongoing for their clerks.
- Your bank will exchange this money with the Bank of Turkey however, only buyers, sellers or legal representatives can sign the exchange document. If you are giving power of attorney to a person in Turkey, you must make sure that they s/he has the rights in this document to carry out this role on your behalf.
- As a result of this you will be issued a Foreign Exchange Purchase Certificate and this document is required along with your other documents for initiating the purchase process with the Deeds Office.
- Your tax number/s, the Foreign Exchange Purchase Certificate, Home report, translated copies of your passport/s, the original POA (only required if someone is acting on behalf of you), Your mother and Father’s first names and a property buying form will have to be completed and handed in.
Although it may seem daunting, new procedures can often be so, it is actually straight forward and similar to property buying processes in many European countries. We are more than happy to assist you with your enquiries and with this purchase process if you contact us.
We await your enquiry and our team member are ready to assist you.