Introduction

Acquiring Turkish citizenship through the acquisition of immovable property has been on the agenda with the idea of stimulating local economic activity, encouraging foreign investment and contributing to states’ growth targets. Since the acquisition of immovable property and acquiring citizenship are regulated as exceptional cases in Turkish Law, it is only possible within the prescribed limits. With the Presidential Decree dated 19 September 2018 and numbered 106, foreign real persons who acquire immovable property in the amount of “at least 250,000.00 American Dollars or equivalent in foreign currency or equivalent in Turkish Lira” were allowed to acquire Turkish citizenship.

The Legal Framework

Pursuant to Article 35 of the Land Registry Law No. 2644, real persons of foreign nationality determined by the President were allowed to acquire immovable property and limited real rights in Turkey. Under the amendment made by Law No. 6302 dated 18 May 2012, the condition of reciprocity was abolished for citizens of 183 countries in terms of this kind of acquisition, and provided that legal restrictions have been followed, all kinds of immovables have become purchasable in our country.

When Article 12 of the Turkish Citizenship Law No. 5901 (“TCL”) and subparagraph (j) of the first paragraph of Article 31 of the Law No. 6458 on Foreigners and International Protection (“LFIP”) are evaluated together, it is possible for foreign real persons who invest in accordance with certain conditions to acquire exceptional Turkish citizenship.

Article 20 of the Regulation on the Implementation of the Turkish Citizenship Law (“Regulation”) numbered 2010/139, that regulates the conditions of investment in the exceptional acquisition of Turkish citizenship, has been amended by the Presidential decree numbered 106 published in Official Gazette dated 19 September 2018 and, by reducing the monetary value required, it has become easier to acquire exceptional Turkish Citizenship.

In order to acquire citizenship through the acquisition of immovable property between 12 January 2017 and 18 September 2018, the value of a purchased immovable had to be at least USD 1,000,000.00 or the equivalent in foreign currency or Turkish Lira. With the change made on 19 September 2018, the amount relating to the value of the immovable was reduced to USD 250,000.00 at minimum or its equivalent in foreign currency or Turkish Lira. Provided that they fulfill all the relevant conditions, it has become possible for foreign real persons to apply for Turkish citizenship with a preliminary sales contract drawn up in the presence of a notary public for immovables with construction servitude or condominium ownership.

It should be emphasized that immovables purchased before the first regulation dated 12 January 2017 cannot be subject to the acquisition of Turkish citizenship.

General Overview

Following the latest amendments, in accordance with Article 20 of the Regulation foreign real persons will be able to acquire Turkish citizenship:

1. With the purchase of an immovable property worth at least USD 250,000.00 or the equivalent in foreign currency or Turkish Lira, including an annotation that it will not be sold for three years, or
2. Issuance of a notarized preliminary sales contract for an immovable which has condominium ownership or construction servitude and at least USD 250,000.00 or equivalent foreign currency or Turkish Lira has been lodged in advance with an undertaking not to assign or cancel the immovable property.

The acquisition of an immovable property by a foreign real person in order to acquire Turkish citizenship must be personal. Since the acquisition of immovable property on behalf of someone else or a legal entity such as a company of which a person is a partner/manager is not considered within the scope of the Regulation, it is not possible to apply for  Turkish Citizenship. In other words, acquiring exceptional citizenship by purchasing an immovable is only valid for immovables purchased by a real person. Foreigners who are managers/partners of a foreign-owned company cannot apply for citizenship with an immovable purchased on behalf of the company.

In cases in which the acquisition of immovable property is subject to a sales transaction, there is no obstacle to making the payment in installments. Even if the title deed transfer was made after 19 September 2018, payments made after 12  January 2017 will be taken into account by calculating the exchange rate and will be considered valid.

Payments relating to preliminary sales contracts will be taken into account as of 7 December 2018, the last date of the change. As of this date, prior to the issuance of a contract at the notary public and on the day of signing the latest contract, USD 250,000.00 or its equivalent in foreign currency or Turkish Lira must be paid in advance. Payments made after the contract signing date will not be considered as “cash payment” and will not be considered valid.

If the immovable/immovables meet the required valuation on the dates specified in the Regulation, not to sell for a period of three years in the sales transactions by the Land Registry Directorates; also, in the case of preliminary sales transactions, an undertaking not to transfer/abandon for a period of three years must be taken and an annotation must be made in the immovable’s land registry. Based on this undertaking, the Land Registry Directorates send the relevant documents to the competent authority to issue a certificate of conformity. The Certificate of Conformity is issued by the Foreign Affairs Department of the General Directorate of Land Registry and Cadastre, which is affiliated with the Ministry of Environment and Urbanization.

 The purchase procedure can be conducted by proxy, by stating that the proxy is authorized to make an undertaking or that the aim of the acquisition of the immovable property is to acquire Turkish citizenship

Nature of the Property

In cases where an immovable property is acquired through a sales contract, there is no limitation in terms of the quality of the immovable (housing, land, place of business, field, etc.) However, if the acquisition is to be realized with a preliminary sales contract, condominium ownership or construction servitude must have been established on the relevant immovable. Before 7 December 2018, the only immovables that could be purchased were those with a previously established and completed condominium. With the most recent change, it has been made possible for a building whose construction has not been completed yet to be acquired for the acquisition of Turkish Citizenship.

Under the circular numbered 2013/15 (1752), Land Registry Directorates request an undertaking submit the proposed development in unstructured immovable acquisitions (land, field, garden, etc.) for the approval of the relevant Ministry within two years. Although there is no obstacle for more than one immovable to become the subject of a sale or preliminary sale, it is required that the total value of these immovable(s) must meet the minimum amount (USD 1,000,000.00 or USD 250,000.00) in terms of the dates specified in accordance with the Regulation and bear an annotation not to be sold for three years.

At the same time, an application can also be made if the total value of the immovables purchased at different times and in different places meets the minimum amount.

In terms of immovables purchased as shares, the share value subject to the acquisition should be USD 1,000,000.00 for  immovable property purchases between 12 January 2017 and 18 September 2018, and USD 250,000.00 for immovables purchased after 19 September 2018. In other words, the fact that an immovable value meets the minimum amount, for immovables purchased as shares it is not considered sufficient for the acquisition of Turkish citizenship.

An immovable acquired by a foreign real person should not be registered in the land registry on behalf of a company legal entity of which the foreign real person is the partner or manager.

In cases where  immovable property is purchased with a loan, the value of USD 250,000.00 required in the Regulation must be met with the remaining portion after deducting the loan amount from the sales price.

Limitations

Primarily, a foreign real person who wants to acquire Turkish citizenship must meet all the conditions in terms of nationality and legal restrictions.

In accordance with these restrictions, a foreign real person:

1. May purchase a maximum of 30 hectares of immovable property in our country and acquire limited real rights,

1. May acquire immovable and limited real rights (including mortgages) up to 10% of the district area that is available for private ownership,

1. May purchase immovables that are in Special Security Zones only with the permission of the Governorship or can draw up a preliminary sales contract.

Immovable property must not be located in military prohibition and security zones. The clarity of whether an immovable is located in a military forbidden and security zone is provided by the Land Registry Offices.

Valuation

The value of an immovable must be disclosed with three separate documents and the value shown on each of these documents must meet the required USD 1,000,000.00 or USD 250,000.00 on the dates specified in the Regulation.

The documents relating to immovable property are as follows:

-Sum of the sales price(s) declared in the official deed and/or the value(s) determined in the preliminary sale,

– Value/sum of values in the valuation report,

-Bank receipt, which involves sum of payments showing fee transfers.

In the previous regulations, there was a requirement for the price in the official promissory note to be higher than the price determined in accordance with the valuation report. However, pursuant to the new regulation, since both the price in the official deed and the value determined in accordance with the valuation report must meet the value of USD 1,000,000.00 or USD 250,000.00 respectively on the dates determined in the Regulation, the condition that the price in the official deed must be higher than the valuation report is no longer required.

Valuation Report

A valuation report is the document that shows the current market value of an immovable property according to the date of acquisition. This document is issued by immovable appraisal companies authorized by the Capital Markets Board (“CMB”) and the Banking Regulation and Supervision Agency (“BRSA“) to determine the value before the real estate is purchased.

A valuation report, pursuant to the Circular No. 2019/1 on Searching for Valuation Reports in the Acquisition of Immovable by Foreigners is valid for three months from the date of issue. If an application is made within this three-month period, it is considered valid until the process is completed. If the valuation report is not received before the acquisition of an immovable, a valuation report that accounts for the acquisition date of the immovable(s) will be requested.

Exchange Rate

If the purchased real estate is paid for in Turkish Lira, the effective selling rate published by the Central Bank of the Republic of Turkey (“CBRT”) is taken into account on the last business day before each payment day for the US Dollar equivalent of the bank receipts.

In determining the Turkish Lira value of an immovable property subject to a valuation report in US Dollars, the effective selling rate of the CBRT on the last business day before the report date is taken as the basis.

While assessing a value in US Dollars of official deeds and preliminary sales contracts drawn up in Turkish Lira, he effective sales rates of the CBRT on the day a sale application is made or the workday before  a notarized preliminary sales contract is drawn up is used.

If there is more than one receipt with different dates, there may be a currency difference in finding the equivalent of the official deed value or the Turkish Lira value determined in the preliminary sales contract in American Dollars. In this case, based on the CBRT’s effective selling rate of the last business day before each payment day, the official deed value, or the Turkish Lira value determined in the preliminary sale contract is calculated in American Dollars. The sum of these value(s) must not be less than USD 250,000.00.

The transfer of an immovable property’s sales price can be done in foreign currency or its equivalent in Turkish Lira, from a foreign country, or through banks in Turkey. Approval is required by the banks with a receipt showing that the document relating to the sale price has been sent by the person who purchased the immovable. Accordingly, payments made by hand are not considered valid.

Transactions Between Foreigners

Immovable properties subject to sale or preliminary sale for the acquisition of Turkish citizenship should be registered to a Turkish citizen in the land registry. Since the acquisition of immovable property for the acquisition of Turkish citizenship is the basis of the investment, the acquisition of immovables registered in the name of foreign real persons will not be considered as an investment and cannot be the subject of an application for the acquisition of Turkish citizenship.

In order for a foreign real person to acquire Turkish citizenship by acquiring immovable property, the relevant immovable must not have been transferred to a Turkish citizen/company after 12 January 2017 by the foreign real person himself, his wife, and children or another foreign real person of the same nationality. However, if the immovable has been transferred from a foreign real person to a Turkish citizen/company after 12 January 2017, a foreign real person of a different nationality may purchase the relevant immovable to acquire citizenship.

Pursuant to the latest changes made in the Circular numbered 2019/5 on 22 March 2021, an immovable or immovable share that has previously been subject to the acquisition of Turkish citizenship by a foreigner cannot be subject to the acquisition of citizenship by another foreign real person. This regulation aims to ensure that only a single foreigner can acquire Turkish citizenship through a specific immovable.

If a foreign real person owns a share in an immovable, their shares are not taken into account in the determination of the immovable’s value.

Even if foreign real persons have acquired Turkish citizenship through the acquisition of immovable property:

– They will be considered as foreigners until the undertaking not to sell the immovable for three years is lifted,

-They will not be able to sell their immovables during this period.

Application for Citizenship

Residence Permit

According to the Regulation subparagraph (j) of the first paragraph of Article 31 of the LFIP, states foreigners who apply for Turkish citizenship by investing must obtain a short-term residence permit. A Certificate of Conformity must be obtained, to apply for a residence permit.

Applications for residence permits are made to the Directorate General of Migration Management.

Acquiring citizenship through the acquisition of immovable property is one of the special types of residence organized for the acquisition of Turkish citizenship by investment, on average, it is completed within two weeks.

Relevant persons will be able to apply for Turkish citizenship only after obtaining a short-term residence permit.

Application Procedure  

After all the conditions mentioned above are fulfilled, the necessary documents for the application for Turkish citizenship are collected and sent to the governorship (Provincial Directorate of Population and Citizenship) where the place of residence is located. In practice, this process happens in three to six months.

In addition, a foreigner who has applied for the acquisition of Turkish citizenship in an exceptional way can also apply for their spouse and children under the age of 18. Other family members are not required to apply for a residence permit or make an investment.

Transactions such as obtaining a certificate of eligibility, applying for a short-term residence permit, receiving a residence permit card, and submitting the necessary information and documents for the citizenship application can be carried out with a special power of attorney. It is not a necessity for the foreign real person to come to the country. However, at the last stage of the application, the applicant,  the spouse and child/children under the age of 18, on whose behalf the application is made, must be present at the nearest civil registry office to give fingerprints and to obtain their Turkish citizen ID and passport.

The citizenship application is evaluated by the relevant Ministries and submitted for the approval of the President who makes the final decision on the application.

Conclusion

Citizenship has begun to be used as a tool to serve the workforce and economic policies of the states, and regulations have been made in many countries regarding its acquisition based on investment. In Turkish Law, Turkish citizenship can be acquired exceptionally in accordance with the fact that immovable(s) meet the required value on the dates specified in the Regulation. For this reason, the demand for foreign real persons to acquire immovable property in Turkey is increasing day by day. Although the process has been simplified for the acquisition of Turkish citizenship, applications are rejected for missing documents or errors. Therefore, it is crucial to follow the process correctly to ensure the necessary conditions are met and applications are complete

Av. Beliz ÖZKAN

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[1] https://www.invest.gov.tr/tr/investmentguide/sayfalar/acquiring-property-and-citizenship.aspx

[2] https://www.spk.gov.tr/SiteApps/EVeri/Detay/gds

[3] https://www.tkgm.gov.tr/iste-mart-2020-konut-satis-istatistikleri