REAL ESTATE ACQUISITION BY FOREIGN REAL PERSONS IN TURKEY
RECIPROCITY PRINCIPLE

REAL ESTATE ACQUISITION BY FOREIGN REAL PERSONS IN TURKEY

Real estate acquisition by foreign real and legal persons has been regulated in the article 35 of the Land Registry Law numbered 2644 with law numbered 5444 and dated December 12,2005 which was published in the Official Gazette of 26046 numbered and dated January 7,2006. New fundamental principles were regulated with this new law for acquisition of real estate by foreign real persons and trade companies having a legal personality and established in foreign countries according to the laws of these countries in Turkey. Articles New form of the article 35 of the Land Registry Law is as follows: "With the reservation of reciprocity and compliance with legal restrictions, a foreign real person can acquire real estate for the purposes of using as residence or business aims in Turkey that are separated and registered for these purposes in the implemented development plans or localized development plans. The same conditions shall be stipulated in the establishment of limited real rights on real estate. The total area of the real estate and limited real rights on real estate that a real person of foreign nationality can acquire all over the country can not exceed 25,000 m2. Within the same conditions set out in this paragraph Council of Ministers is authorized to increase the area up to 30 hectares. Companies having a legal personality established in foreign countries according to the laws of those countries can acquire real estate and limited real rights on real estate in Turkey according to the provisions of special laws.

In the case of establishing a mortgage in Turkey in favor of foreign real persons and trading companies having legal personality established in foreign countries according to the laws of those countries the conditions and restrictions set out in first and second paragraphs shall not be applied. With the exception of foreign real persons and trading companies having a legal personality established in foreign countries according to the laws of those countries, no one can acquire real estate and limited real rights on real estate in Turkey.

For the real estate acquired through legal inheritance by citizens of a country that have reciprocity with the Republic of Turkey, the conditions and restrictions set out in the first paragraph shall not be applied. For the real estate acquisition by means of transactions depending on death apart from legal inheritance, the conditions and restrictions set out in the above paragraphs shall be applied. Real estate and limited real rights on real estate acquired through legal inheritance by citizens of countries that do not have reciprocity with the Republic of Turkey shall be liquidated after their transfer transactions are performed.

De jure and de facto circumstances shall be taken as the basis in determination of reciprocity. In implementation of this principle for the citizens of countries that have not granted land ownership rights, it´s stipulated that the rights granted by a foreign country for real estate acquisition to its own citizens should also be granted to citizens of the Republic of Turkey.

The Council of Ministers is authorized to determine the places where foreign real persons and trading companies having a legal personality established in foreign countries according to the laws of those countries cannot acquire real estate and limited real rights on real estate within the areas in terms of irrigation, energy, agriculture, mining, and protected areas, and belief and cultural featured areas and special protection areas and untouched areas due to flora and fauna features, strategic areas due to public interests and country security by means of the proposals of relevant public institutions and organizations with registry based coordinated maps and plans, and the rate of the areas where foreign real persons can acquire real estate of not more than 5 per cent according to the provinces and provinces´ areas. Proposals of the public institutions and organizations within these scope shall be examined, appreciated and submitted to the Council of Ministers by means of a commission that carries out studies within the authority set out in this paragraph and constituted of relevant representatives of administration in the structure of the Ministry that the General Directorate of Land Registry and Cadastre is related to.

Map and coordinate values concerning the military forbidden zones, military and private security zones and strategic zones that are determined after the enforcement of this law and their alterations shall be given without any delay by the Ministry of National Defense to the Ministry that the General Directorate of Land Registry and Cadastre is related to. The parcels needed to be expropriated or to be annotated on the land register due to be in the areas determined in the above paragraphs shall be notified by relevant institutions to relevant Land Registry Offices.

The real estate and limited real rights on real estate acquired contrary to the provisions of this article or determination of misuse according to the purpose of acquisition without legal necessity shall be converted to value and paid to the owner of of said real estate unless the real estate is liquidated by the owner within the period given by Ministry of Finance."

Lawyer Nevin CAN

RECIPROCITY PRINCIPLE

In the new regulation, instead of exact equivalent implementation of the reciprocity principle, it´s stipulated that the rights given by a foreign country to its own citizens or trade companies having legal personality and established according to its own laws, should also be given to citizens and trade companies of the Republic of Turkey.

The Council of Ministers expressed what should be understood from the reciprocity principle in its decision dated May 29, 1940 and numbered 2/13394. According to this decision, in addition to legislative regulation of the reciprocity principle, practical applicability of it is also required for its existence. By this decision, in which it´s taken into consideration that reciprocity in law will not indicate an actual situation, restrictions encountered in a foreign country by the citizens of the Republic of Turkey, in case of their application, are wanted to be taken as a basis in implementation of reciprocity. Therefore, for the existence of reciprocity between our country and a foreign country about real estate acquisition, reciprocity must be both in law and in practice. According to this principle, for real estate acquisition of a foreign country´s citizen or trade company in our country, the citizens and trade companies of the Republic of Turkey should also have the right to acquire real estate in this foreign country and this right must be accepted by laws and must be practically applicable.

Lawyer Nevin CAN