Contact: Att. Sedef Ustuner; Erdem & Erdem (Turkey)
Amendments made to the Land Registry Law No. 2644 (“Law”) have been published in the Official Gazette dated 18 May 2012.
Acquisition of Immovable Properties (Land or Real Estate) By Foreigners
With the amendments made to Article 35 of the Law, the foreign national buyers -the list of eligible country citizens whom are to be determined by Council of Ministers-, are entitled to acquire on immovable properties or limited rights in rem in Turkey for improved international bilateral relations and where there is a feasible benefit to the country provided that statutory restrictive conditions are fully complied. The provisions, which lifted the existing “reciprocity principle”, introduced new concepts, “better international bilateral relations and feasible benefit to country” as the standard benchmark test for the acquisition of ownership rights on properties by the foreign natural persons. The amendments also expand the maximum size of immovable properties that can be acquired on a land and independent and continuous limited rights in rem, permissible to be acquired by foreign natural persons. As per the amendment, the maximum size cannot exceed ten percent of the surface area of a municipal province where the immovable in question is located and for each person it cannot exceed thirty hectares (equivalence to 74.12 Acres, or 328.000 Square Feet) within the country.
Authority of the Council of Ministers
The Council of Ministers is authorized to increase the size of area within the country permissible for each person, up to twofold.
Furthermore, the Council of Ministers is vested with authorization -in exceptional circumstances- to restrict, partially or fully cease or prohibit acquisition of ownership of a land in any form, on the bases of determinant factors i.e., personal, geographical regional, duration, quantity, quality, ratio, classification and size by foreign natural or legal persons (entities), which are established in foreign countries in accordance with laws of their origin countries.
Off-Plan (Pre-Construction) Immovable Properties
The foreign national real persons or incorporated companies which are established in foreign countries in accordance with laws of their origin countries, are obliged to submit the projects of an acquired property, that has yet to be built, for the approval of the relevant Ministry within two years. The projects approved upon the determination of beginning and completion dates shall be sent to the relevant Directorates of Land Registry for registration under the declaration columns. The relevant Ministry shall supervise whether the projects are completed within the determined time limits.
Acquisition by Foreigners of Areas Within Military Zones, Strategic Zones and Private Security Zones
The data relating to maps and coordinates of prohibited military zones, military security zones and strategic zones shall be provided within one year (at the latest) following the enforcement date of the Law and the amendment decisions shall be provided within one month (at the latest) following the date on which amendments made to maps and coordinates, by the Ministry of Defense to the relevant Ministry that the General Directorate of Land Registry and Cadastral is affiliated with.
The data relating to maps and coordinates of private security zones and amendment decisions on them shall also be provided within the aforesaid period by the Ministry of Internal Affairs to the relevant Ministry that the General Directorate of Land Registry and Cadastral is affiliated with.
Title deed transactions shall be conducted in accordance with the supplied documents and information upon the expiry of one year from the enforcement date of the Law.
Use in Violation of Article 35
The ownership rights acquired on a land may be ordered to be disposed within one year time limit granted by Chancellor, if: (i) the acquisition transaction is not compliant with the conditions set forth under Article 35 of the Law; (ii) the properties which were uncovered by the relevant Ministry or administrations to be used against their acquisition purposes; (iii) the off-plan properties, which are not notified to the relevant Ministry or the projects of which are not completed within the time limits; (iv) the properties are acquired by inheritance apart from the restrictions within the scope of the first subparagraph of Article 35. If the owner does not dispose the property within one year of the time limits granted by the Ministry of Finance, the State is entitled to exercise the right of disposal and the remaining sums after disposal shall be paid to the beneficiaries.
Acquisition of Immovable Properties by Foreign Investors
The conditions set forth under Article 36 of the Law, regarding acquisition of ownership rights on a land or use of limited rights in rem or immovables by the foreign investors in order to perform activities specified in articles of associations of the incorporated companies in Turkey, which they established or participated in, are amended. As per the amendment, foreign national natural persons and legal entities incorporated in accordance with legislation of foreign countries and incorporated companies established in Turkey, fifty percent or more shares of which are owned by international institutions or the authorization of assignment and release of majority of directors for which are granted to international institutions, can acquire ownership rights on a land.
The foreign capital companies apart from the foregoing shall acquire ownership on a land in accordance with the provisions envisaged for the domestic capital companies.
The use of immovable, acquired in accordance with Article 36 of the Law, shall be supervised by governorships at regular intervals within the frame of land registrations.
Use in Violation of Article 36
The ownership rights in any form acquired on immovable properties, which are not acquired or used in compliance with the conditions set forth under Article 36 of the Law shall be disposed and the sums shall be paid to the beneficiaries, if they are not disposed by the proprietors within the time limits granted by the Ministry of Finance.
Transfer by Inheritance
Pursuant to the new article in Law, the relevant Directorate of Land Registry shall apply to court for certificate of inheritance if transfer by inheritance is not registered within two years following the death of the proprietor.
The relevant Directorate of Land Registry shall update the record by registration of co-ownership in accordance with the certificate of inheritance.
Entry into Force
The amendments made to Article 36 will enter into force upon the expiry of three months and the other articles will enter into force on the publi cation date.
