Turkey, noting significant progress with its developing economy in recent years, investments in construction and real estate sectors, is becoming a center of attraction for institutional and individual investors. In this process, the country offers significant opportunities to foreign investors who need to master local dynamics to make successful investment decisions. As Trem Global team, we are closely following developments in order to provide support to investors in real estate acquisition and investment issues, which are highly dependent on internal and external factors and have unique problems, with our experienced and industry-dominated staff. In order to meet the needs of our customers in Turkey, and to help them achieve successful results in investment decisions we present Real Estate Acquisition and Investment Guide in Turkey to the investors, where we provide sector-specific knowledge. The information in this guide is general, not social, tax or legal advice.
Sale of Real Estate
There is no distinction or exception to foreign nationals or Turkish citizens in the sales of real estate. In the real estate acquisition phase, real estate sales can be made except for foreign nationals who are citizens of some countries (Syria, Armenia, Cuba, Israel, and Cyprus) mentioned in the title of "Who Can Get Real Estate in Turkey?"
Income Tax on Real Estate Sales
After the sale of real estate, the people who made the sale pay income tax on earnings. If the real estate is held for less than 5 years, the increase in value during the disposal of the real estate is subject to income tax.
If the real estates obtained through donation or inheritance or not an equivalent to value or even if a value for money has been acquired, the value increases obtained after the disposal of the real estate after 5 years of holding are not subject to tax.
Capital Gain Taxation in Real Estate Sales
Real persons who gain value surplus due to their real estates after the sale of real estate declare their income with income tax declaration annually. The tax base is calculated by subtracting the real estate acquisition value from the sale price. If this difference is positive, it is declared and if it is negative, it is not declared. The determination of the taxable income is determined by deducting the real estate acquisition value as well as the expenses and taxes incurred as a result of the disposal and remaining under the responsibility of the seller, from the sale price. The acquisition value is increased by the said increase rate if the increase in the Producer Price Index is 10% or more in the period between purchase and sale. This is called cost indexing in the literature.
For the year 2019, TL 14,800 of the capital gains obtained during one calendar year is exempt from income tax. As a result, if there is a difference between the purchase and the sale below this amount there is no need to declare.
Title Deed Fee After The Sale of Real Estate
2% of land registration fees are paid when disposing of real estate in Turkey. This rate is applied until 31 December 2019 by decreasing to 1.5% in housing and business deliveries. The deed fee calculated over the sale price is charged separately from the real estate buyer and seller. Before going to the land registry office, the land registry fee must be paid to the tax office before proceeding with the registry officer.
Value Added Tax on Real Estate Sales
If the buyer of the real estate is constantly engaged in the purchase and sale of real estate during the sale phase, the value added tax is applied to the sale price as it makes a commercial gain. VAT is not applied to real persons who acquire the property for their own use and do not earn commercial gain by continuously trading. If the Ministry of Treasury and Finance detects multiple sales within a calendar year or successive sales in the following years, natural persons are classified as merchants and value-added tax is applied to the sales to be made by the merchants.
Tax Liability of Real Estate Owners
1.1. The Procedure of Acquiring Turkish Citizenship through Investment
Limits to be paid for transitions to Turkish citizenship are reduced thus foreigners who buy real estate worth at least 250.000 USD can become Turkish citizens.
Application Process for Turkish Citizenship
At least a purchase of real estate worth $ 250,000 or above the request for Turkish citizenship is being processed with the application to be made to the General Directorate of Land Registry and Cadastre during the transfer of title deeds.
The General Directorate of Land Registry and Cadastre checks whether the purchased property or real estate is worth at least US $ 250,000. At this stage, a licensed real estate appraisal company prepares the valuation report of the purchased property. The title deed administration checks this appraisal report and checks the eligibility for Turkish citizenship transactions. A valuation report from real estate agents or consulting firms other than a licensed real estate appraisal company is not considered valid.
After checking the valuation report for citizenship proceedings, the Land Registry Office makes a declaration of conformity which lasts between 3 and 7 days. Once the application is approved, it is necessary to apply to the Immigration Office for a residence permit without making an appointment. When the Immigration Office approves, it is necessary to apply to the General Directorate of Population and Citizenship Affairs on the same day with the confirmation paper and residence permit documents. Following the deed application, all transactions can be followed from a single place in the Citizenship Offices in Istanbul and Ankara.
The application process for Turkish citizenship takes between 45 and 60 days.
Frequently Asked Questions in the Turkish Citizenship Application Process
· Is it also possible for my family to become Turkish citizens?
· Yes. You, your spouse and all your children under the age of 18 can become Turkish citizens. In practice alone, the relevant institutions do not carry out Turkish citizenship procedures for children aged between 17.5 and 18 years.
· Can I purchase more than one real estate to reach the limit of US$ 250.000?
You can purchase more than one real estate with a total value of at least USD 250.000. But you should apply for all at the same time. Your application for citizenship is accepted only if the values declared to the General Directorate of Land Registry and Cadaster are above USD 250.000.
· Which Ministry sets the Unsold Comment?
The real estate appraisers confrm whether the worth of the real estate is more than USD 250.000. The Ministry of Environment and Urbanization requests the “entailed estate annotation” from the General Directorate of Land Registry and Cadaster. The payment of the real estate that you purchased must be made by bank transfer to the property owner
· How should I calculate the USD and TL exchange rates?
The value of the immovable on USD basis shall be calculated by the Land Registry and Cadaster General Directorate over efective selling price of the Central Bank of the Republic of Turkey on the date of sale.
· How long does it take to conclude the citizenship process?
If the documents required for citizenship applications are complete, your application shall be concluded within 45 to 60 days. The government has opened private offices to reduce this time.
· Shall I acquire citizenship when I meet all the requirements?
The process of citizenship approval depends on the fact that you do not pose a threat to national security and this is verified and finalized through national security archives.
· Can I acquire Turkish citizenship by purchasing a rentguaranteed commercial property?
You can purchase any real estate with a total value of USD 250.000 or above
· I do not have time to come to Turkey. How can I get Turkish citizenship?
You can have this process made without coming to Turkey by giving power of attorney to a trusted consulting company
· How many people can apply for a title deed?
Only one person and first degree relatives (spouse and children under 18) can acquire citizenship.
· I have purchased real estate in Turkey before. Now can I apply for citizenship?
The application can be made with real estate purchases and investments realized after 18.09.2018.
· Do I have to waive my existing citizenship when I become a Turkish citizen?
No. Depending on your own state regulation, Turkish laws permit dual or multiple citizenship.
· Do I have to do compulsory military service if I get Turkish citizenship?
When your child under the age of 18 comes to the military age, he is obliged to do military service. Persons entitled to dual citizenship are able to do military service in one of the two countries of which they are citizens. If you have completed your military service, you may need to prove it by a document. Persons older than 22 years of age are required to apply to the General Directorate of Population and Citizenship Affairs whether they hold special conditions or not.
· Which nationalities are accepted for Turkish passports?
All citizens who purchase property in Turkey can make application.
· I have a 16-year-old and a 19-year-old child. Can both benefit from the application for Turkish citizenship?
No. Only children under the age of 18 in the Turkish citizenship application procedures with the purchase of real estate and with his wife is accepted. Individuals over the age of 18 cannot benefit from citizenship with their family. People over the age of 18 can also apply for their own by buying real estate worth at least $ 250,000.
· Can I obtain citizenship for my disabled child over 18?
You can obtain citizenship by documenting that your child is in need of care.
· Does the application for Turkish citizenship apply for real estate acquisition in installment or under construction?
Yes. If the notary-approved sales promise agreement is made and the payments are over US $ 250,000, Turkish citizenship applications can be made for the real estate under construction in installments. The important point here is that the total of the paid installments is over 250.000 USD.
· The process of citizenship can last for 2 months. Can I obtain a residence permit during this process?
Once your application is approved, you and your 1st degree family members will be granted a residence permit on the same day without any waiting period.
· Is it possible to have dual citizenship in Turkey?
Yes, Turkey allows dual citizenship, but you should consult with your consulate of your own nationality. Some countries, such as India, China and Saudi Arabia may impose restriction on dual citizenship.
· How can I become a Turkish citizen if I am not a citizen of any country (stateless, heimatlos)?
You can apply for Turkish citizenship when you purchase a property with a value of at least USD 250.000 together with a proof of your heimatlos (travel document issued by the United Nations).
· Is there any critical point to know?
The ministry wants to ensure that the minimum value is USD 250.000. Certified real estate appraisers value real estate to prevent price fraud. There may be deviations of up to 20% between the sales price and the valuation. Therefore, we recommend that you make calculations by taking this fact into account and purchase the real estate accordingly
The Process of Being a Turkish Citizen by Making Investment
1. Opening bank account: The account should be opened in the name of
2. Making investment: Necessary investment transactions such as deed transfer, cash deposit, government bond / share purchase should be realized.
3. Residence permit application: Applicants are required to obtain a residence permit during the application for citizenship. Holders of residence permits are able to continue living abroad as long as they wish.
4. Turkish citizenship application: You can apply for Turkish citizenship immediately after obtaining a residence permit. You are not required to come to Turkey during the application process.
Documents necessary to apply for the Turkish Citizenship through Investment
· Application form
· ID card of the country of citizenship (passport, ID card, birth certificate, identity register copy and etc.)
· 4 passport photos per each family member
· Birth certificate
· Valid residence permit or a valid tourist visa on your passport
· If married, the identity cards of the spouse and children under 18, if any, and the original official documents proving family ties (marriage certificate, birth certificates of children).
· If the spouse or relatives are Turkish citizens, photocopy of ID cards and residence addresses in Turkey
· Payment receipt for application
· Valuation report
· Receipt illustrating the payment of USD 250.000
· Title deed or the notarized commitment to purchase property