Real Estate Law in Türkiye

The right to property is recognized and protected by Article 35 of Constitution of Republic of Türkiye. This right may be restricted due to public interest. Article 35 does not limit the right to property to Turkish citizens but extends it to all individuals, stating; “Everyone has the right to property and inheritance.”

In addition to the constitution, The Turkish Civil Code (in Turkish: Türk Medeni Kanunu) regulates immovable property in detail Articles between 704 and 761.

The freedom of contract and transactions between private parties are mainly regulated under the Turkish Code of Obligations (Türk Borçlar Kanunu). Although these three laws serve as the main legal frameworks for real estate transactions, several other regulations are consulted and applied for more specific matters.

In recent years, a frequently discussed topic in Türkiye is real estate transactions involving foreigners. Foreign nationals can obtain Turkish citizenship by purchasing real estate of a certain value, making Türkiye an attractive option for many investors. The legal basis for this regulation is Article 35 of the Land Registry Law (Tapu Kanunu). The relevant article provides:
“Real persons of foreign nationality who are citizens of the countries designated by the President may acquire immovable property and limited real rights in Türkiye. The total area of immovable property and limited real rights of an independent and permanent nature acquired by real persons of foreign nationality shall not exceed 10% of the area of the district subject to private property and shall not exceed 30 hectares per person across the country. The President is authorized to double the amount that may be acquired per person across the country.”

This grants significant authority to the president, facilitating the acquisition of citizenship through real estate investment by foreigners.

The Regulation on the Implementation of the Turkish Citizenship Law (Türk Vatandaşlığı Kanununun Uygulanmasına İlişkin Yönetmelik) also includes a regulation regarding the value of the real estate. Article 20 of the regulation outlines the exceptional methods of acquiring Turkish citizenship, the documents required for the application and the procedural requirements. Under this regulation, foreigners who are confirmed by the Capital Markets Board to have purchased real estate investment fund participation shares or venture capital investment fund participation shares worth at least US$500,000, or the equivalent in foreign currency, and hold them for at least three years, are eligible for Turkish citizenship.

The General Directorate of Land Registry and Cadaster is the authorized body for land registration in Türkiye. Its responsibilities include maintaining accurate land registries, registering, correcting, monitoring, and archiving property data. The land registry is governed by the Turkish Civil Code and other relevant statutes and regulations.

The following categories are registered as immovable property,

• Land;
• Independent and permanent rights; and
• Independent sections subject to condominium ownership.
  

The land registry consists of five primary and four secondary registers. The primary registers are the book of land registers, condominium registry, journal, official documents (official deed, court decision and others) and plans. The secondary registers are deed index, register of corrections, public medium property register, and title deed inventory book. According to regulation, the land registry is accessible to all individuals with a legitimate interest, allowing them to review documents and request copies. Nevertheless, some difficulties can be encountered in practice.

The registration in the land registry is constitutive in terms of immovables and is mandatory for the acquisition of the right. The rights registered in the land registry are transferable to third parties and inheritable.

Real estate transactions between parties must be registered in the land registry to be valid. Likewise, registration is also required for the use of real rights. The registration made in the land registry is under the protection of the state; and individuals who suffer damages due to any inaccuracy may claim compensation from the state.

The validity of immovable property transactions in Türkiye is subject to condition of official form. Transactions that are not made in accordance with the official form will not be valid. These transactions must be conducted before a notary public or in the land registry offices. Recently, notaries have assumed a significant role in the sale of immovable property, in addition to the duties traditionally performed by land registry offices.

Following recent amendments, notaries have been granted greater authority in the realm of real estate transactions. In 2023, with the amendment to the Notary Law (Noterlik Kanunu), notaries have become also authorized to perform transactions related to immovable transaction contracts in person. As a result, upon an application by the owner for the transaction of immovable property submitted to the notary online, the notary may request the relevant documents from the registry, determine the rights associated with the property, and identify any issues that may impede the transaction.

The seller is liable for the defects that the immovable property might have upon sale. Turkish Law of Obligations have detailed provisions regarding liability for defects Articles between 219 and 231 for the seller. First and foremost, the seller is liable for any discrepancy between the promised and delivered product, regardless of whether it constitutes a defect. It can be a difference in attribute or contrary to declared quantity or any economical, legal, or material defect, that significantly reduces the value or utility of the property for its intended purpose. The seller will be liable although s/he is not aware of the defect. Any agreement that seeks to exclude the seller’s liability for defects is void.

The seller is also liable to guarantee against seizure of the property. If, after the sale, a third party claims part or all of the property due to a right that existed at the time of the sale, the seller will be liable. However, if the seller has informed the buyer of this issue at the time of sale, the seller may be released from liability unless they assumed the risk. If the seller conceals the third party's right, any agreement to exclude or limit liability will be null and void.

Under the Turkish Civil Code, there are three methods for creating pledges on immovable property. The first and most commonly used method is the mortgage, which will be examined in greater detail. Another method is the mortgaged bond of debt, which establishes a personal claim secured by the property. Lastly, an annuity bond may be established on agricultural land, residential properties, or land suitable for construction. Following an assessment by the land registry office, the annuity bond is registered at a value not exceeding three-fifths of the immovable property's assessed value. These bonds are issued by linking them to negotiable instruments.

The most important security that a creditor holds over a debtor is the right of mortgage. To secure a valid claim, the creditor may request that the debtor to establish a mortgage over immovable property. A fundamental requirement for the creation of a mortgage is that the immovable property must be duly registered in the land registry. The mortgage can only be constituted through registration in the land registry and must adhere to the prescribed official form. Additionally, a mortgage may only be established on a specific valid claim concerning a particular immovable property, and the amount must be expressed in Turkish currency. If the claim or the property is not specified, the right to mortgage cannot be exercised.

The mortgage also puts liability on the debtor. The debtor is responsible for preventing any actions that may reduce the value of the immovable property. If the debtor fails to prevent such actions, the creditor may seek a court order prohibiting them. At the same time, the creditor has the right to take measures and claim the cost incurred in cases, where there is an undue delay.

Lease agreements are comprehensively regulated under the Turkish Code of Obligations. While lease agreements may be applied in a broad range of areas, a separate section with more detailed regulations is specifically provided for residential and roofed workplace leases.

The provisions governing residential and roofed workplace leases are applicable to contracts with a term exceeding six months.

Unless otherwise agreed, expenses arising from the use of the property are borne by the lessee. Once the lease agreement is concluded, no modifications may be made to the detriment of the lessee, except for adjustments to the rent. Lessees may be required to provide a deposit not exceeding three months’ rent. Rent increases are valid if they do not exceed the average rate of change in the consumer price index for the previous 12 months. In the event that the parties have not agreed on a rent increase ratio within the scope of the contract and are unable to reach a mutual decision on the rent adjustment, they may petition the court to determine the rent increase on their behalf. The judge considers the condition of the leased property, and that the amount does not exceed the rate of change according to the 12-month averages in the consumer price index of the previous lease year. The lease amount determination lawsuit may be initiated under the following two circumstances:

• If the lease agreement lacks a provision concerning rent increases for renewed terms; or
• In lease agreements with a duration exceeding five years, or those renewed after five years, a lawsuit may be brought at the end of every subsequent five-year period, irrespective of whether a clause concerning rent increases exists within the agreement.
  

In the event of contract termination, the lessor is prohibited from terminating the lease agreement without a valid reason prior to the expiration of the 10-year lease term. Should a valid reason exist, the lessor may terminate the contract by providing written notice at least 15 days before the contract's expiration. If the lessee fails to vacate the property by the agreed-upon date, the lessor may initiate enforcement proceedings within one month. Termination may also be sought through litigation under the following conditions:

• If the lessor is obliged to use the leased property for themself, their spouse, their children, their descendants, their ascendants, or other persons that they are legally obliged to take care of due to the need for a residence or a workplace; and
• If substantial repair, extension, or alteration of the leased property is necessary for the purpose of reconstruction or construction and the use of the leased property is impossible during these works.
  

In the case of fixed-term contracts, it may terminate the contract at the end of the term, and in the case of indefinite-term contracts, it may terminate the contract by filing a lawsuit within one month starting from the date to be determined by complying with the termination period and the periods stipulated for the notice of termination in accordance with the general provisions regarding the lease.

In lease relationships terminated regarding personal or family needs, it is prohibited to lease the immovable property for three years without just cause to anyone but the former lessee initially.

In the event of substantial repair, extension, or alteration of the leased property, the lessor is obliged to notify the former lessee once the immovable is ready to use. The former lessee has the right to priority in renting the property with its new condition and new rent amount. The lessee must respond within one month following the notice. The lessor who rents out their immovable property without notice, is obliged to pay compensation to their former lessee, no less than one year’s rent paid in the last rental year.

In the instance that the immovable property is sold, the new owner is obliged to use the leased property for themself, their spouse, their children, their descendants, their ascendants or other persons that they are legally obliged to take care of due to law, the lease agreement may be terminated by the new owner by filing a lawsuit, provided that the lessee is notified in writing within one month from the date of the purchase.

Construction works in Türkiye are regulated by the Planned Areas Zoning Regulation (Planlı Alanlar İmar Yönetmeliği), which is administered by the Ministry of Environment, Urbanization, and Climate. Construction cannot commence without obtaining a building license. If substantial modifications to the existing structure are desired, a new license is required.

Türkiye has made significant strides in the realm of ESG practices. For instance, Article 10 of the Environmental Law (Çevre Kanunu) regulates the Environmental Impact Assessment (EIA) process for institutions, organizations, and enterprises that may cause environmental harm as a result of their planned activities. Without obtaining an EIA certificate from the Ministry of Environment, Urbanization, and Climate Change, these enterprises will not be granted the necessary approvals, permits, or incentives; nor can investments be initiated, or projects tendered.

Furthermore, the Turkish Constitution underscores the importance of individual quality of life by affirming that "Everyone has the right to live in a healthy and balanced environment." In support of this constitutional right, the Communiqué on the Expansion of the Use of Green Cement with Low Carbon Emission in Public Tender Contracts (Kamu İhale Sözleşmelerinde Düşük Karbon Emisyonuna Sahip Yeşil Çimento Kullanımının Yaygınlaştırılmasına İlişkin Tebliğ), published in the Official Gazette No. 32491 on 16 March 2024, sets out incentives aimed at promoting the use of green cement in public tenders, effective from 1 January 2025.

Real estate transactions in Türkiye are subject to taxation. The tax is calculated based on the declared value of the real estate at the time of sale, with a title deed fee of 4% payable on the declared value. Additionally, if the real estate is sold within five years of purchase, the transaction is considered a "capital gains increase" and is subject to a separate taxation.

Download: Handbook for Real Estate Transactions