Property purchase contracts in Turkey

 

Check, check, and check again

Once you’ve agreed on the sale terms with the property owner or their agent, you need to obtain a copy of the TAPU (Title Deeds) and check whether:

  • The TAPU belongs to the property in question
  • The property is situated in a zone covered by an Implementary Development Plan or a Local Development Plan. If it is not, it is not eligible for purchase and the purchase process must be discontinued immediately
  • The property belongs to the person who identified themselves to you as the owner. Ask to see some photo ID and check it against the name on the TAPU
  • The property is under joint ownership. If this is the case, check whether all shareholders agree to the sale
  • No note prohibiting the sale of the property appears on the TAPU
  • If you are buying land with a view to building on it, check that the Implementary Development Plan or the Local Development Plan allows you to erect a building on the site
  • The building meets all regulations such as earthquake-proof standards.
  • The licenses and official permits have been properly obtained
  • The current owner(s) owe the tax office any overdue taxes
  • The current owner(s) have any overdue debts owing to utilities
  • Your agent, if you are using one, is employed by a registered company
  • An existing contract with a tenant using the property exists.

It will also be useful to

  • Register with a local tax office
  • Open a Turkish bank account
  • Contact relevant professionals such as a trustworthy solicitor, a sworn translator, an accountant or an agent.


Preparing a draft contract

These contracts are not compulsory (a mutual declaration of buyer and seller to the TAPU Registry Office is enough to process the transfer of ownership), but having a strong sales contract may protect you in the event of risks arising from the seller or agent.

If you are using an agent or a solicitor, make sure the contract refers to them, and that they sign the contract.

A contract should include the following:

  • A thorough report of the property, including the address, TAPU details and technical conditions.
  • The price to be paid to the seller. Note that if the contract has a ice clause, than you and the seller must pay Stamp Duty of 0.75% of the value. Additionally, mentioning the price ensures you have rights in the event of a legal dispute in the future.
  • The seller’s bank account details. This should be a single account into which all deposits should be made.
  • If you are using a professional to complete the transaction, their bank details should be included too.
  • The terms of payment and the conditions, including the deposit, schedule of payments, and payments made to a solicitor or agent.
  • A statement explaining that the seller and the buyer will pay their own tax liabilities (otherwise you may be liable for all sale taxes including theirs).
  • The fees and commissions to be received by the solicitor or the agent, so you will free of any possible tax evasion and so there is no discrepancy later about who owes what
  • The conditions of sale and how the money paid by the buyer will be refunded by the seller
  • Force majeure conditions (ie, what happens if a legal problem arises in the future
  • How any tenants will be treated
  • If there are outstanding debts to do with the property, how will they be paid
  • What will happen to furniture, if any
  • Terms of cancellation, if any
  • How to ensure parties are informed about the TAPU Office transactions
  • If there is a Power of Attorney, how will it be amended or cancelled and how will other parties be kept informed
  • Contact information of each signature holder
  • What will happen if a party breaches the contract, and who will decide if a breach is made
  • How disputes will be settled
  • The responsibilities and rights of each signatory
  • The ID numbers of any Turkish nationals who sign the contract
  • The Barr registry number of the solicitor and the registration number of the property company

Translating your draft contract

Translate your contract into English before you sign, so you have both Turkish and English versions. An oral-only translation may lead to complications or confusion in the future.

You may want to consider having a bilingual contract instead of two separate contracts.

Notarising your contract

It is best to sign both versions (the English and the Turkish) in the presence of a notary public. After signing, get each copy notarised to ensure:

  • The contract was signed by the correct people and their signatures are genuine
  • The contract is in accordance with Turkish laws and acceptable everywhere in Turkey
  • The contract’s terms are binding for each party


Contract payment terms

You will need to pay the seller a deposit in order to take the property off the market. This price is negotiable.

Turkey property deposits usually average around five to 10 per cent of the selling price.
Property commissions may be charged to you and the seller. In some cases, only one party can pay the commission. The commission rate is around three per cent.

Transferral of ownership

The buyer and the owner (or their authorised agents) must apply to the local TAPU office to transfer the property’s ownership from seller to buyer.

Documents required by the TAPU office

Individuals
Individual buyers must provide the TAPU office with the following documents:

    - Title Deed or a document that describes the property’s precise location (for example, a plot or parcel number)
  • The buyer’s passport or ID card
  • Two recent passport photographs of the buyer, standard size of 4x6cm
  • If the buyer is using an agent:
    • The agent’s passport or ID card
    • Two recent passport photographs of the agent
    • A legal power of attorney

FDI Companies

A company established in Turkey in accordance with the Foreign Direct Investment Act must issue an authorisation document from the Commercial Registry Office on their behalf. This document includes the following:

  • The company’s name or title
  • Names of authorised representatives
  • Whether the nature of the business/legal features of the business mean the property sale can go through.


Companies established abroad

Commercial companies that are established in countries where the reciprocity agreement exists must submit an notarised document similar to the one detailed in the FDI Companies section. If an agent is processing the transaction on your behalf, they must produce two passport photos and an acceptable power of attorney document.

The Turkish British Chamber of Commerce and Industry (www.tbcci.org) can assist you with the preparation of these documents. You can get these documents verified at the Turkish Consulate General in London. For more information, contact TAPU’s Directorate General at www.tkgm.gov.tr, email webmaster@tkgm.gov.tr, or contact one of our consultants.

How does the TAPU office treat foreign companies and FDIs?

FDI companies

Companies established in Turkey by foreign investors can buy property or limited rights in rem in Turkey, as long as they are in accordance with the operational purposes detailed in the company’s Articles of Association.

Foreign companies

Foreign trading companies having legal personality in foreign countries in accordance with the laws of these countries may buy property in Turkey on condition of being reciprocal and adhering to any legal restrictions.

The property purchase application of a company to Land Registry Offices is sent to General Directorate of TAPU for reciprocity control.

The application will also be checked to ensure the Turkish property in question is not within a military zone or a security zone. Once these checks are completed the company will become eligible to make the property purchase.

Companies will have to submit an officially notarised document of authorisation during the registration process.

Foreign commercial companies that are considered legal entities in Turkey can purchase property in Turkey, as long as they adhere to the specific laws such as the Tourism Encouragement Act, the Oil Act, and the Industrial Zones Act. Foreign charities, foundations or societies cannot buy property in Turkey. If you need more information go to www.tkgm.gov.tr

Issuance of a new title deed

Once the checks are completed, you will be given an official document, the Title Deeds (TAPU).

Without a TAPU you do not legally own the property – even if you’ve signed a legal contract with the seller.

At this stage, you should be organising payments to the seller.

Declaring acquisition to the local government

You should apply to the Municipality to declare the acquisition of the property by the close of the year the acquisition was made. You can do this in writing by simply filling in a form and sending it to the municipality. When the form has been processed, municipality officers will let you know how much real estate tax you will have to pay (this is a bit like the United Kingdom’s Council Tax).