Buying Real Estate in Turkey – Everything You Need to Know

When it comes to real estate investments, it is highly advisable to think in terms of a diversified portfolio. Turkish properties can be a profitable component of such a portfolio. Turkey is a popular tourist destination with excellent transportation links, serving as a bridge between key markets. With its rich history, natural environment, and emerging economy, Turkey offers an ideal location for real estate investments.

Why is purchasing property in Turkey a good investment?

Turkey is a major player in the international market.

Bordered by three seas and serving as a transcontinental bridge between East and West, Turkey holds a strategic position. The Turkish economy has undergone significant growth over the past 10-16 years.

Globally, it is recognized as the 13th largest economy, reflecting a five-position improvement in GDP rankings compared to 2003.

In addition, Turkey achieved the highest GDP growth between 2003 and 2018.

Source: invest.gov.tr

When purchasing property in Turkey, it is important to consider that the Turkish lira is more affordable compared to the US dollar. Additionally, Turkey offers tax incentives to encourage foreign investments.

A key advantage is that foreign investors can obtain permanent residency and Turkish citizenship by purchasing property.

For private investors, the requirement is to purchase property worth at least 400,000 USD in Turkey.

Individuals investing in real estate in Turkey can secure Turkish citizenship for themselves, their spouse, and children under 18. Citizenship is lifelong and extends to the investor’s descendants.

Read more about the benefits of real estate investments in Turkey in this article.

The Process of Buying Property in Turkey

Purchasing property in Turkey and investing through citizenship acquisition is a straightforward process, but it is essential to consult an expert and gather information about the requirements beforehand. There are several key points that investors need to be aware of before starting the property purchase process.

As of January 1, 2023, the conditions for property purchase and investment are summarized as follows:

• Property buyers can obtain citizenship if they purchase real estate worth $400,000 and pay for it through a bank.
• Even if the purchased property exceeds the $400,000 market value, only one citizenship can be obtained.
• From January 25, 2023, foreign investors must purchase property from Turkish citizens. This also applies to construction projects, where the builder and owner must be Turkish citizens.
• The purchased property must be appraised at a minimum value of $400,000 by a Turkish appraiser and the real estate supervisory authority. The assessed value is the basis for paying the property transfer tax to the state.

Foreign nationals can buy property as citizens of countries authorized by Turkey for real estate acquisition purposes. However:

• Properties cannot be purchased in Turkish security zones or military restricted areas.
• Investors can buy up to 30 hectares of land.
• Investors must retain the purchased property for at least three years. This obligation is recorded as a clause in the title deed or the notary-certified sales agreement.
• If the property is sold within three years, citizenship will be revoked.
• The certification of the property purchase must also be approved by the Turkish Urban Development Organization.

Acquiring Turkish Citizenship Through Real Estate Investment – Process and Duration

After selecting the appropriate investment opportunity, a residence permit application must be submitted on behalf of the family. At this stage, the primary applicant is required to open a bank account in Turkey.

Once all the application documents have been gathered (including the necessary certifications and translations), they can be submitted to the government.

This initiates the review process, during which a citizenship interview can also be requested. Applications are typically approved within 120 days, after which citizenship documents are issued. Following this, the passport application can be submitted.

Before making such an investment in Turkish real estate, it is important to consider that Turkish gift and inheritance taxes apply to all assets owned worldwide by Turkish citizens. Upon acquiring citizenship, assets located in other countries may also become subject to Turkish taxation.

Additionally, real estate brokerage fees should not be overlooked. In Turkey, brokerage fees generally amount to 4% of the property’s value.

Turkish Property Title Deeds

There are different types of property title deeds in Turkey. Depending on the type of property, the official document is issued in either blue or red.

This document certifies the ownership of the person mentioned within it, provides information about the property and its details, and specifies the property’s location.

The document is issued exclusively to the property owner. Tenants, lienholders, or individuals with rights associated with the property other than ownership are not eligible. In cases of multiple owners, each can receive a property ownership document.

The title deed can only be obtained after acquiring the habitation certificate.

Where to Buy Property in Turkey

Istanbul is by far the most preferred and popular destination for real estate investment. As Turkey’s cultural, economic, and historical hub, Istanbul is the largest and most populous city in the country, comprising 39 districts. From 2013 to today, more than 40,000 properties have been purchased by foreigners in Istanbul.

Some popular neighborhoods for real estate investment in Istanbul include Nisantasi, Taksim, Karakoy, Etiler, Sariyer, and Cihangir:

• Nisantasi – A high-end neighborhood with luxurious restaurants and boutiques. Good investment opportunities start from $250,000. Investing here qualifies you for citizenship under the investment program.
• Cihangir – Known as Istanbul’s artistic district, popular among artists and musicians.
• Karakoy – Offers an urban vibe with its many cafes and restaurants.
• Taksim – One of Istanbul’s most central districts, home to some of Turkey’s oldest mosques.
• Etiler – A favorite area for those seeking luxury. As one of Istanbul’s most expensive regions, it features upscale cafes, high-end brand shops, and properties such as Bosphorus-view villas and luxury apartments.
• Sariyer – The top choice for families relocating to Istanbul. Its Bosphorus views, proximity to financial hubs, and abundance of green spaces make it highly desirable. Mansions, villas, and residences are available here.

Other Locations in Turkey for Real Estate Investment

Outside Istanbul, other locations also offer profitable real estate investment opportunities for foreigners:

• Antalya – Located in southern Turkey, Antalya is one of the most famous summer destinations for both locals and expatriates, with over 100,000 foreigners residing in the city. It combines the convenience of metropolitan living with the charm of a coastal town. Antalya is the third most popular destination for those moving to Turkey.
• Bodrum – Another renowned coastal area in Turkey. This seaside town offers sea-view villas, stone houses, and detached villas with large gardens. Its climate makes it a great place to spend the winter, and Bodrum is home to a significant British expat community.
• Ankara – As Turkey’s capital, Ankara is a preferred destination for working expatriates. Real estate prices in Ankara are more affordable than in Istanbul. If you wish to live in a big city without investing a significant amount, Ankara is a suitable choice.

Mortgage Loans in Turkey

In Turkey, you can arrange a mortgage through Turkish banks or with the assistance of property developers.

Most Turkish banks offer foreigners up to 70% of the property value with a loan term of up to 15 years.

You can also obtain financing through your property developer, who often provides mortgage options to prospective buyers. The down payment typically starts at 30-35% of the property’s value.

In a favorable interest rate environment and with suitable loan terms, you can also secure financing in Hungary for your Turkish real estate investments.

For further information, contact the Kenway team regarding purchasing Turkish properties. Our office specializes in exclusive Turkish real estate investment opportunities.