Latest update on Turkish Property Registrations

John Howell, senior partner and Basak Yildiz, Turkish lawyer at The International Law Partnership LLP comments:

Land registries in Turkey will now be able to process new registrations of property Title Deeds for both foreign nationals and foreign companies. The new laws were published in the official gazette on the 15th July 2008 making changes official. The circular letter, which allows the Land registry offices to deal with non-national acquisitions, was distributed on the 17th of July.

The announcement came after Turkey suspended new registrations for both foreign nationals and foreign companies on 15 April 2008.

The Constitutional Court of Turkey ruled that a specific section of Article 35 of the Title Deed Act (Tapu), which governs property acquisition by non-Turkish nationals and foreign companies, was contrary to the Turkish constitution.

The questions was not whether foreign nationals should be allowed to acquire land in Turkey but whether Parliament or the Government should relax limitations as to the size of land foreigners can purchase.

This notification was given by the Ministry of Public Works and Settlement sent a circular letter to all land registries and cadastral offices. The circular letter requests any property transaction to foreign companies and individuals to be put on hold until further notice.

This suspension was always intended to be temporary allowing time for the legislation to be re-drafted. The draft legislation (which will lift the suspension) was passed by the Justice Commission of Turkish Parliament. The main change relates to the size of property that foreigners can buy.

The main change is in the seventh paragraph of article 35 of Code of Land Registry, which puts a specific limitation on size of the land that is permitted for foreign acquisition.

According to new legislation, individual non-nationals can purchase 10 per cent of the total area covered in the local planning zone for a town.  Prior to the suspension, individual foreigners could purchase land as long as it did not exceed 0.5 per cent of the province’s entire total area as opposed to just the town.

Parliament also added an additional paragraph giving a three month time limit (from when the new legislation is published in the official gazette) to local authorities to inform the commission of both the size their town’s area covered by planning zone and its restricted areas.

The new law gives the right to the Council of Ministers to change the 10 per cent limit for each town by considering the town’s infrastructure or economical status. However, it must be noted they can only reduce the ratio, which means the ratio cannot rise above 10 per cent.

In this period non-national individuals can purchase up to 10 per cent, however after the commission gathers the necessary information, the Council of Ministers may reduce the percentage for some towns.

John Howell is a senior partner at The International Law Partnership LLP
Tel: + 44 (0)20 7061 6700
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