Buying Property in Turkey
What Comes Before?
Text by Mr. S.T. Kroon-Özyurt
According to international private law, the legislation of the country where the property is located applies, in this case Turkish law.
Important aspects of a purchase procedure are:
- Preliminary investigation
- Correct contracts, procedures, and projects
- Possible guarantees (depending on the project)
Why an investigation?
In the Netherlands, the official transfer of property ownership takes place with a notary. In Turkey, this is done at the cadastre. However, the transfer procedure is not the same, as cadastral research regarding the ownership situation of the property, and the encumbrances and restrictions on the property, is conducted by the notary in the Netherlands and presented to the buyer as part of the purchase agreement. In Turkey, the buyer must carry out this investigation themselves.
Cadastral Investigation
Research on the legal owner:
Purchase agreements and arrangements must be made with the correct party. This is the person listed as the owner in the title deed or the person legally authorized by the owner to sell the property.
Research on encumbrances and restrictions on the property:
Encumbrances limit the right of use and/or ownership of the owner. These include not only mortgages and liens but also rights of third-party use, easements, partial residency rights (sukna), building rights (ust hakki), repurchase rights (vefa), obligations regarding public facilities, pre-sale agreements, etc.
Research on the type/status of the property:
If you buy an existing house, it must also be registered as a residence in the cadastre and not as an undeveloped plot.
Research on the management plan:
Every apartment or housing complex has a contract with the Cadastre for the Association of Owners. This contract can be described as a management plan, outlining rules for using shared spaces, independent units (residences or commercial units), general expenses, rights and obligations of owners, board, supervisors, etc.
Research on the location:
It is important to verify that the displayed land matches the one listed on the title deed. For this, an official identification procedure can be requested from the cadastre. This procedure is conducted with the owner’s consent by a cadastral specialist at the property location.
Research with the municipality or local authority (ozel idare):
If the property is within municipal boundaries, the competent authority for its zoning is the municipality; if outside, the local authority of the ministry (ozel idare) is responsible.
Research on zoning:
According to the new law of January 7, 2006, foreigners may only buy property in areas with designated zoning plans (Uygulama imar plani or mevzii imar plani), intended for use as a residence or business. Some unplanned plots allow Turkish citizens to build a house, but foreigners are not permitted to buy or build there.
Research on the building permit for a property under construction:
The permit specifies construction details such as type, size, height, quality, materials, floors, and intended use. Construction must begin within two years from the permit date and be completed within five years. Failure to comply requires a new permit from the municipality.
Research on the occupancy permit (Iskan / yapi kullanma izni):
The final step in the construction process is obtaining the Iskan from the competent municipality. If construction follows the approved project plan, municipal specialists will verify compliance with legal requirements. Once approved, owners can apply for the occupancy permit (Iskan). Without it, municipal utilities like water and electricity may not be connected, and temporary construction utilities are significantly more expensive. Costs for the Iskan may be covered by either buyer or seller, but it is recommended to buy a property with Iskan for legal certainty and access to municipal facilities.
Research on municipal taxes:
Before transferring an existing property, the seller must have paid all municipal taxes up to the transfer date.
Research on the municipal valuation of a property:
The sale price stated during the cadastral registration cannot be lower than this valuation.
Choosing the correct contracts, procedures, and projects:
Every project is different. Therefore, contracts, procedures, and guarantees must be evaluated individually. The ideal contract for the buyer ensures a guarantee or right for any advance payment.
Uncertainties may arise because foreigners must wait for a military permit to obtain property ownership, while the seller wants to see an advance payment. Additional waiting times occur if buying a property under construction. The ultimate goal is always to obtain the property title as quickly as possible under agreed conditions. Tips based on these challenges:
- All agreements must be documented in writing, preferably co-signed by witnesses.
Property ownership cannot be transferred solely through private contracts. Although a private sales contract is not mandatory in Turkey and does not grant ownership, it is recommended to document agreements in writing for legal evidence to reclaim paid funds if necessary. Witness co-signature strengthens your position.
- The only official sales agreement is the notarized “pre-sale agreement” / Gm. Satis Vaadi (not always recommended for foreigners).
Why is this agreement not always favorable for foreigners?
The agreement is officially valid only after notarization and registration at the cadastre, which does not automatically confer ownership. Foreigners must also obtain a military permit for cadastre registration, which adds a waiting period. The notary procedure is costly, about 10% of the sale price.
What is the main difference between an unofficial and an officially registered pre-sale agreement?
Both are optional. With a registered agreement, ownership can be claimed in court; with an unofficial agreement, only the payment can be reclaimed. The property cannot be sold to third parties in the meantime if registered.
When can you consider this agreement as an option?
If buying a property under construction with a long gap between payment and ownership transfer, and the seller offers no other guarantee, this method can provide legal security. Registration is valid for five years.
- When purchasing an under-construction property in a complex, ensure an official division (kat irtifaki) exists at the start of construction.
Guarantee Methods
If a large part of the purchase price is paid before obtaining ownership, it is recommended to secure the payment.
The appropriate guarantee depends on the situation. For large projects, developers may request a bank guarantee from contractors; for individuals, collateral may suffice. Common guarantee methods include:
- Collateral
The most common method, providing security. Costs about 1.1% of the amount. Must be properly appraised; public sale may yield less.
- Bank guarantee
Less favorable for developers as funds are blocked. Requires significant creditworthiness.
- Promissory note
Simplest method but offers less security. If the seller is insolvent, it does not ensure collection.
Advice:
Ensure the reasonableness of guarantee types according to the situation. All methods have pros and cons for both parties.