By carrying out one of the investment methods listed above, the investment condition under Article 31 of the Law on Foreigners and International Protection (YUKK) will be fulfilled. The investment methods set out in Article 20 of the Regulation on the Implementation of the Turkish Citizenship Law are not limited to those mentioned above.
In practice, the investment route that particularly arises and constitutes the main subject of our article is the real estate investment method regulated under Article 20/2-b of the Regulation on the Implementation of the Turkish Citizenship Law.
Pursuant to this provision, persons who “purchase immovable property with condominium ownership or condominium servitude established, or land with a building constructed on it, with a value of at least 400,000 US Dollars or its equivalent in foreign currency, provided that a restriction (annotation) is placed in the land registry stating that it shall not be sold for three years, or who, provided that it is determined by the Ministry of Environment, Urbanization and Climate Change that the immovable property with condominium ownership or condominium servitude established is sold via a notarial sale commitment contract in which at least 400,000 US Dollars or its equivalent in foreign currency has been paid in cash and an annotation is recorded in the land registry stating that it shall not be transferred or cancelled for three years,” shall, upon determination by the Ministry, be deemed to have fulfilled the investment condition for the exceptional acquisition of Turkish citizenship.
It should be noted that the amounts of investment methods regulated by law are periodically subject to change. In this regard, the minimum threshold set for real estate investment under Article 20/2-b of the Regulation was revised to 400,000 US Dollars by an amendment published in the Official Gazette dated 6 January 2022. As of 19.04.2024, the amount of 400,000 US Dollars determined under the relevant article remains in effect. Nevertheless, it should not be forgotten that this amount may change from time to time.
Nature of the Immovable Property
As stated in the relevant provision, the real estate investment to be made must be at least 400,000 US Dollars as of 6 January 2022. Therefore, the first condition is that the real estate investment exceeds 400,000 US Dollars. This amount may be met through the purchase of one or more immovable properties. By purchasing one or more properties above this value, the first condition will be satisfied. Similarly, this condition may also be fulfilled by acquiring usufruct rights or condominium ownership/condominium servitude above the stated amount. Therefore, the nature of the immovable property to be invested in is of importance.
Due to the free market economy, the value of immovable properties cannot be precisely determined and may change very rapidly. Since the minimum value set by law is 400,000 US Dollars, making a real estate investment below this value will result in failure to meet this condition. Therefore, determining the objective value of the property is important. This can be achieved through the preparation of a valuation report.
Valuation Report
The valuation report is important in determining the value of the immovable property. With the General Communiqué No. 2019/1 dated 15.02.2019 issued by the General Directorate of Land Registry and Cadastre (TKGM) affiliated to the Ministry of Environment and Urbanization, it has become mandatory to obtain a “Real Estate Valuation Report” not only for citizenship applications but also for all sales transactions where foreign nationals are parties as buyers or sellers.
It is important that the valuation report is dated at most three months prior to the application date. Consequently, the value determined in the valuation report for the real estate investment must exceed 400,000 US Dollars.
It should be noted that with a very recent communiqué, effective as of 04.03.2024, a change has been made regarding the institution from which the valuation report to be used for the acquisition of Turkish citizenship by exceptional means will be obtained.
For transactions other than those related to Turkish citizenship applications where valuation reports are required, valuation reports may be issued by any valuation company licensed by the Capital Markets Board (SPK).
With the “Procedures and Principles Regarding Valuation Reports to be Used in Foreigners’ Acquisition of Immovable Property and Certain Transactions” dated 01.03.2024 issued by the Real Estate Valuation Department Presidency of the General Directorate of Land Registry and Cadastre of the Ministry of Environment, Urbanization and Climate Change, in order to ensure standardization in valuation reports issued for the exceptional acquisition of Turkish citizenship and to prevent differences in property values, the authority to issue valuation reports required for sale/sale commitment transactions for exceptional Turkish citizenship has been granted to GEDAŞ Gayrimenkul Değerleme A.Ş., a subsidiary of the Housing Development Administration (TOKİ).
Following this amendment, applications for valuation reports in land registry transactions related to exceptional Turkish citizenship must be made via the Web Tapu (https://webtapu.tkgm.gov.tr/) official access address by selecting the application path: Request Information → Request Purpose → Citizenship-Related Sale and selecting GEDAŞ Gayrimenkul Değerleme A.Ş.
As explicitly stated in the communiqué, only valuation reports prepared by GEDAŞ Gayrimenkul Değerleme A.Ş. will be accepted in Turkish citizenship applications arising from sale/sale commitment transactions made after the effective date of the communiqué.
The validity period of valuation reports used in land registry transactions is 3 months. If this period expires, a new valuation report must be requested via the system before the land registry transaction is carried out.
Foreign Currency Purchase Certificate and Receipt
With the update made in the Central Bank of the Republic of Turkey Transactions Communiqué, under Article 13, as of 24 January 2022, a foreign currency conversion obligation has been introduced for real estate sales where foreign real persons are the buyers.
Therefore, as of 24 January 2022, this provision will be important for real estate investments made by foreigners under Article 31 of YUKK. Under this amendment, individuals who are not Turkish citizens must make payments for immovable properties purchased in Turkey in foreign currency.
The foreign exchange purchase certificate is a document showing that the currency has been sold to a bank operating in Turkey for the purpose of being sold to the Central Bank before the transaction at the land registry office.
The foreign currency subject to purchase is sold to a bank operating in Turkey before the land registry transactions, with the justification that it will be sold to the Central Bank of the Republic of Turkey, and payment is made to the relevant party in Turkish Lira. Following this sale to the Central Bank, a foreign exchange purchase certificate will be issued by the bank in the name of the person who made the currency sale. It is mandatory that the currency be converted and the foreign exchange purchase certificate be submitted to the land registry office before the transaction.
In citizenship procedures, the foreign exchange purchase certificate and the approved bank receipt showing that the converted amount has been transferred to the seller’s account will be required by land registry offices. While submission of the foreign exchange purchase certificate before the sale transaction is mandatory, the payment receipt (money transfer from buyer to seller) may be submitted together with the foreign exchange purchase certificate before the sale transaction or separately before the commitment transaction and at the latest before the issuance of the certificate of conformity [3].
Annotation Requirement
An annotation must be placed in the land registry record of the purchased immovable property. A foreigner seeking citizenship through investment must place an annotation on the immovable property or properties exceeding the value of 400,000 US Dollars, declaring that the property will not be sold for three years. Similarly, if usufruct rights or condominium ownership have been acquired, an annotation must be placed in the land registry stating that no transfer or cancellation will be made for three years.
Certificate of Conformity
The authority to issue the certificate of conformity for determining that the immovable property subject to acquisition meets the minimum investment requirement lies with the Ministry of Environment and Urbanization (General Directorate of Land Registry and Cadastre). After the necessary annotation is placed in the land registry, a certificate of conformity will be requested from the Regional Land Registry Directorate. The Regional Land Registry Directorate will examine the investment and determine whether the transfer meets the required conditions. Once the certificate of conformity is obtained, an application for a short-term residence permit under Article 31/j of YUKK will be submitted to the Directorate General of Migration Management together with this document and other required documents. After obtaining the short-term residence permit under Article 31/j of YUKK, the final stage—application for citizenship by exception—may be carried out.
Application for Turkish Citizenship Through Real Estate Investment
A foreigner who obtains a short-term residence permit under Article 31/j of YUKK shall apply for Turkish citizenship to the Directorate General of Civil Registration and Nationality Affairs (Nüfus ve Vatandaşlık İşleri Genel Müdürlüğü) together with the required documents.
The process of acquiring citizenship through real estate investment in Istanbul or Antalya is very important to be carried out with legal assistance from a lawyer. If you need any help in this regard, you can contact us at any time.
