Changes in Turkish Investment Citizenship based on Real Estate
Turkish immigration law allows for foreign nationals to apply for Turkish citizenship by acquiring immovable property (real estate) valued at least USD 400,000 and not selling the property for 3 years. This article describes several new rules in relation to these citizenship applications.
According to the announcement published on February 3, 2023 on the official website of the General Directorate of Land Registry and Cadastre, the amendments in the investment citizenship legislation are effective as of February 1, 2023. The main changes to the Guideline annexed to Circular on the Regulation on the Implementation of the Turkish Citizenship Law (“Regulations”) are as follows:
- Changes in requirements when investment based on a “preliminary sales contract”:
A preliminary sales contract is a type of sales agreement by which the seller and the buyer determine terms and conditions of a real estate sales contract which will be fulfilled at a later date. Preliminary sales contract contains biographical information of the parties, details of the immovable property and conditions of the sales agreement. A preliminary sales contract can be considered as a sale promise made by a seller to sell an immovable property in his/her possession to a certain buyer.
- The buyer can legally force the seller to sell the property in the conditions promised in the contract, provided that the contract was issued and confirmed by a Turkish Notary.
- There is no restriction on the number of immovables/properties to be acquired by sales contracts. However, in citizenship applications based on preliminary sales contracts, the investment amount required in the Regulation must be provided in a single contract. In this context, more than one immovable property can be subject to a single preliminary sales contract, but, more than one preliminary sales contract cannot be basis of a citizenship application even though the total investment amount meets the investment amount required in the Regulation.
- When the value of purchased immovable property does not meet the investment amount required in the Regulation, it is not be possible to complete the remaining amount with a preliminary sales contract.
- Secondly, the immovable property purchased by more than one foreign person to form joint ownership, cannot be eligible for a Turkish citizenship application even though the value of the shares meet the investment amount required in the Regulation.
- For the immovables that are still under construction or with a construction servitude, the value calculated can take into account the value of the constructed and completed version of the property. Also the construction process of immovables still under construction or with construction servitude must have commenced by the time of the valuation report.
- The amendments to the Regulation also include some new formalities with reference to issuance of “Foreign Currency Purchase Certificates” including:
- Foreign Currency Purchase Certificate issued by the banks must be sent to the relevant Land Registry Directorate via “KEP” system.
- Regarding transactions based on preliminary sales contracts, the Foreign Currency Purchase Certificate must be issued for at least the minimum amount paid in advance as of the date of contract at the latest.
- Lastly, there are also amendments with regard to the allowable parties of the transactions.
- Before the amendments, it was possible for a foreign buyer to be eligible to apply for Turkish citizenship through an immovable property, provided that the property had been transferred to a Turkish citizen/company by a foreign real person from a different nationality. However, now the immovables transferred to a Turkish citizen/company within the last three years by any foreign real person cannot be subject to sales contract or preliminary sales contract for citizenship purposes (Certain exceptions may apply.)
- Immovables subject to sale or preliminary sales contract cannot be registered in any foreign real person’s name or in the name of foreign buyer’s first degree Turkish citizen relatives.
- Furthermore, immovable property that was previously owned by first degree relatives of the foreign buyer and then transferred to a Turkish citizen/company cannot be subject to sales contract or preliminary sales contract for citizenship purposes.
Regulation of Turkish Investment Citizenship applications based on real estate has been modified over the years based on shortcomings arising from previous applications. Various changes in the application procedure occurred particularly in the beginning of 2022. But lastly, as there has been a high demand for Turkish Investment Citizenship, it appears the Turkish government intended to tighten the application procedure in order to ensure the accuracy of the applications.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.