Lawyer in Turkey

Thursday, March 14, 2019

Obligation for Property Valuation in Turkey

The Turkish real estate market is dealing for years with unregistered money circulation. Herewith the government is missing a lot of tax rates, due to the fact that investors are not giving up the fair market value with property transactions. The reason therefore is that the legal transfer fees are calculated on base of the purchase amount that the parties declare independently at the title of deed office. And that's the point where it goes wrong. Actually the basic indication for the purchase value is the municipal current market value, but often the municipal market value differs from the fair market value.

Besides the lost tax rates, the buyer is often the victim of unrealistic purchase amounts, with the result that Turkey can not create a stable trade name on the international real estate market.

So far the imposed measures proved to be ineffective. That is the reason why the Ministry is  introducing the obligation of a valuation report starting from 4th of March 2019! Before the deed of purchase and delivery can take place, a valuation report with the fair market value of the object must be established by a recognized valuation company, which will serve as the basis for calculating the property transfer fee.

The regulations are laid down in a Land Registry Regulation by the Ministry of Environment and Urban Development (TKGM). In accordance with this regulation, the procedures of purchase and sale of a property will have to deal with a recognized valuation office that has been approved by the government, the so-called "SPK lisanslı uzmanlar".

With this new regulation, all foreign investors will be subject to the mentioned conditions.  The established valuation report has a validation period of maximum of 3 months from the date of issue. Obtaining a new valuation report within those 3 months is not necessary unless there is such a change to the property that will have an effect on the value. In case of buildings who are under construction, the value will be based on the details of a completed object.

The purpose of the government may be clear, but the remain main question is; whether the intervention of a recognized valuation office will actually benefit the foreigner. On the other hand, it is certainly a fact that the intervention of an recognized valuation office will considerably delay the ownership transactions in a country where the economy is running very fast.

For more information and guidance on your real estate sale or purchase, please contact us.

Wednesday, October 17, 2018


Turkey has never been as generous as the last year. The economy of the land keeps moving with its ups and downs and finds reasons to attract foreign capital to invest. The news comes from internal affairs and reports that the conditions for acquiring Turkish nationality is been changed in the sense that the investment capital contribution has been reduced in particular.

With the regulation amending the regulation on the application of the Turkish nationality law published in the Official Gazette, the foreigners are able to acquire Turkish citizenship on the following possibilities;

  • In the context of business investment, the minimum fixed capital investment is reduced from 2 million dollars to 500 thousand dollars
  • purchase investment in real estate property is been reduced from  $ 1 million 250 thousand dollars, provided that the purchased real estate will not be sold within three years
  • the amount limit foreseen in order to obtain citizenship by acquiring a certain amount of deposits in Turkish banks for a period of three years or the acquisition of government debt instruments is limited from 3 million dollars to 500 thousand dollars,
  • to participate and investment in fund participation share of venture capital fund or venture capital is reduced from 1.5 million dollars to 500 thousand dollars.
In addition, the limit on the amount of employment envisaged to acquire Turkish citizenship through employment creation has been reduced from 100 to 50 persons.

As an expert in real estate investment and legal matters, my attention has been drawn in particular to the possibility of obtaining citizenship when investing in real estate.

Imagine that you would like to set up a company with real estate for storage, processing, production, trading or whatsoever , a nice step to bypass the application for a work permit.
You must have a work permit to start your business.

Don't hesitate to contact us in case you need more information.

Tuesday, March 6, 2018

Management Liability - Owners Association Law of Apartments - Accounting Records

One of my clients, is a board member of a Owners Association,  has been involved in a court case that encourages me to bring this subject in question to reach a wider audience.

The Turkish Court in question decided that the elected directors of an association of owners have acted criminally reprehensible because they have not properly kept and closed accounting books of the owners' association, officially. Which means that the accounting records has to be closed and approved by a Public Notary in Turkey.

This concerns the formal conclusion of the official books of an association of owners in accordance with Article 36 of the Law on Apartments. Article 36 of this Act stipulates that a director of an association is obliged to keep all official records of the association, such as the agreements, the expenses, the meeting invitations, the powers of attorney and all the briefings with data and overview in time order in an official notarized legalized book that must be closed and approved by a Public Notary at the end of each calendar year. This accounting records are in a separate book (Gelir Gider Defteri) than the official decision book (Karar Defteri) in which the decisions of the association are included.

A board member at an Association of Owners is usually an unpaid job. Voluntary work, unless the members decide otherwise. The nomination for a board position takes place at the time of the annual general members meeting. An association is obliged to meet at least once every year. A director must be appointed by an advanced majority of votes. An advanced majority consists of majority in shareholding as well as majority in the number of members present. A director can only be appointed for a period of maximum one (1) year. The board of an association consists of one or three members. (not 2 or 4).

The appointed board (members) are responsible for correctly recording the accounting records. The administration must be kept in time in a Notary legalized administration book (Gelir Gider Defteri).

The administration book has to be closed and approved by the Public Notary in Turkey at the end of each calendar year. 
When the assembly is closing the year in f.e. April or September. Then the financial year is ending in April or September, before the General Assembly occurs.
Even when the financial activities of the Owners Association are delegated to a third party like a Home Management Company, the appointed board (members) remains responsible for correctly keeping and closing the books.

My advice is make sure that you get a good advice before you enter into a director / board member position as a foreigner. It saves you a lot of headaches at the end.