Substantial Changes in the Turkish Citizenship through Real Estate Investment Laws

Some important and major changes were made in the citizenship through real estate investment rules on 19.12.2022. Before elaborating those changes, it is important to emphasize that all of those changes are going to come into effect as of 01.02.2023.

If a real estate preliminary sale promise contract ("gayrımenkul satış vaadi sözleşmesi" in Turkish) is to be used as investment, 400.000 USD worth investment must be pledged with only a single contract. It does not matter how many real estate properties such a single contract covers but more than one preliminary sale promise contracts cannot be combined for the citizenship application anymore. Preliminary real estate sale promise contracts cannot be combined with already purchased real estate purchases anymore.

It is not possible anymore to apply for the citizenship with a jointly owned real estate. Even if the value of one real estate is much more than 400.000 USD, only one investor can benefit from one real estate for the citizenship application. For example, even if two foreigners purchase a real estate worth 800,000 USD in equal shares (400.000 USD for each) they will not be able to apply for the citizenship.

The real estate which will be purchased by a foreign investor who aims to acquire Turkish citizenship cannot be a real estate owned by a Turkish citizen who obtained the citizenship through investment. It does not matter anymore whether that real estate was previously used for acquiring the citizenship or not. It’s quite a big difference than how the rule was before. For example, if Mr. X buys two real estate properties one of which is worth 400.000 USD and another one 300.000 USD, and uses the first one for the citizenship application, he would be able to sell the other real estate after 3 years of period to new foreign investors who aims to acquire the Turkish citizenship through real estate investment. Mr. X’s only first real estate which has already been used for him to acquire the citizenship would not be able to be used by new investors. However, according to the new rule, none of Mr. X’s real estate can be used by new investors for the citizenship application anymore.

The real estate which is to be purchased by a foreign investor who aims to acquire Turkish citizenship cannot be a real estate owned by a Turkish company if the majority of its shares are owned by foreigners, foreign companies or Turkish citizens who obtained the citizenship through investment. Moreover, this situation cannot change even if those foreign partners have acquired the Turkish citizenship through investment. That means, if a company which has foreigner shareholders is willing to buy/develop and sell real estate to foreign investors who aim to acquire the Turkish citizenship, then the majority of the shareholders must be comprised of either original Turkish citizens or naturalized Turkish citizens who acquired the citizenship in other ways.

The used (second-handed) real estate which is subject to sale or the preliminary sale promise contracts cannot having been transferred to a Turkish citizen/company by any foreign real person within the last three years. Acquisitions arising from the contracts of construction (“eser sözleşmesi” in Turkish) are exempted from this rule.

“Time-shared” real estate ownership (“devremülk” in Turkish) cannot be used for the citizenship application.

If there are more than a real estate that foreign investor purchases for the purpose of acquiring citizenship, the application process must be started at the Directorate of Title Deed Registry of the district where majority of those real estate are located.

If the Directorate of Title Deed Registry finds any of the following points missing, it cannot cancel the application and inform applicant for the completion of the missing point(s):

      a. The lack of necessary authorities in the power of attorneys given to attorneys of applicants,
      b. The lack of annotation on the title deed(s) to pledge 3-years-long sale blockage,
      c. The lack of sale permission for the specific categories of real estate which are subject to permission for sales,
      d. The deficiencies in payment receipts as to the receiver’s or sender’s names,
      e. The deficiencies in payment receipts as to the necessary bank stamps,
      f. The lack of documents proving the origin of applicants,
      g. The deficiencies in the documents proving the identity of applicants.

Since the beginning of 2022, a new kind of official document started being requested by the authorities: Currency exchange document (“döviz alım belgesi” in Turkish). Because it was a recently introduced official document in the Turkish legal and banking system, there emerged some confusing points about currency exchange document. With the new changes, those confusions have been resolved. Accordignly, the necessary content that must be written on the currency exchange document is as follows:

      i. Full name, passport number of foreign ID number of applicant,
      ii. The building and flat number or at least the land parcel number of real estate as recorded in https://parselsorgu.tkgm.gov.tr/
      iii. The equivalent amount of the exchanged money in USD,
      iv. The statement clearly writing that the exchange in hand is being done “with the purpose of acquiring the Turkish citizenship or according to Article 13 of the Regulation Concerning Capital Movements (“Sermaye Hareketleri Genelgesi” in Turkish)”.

The paid amount written on the payment invoice(s) must exactly match the amount written on the currency exchange document. However, if the amount written on the payment invoice is more than the currency exchange document, it will not be a problem anymore.

In summary, it can be argued that there will be major changes in the rules of citizenship through real estate investment in the new year. On one hand, some changes have an indirect negative impact on the naturalized citizens through investment. On the other hand, there will be more clarity about some procedural matters.