Real Estate Sector in Türkiye: Investment, Development and Portfolio Law

In the real estate sector, a significant part of legal risk relates to the depth of the review carried out before a transaction is signed. The picture in the land register does not always reflect the property's actual position: the zoning status may have changed, the building may have been constructed contrary to its permit, a long-term lease may have been annotated in favour of a tenant, or an action may have been filed between co-owners. This page brings together the main legal issues faced by the different players in the sector.

Purchase and sale and legal due diligence

Under TBK Art. 237, a sale of immovable property is not valid unless made in official form, i.e. at the land registry directorate or, since 1 July 2023, before a notary authorised for this purpose; promises to sell must also be executed in official form before a notary. In the pre-transaction review, the land register record and encumbrances (mortgages, attachments, annotations, easements), zoning status, building permit and occupancy permit, whether condominium ownership or a construction servitude (kat irtifakı) has been established, any leases and pending cases concerning the property are checked one by one. As there is a risk of demolition and administrative fines for buildings contrary to Zoning Law No. 3194, compliance with the approved project should be assessed separately.

In a purchase and sale, title deed fees are charged separately to the buyer and the seller under Fees Law No. 492. If the property is sold within five years of acquisition, capital gains tax may also arise. Calculating the tax consequences in advance according to the transaction structure avoids unexpected costs.

Acquisition of property by foreign nationals

Under Article 35 of Land Registry Law No. 2644, foreign natural persons may acquire immovable property in Türkiye subject to legal restrictions. The total area of property a foreign natural person may acquire throughout the country may not, as a rule, exceed thirty hectares, and the total property acquired by foreign natural persons in a district is limited to ten percent of the district's area subject to private ownership. Acquisitions in military prohibited zones and security zones are also subject to permission. Acquisitions by Turkish companies with foreign capital follow a different procedure. If a citizenship application is to be made through a property investment, the purchase must be structured for that purpose from the start; details are on the Turkish Citizenship by Investment page and in our article on citizenship through real estate investment.

Project development and urban transformation

Flat-for-land construction contracts between landowner and contractor are the most common type of contract in the sector and the one that gives rise to the most disputes. Delivery times, the allocation of independent units, title transfers linked to interim deliveries and the landowner's rights in the event of contractor default should be regulated clearly in the contract. In the transformation of risky buildings, the majority rules and time limits of Law No. 6306 come into play.

Lease portfolios and investment trusts

In income-generating property such as shopping centres, offices and logistics warehouses, the term of leases, rent increase formulas, eviction conditions and annotation of the lease in the land register directly affect the value of the portfolio. In disputes arising from leases (other than eviction proceedings through enforcement), applying to a mediator before filing an action has been a mandatory pre-condition since 1 September 2023. Real estate investment trusts (REITs, GYO) are established under Capital Markets Law No. 6362 and the relevant Capital Markets Board communiqué and are subject to portfolio restrictions.

Our firm's work in this sector

We carry out legal due diligence, contract drafting and follow-up of land registry procedures in real estate transactions, and litigation at the dispute stage. This work combines our practice in Real Estate Law, Construction Law, Urban Transformation and Zoning Law and Lease Law.

Main topics

Property purchase and sale and legal due diligence
Acquisition of property by foreign nationals (Land Registry Law No. 2644, Art. 35)
Flat-for-land construction and project development
Urban transformation projects
Management of commercial lease portfolios
Real estate investment trusts and fund structures
Acquisitions for citizenship by investment

Frequently asked questions

Can foreign nationals buy property anywhere in Türkiye?

No. Article 35 of Land Registry Law No. 2644 provides for a limit of thirty hectares nationwide and ten percent of the area subject to private ownership in each district, restrictions on military prohibited and security zones, and restrictions determined on a country basis. Before purchase, whether the property is caught by these limits is checked through the land registry directorate.

What risks does buying a home without an occupancy permit involve?

In buildings without an occupancy permit, it may not be possible to convert to condominium ownership, problems may arise with utility subscriptions, and administrative sanctions may apply if the building is contrary to zoning legislation. The use of mortgage loans and future sales are also affected.

What is the difference between a construction servitude and condominium ownership?

A construction servitude (kat irtifakı) is a right established on the basis of the land share before the building is completed. After the building is completed and the occupancy permit is obtained, the construction servitude is converted into condominium ownership under Condominium Law No. 634, and full ownership arises over the independent unit.

Is a promise to sell that was not made before a notary valid?

A promise to sell immovable property is subject to official form and must be executed before a notary (TBK Art. 237 and the Notaries Law). Promises made in simple written form are, as a rule, invalid; in that case, claims such as the return of the price paid are assessed separately.

Is there a risk in declaring a sale price at the land registry below the real price?

Yes. Title deed fees are charged on the declared price under Fees Law No. 492; a declaration below the real price, if discovered later, may result in a fee difference and a tax loss penalty. In addition, in a later dispute such as withdrawal from the contract, defects or title cancellation, it becomes difficult to prove the price to be refunded. Making payments through a bank with a description also provides protection in this respect.

Legislation and sources

The information on this page is general and does not constitute legal advice. As legislation may change, the current rules must be assessed separately for your particular situation.

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