How to Make a Safe Real Estate Investment in Turkey?

Turkey's strategic location, cultural richness, and programs like Citizenship by Investment (CBI) make it an attractive hub for foreign real estate investors. However, behind this appeal lie legal, economic, and procedural risks that must be carefully managed. A successful investment is possible by understanding potential pitfalls in advance and taking the right steps. So, how can you, as a foreigner, secure your real estate investment in Turkey?

Conduct Comprehensive Legal Due Diligence

The first and most crucial step for a safe investment is professional legal due diligence. This process allows the investor to identify potential issues with the property before the purchase. An independent real estate lawyer examines the title deed record (takdiyat belgesi) to check for any mortgages, liens, or encumbrances that could prevent the sale. Furthermore, it is critical to ensure the property is not located in restricted areas for foreign acquisition, such as military exclusion or security zones. These simple checks prevent serious legal problems and financial losses in the future.

Verify the Property's Physical and Legal Compliance

One of the most common issues in Turkey's building stock is the lack of an "occupancy permit" (Yapı Kullanım İzin Belgesi or İskan). A property without an occupancy permit is legally considered "under construction," which can complicate obtaining essential utility subscriptions like water and electricity, make it impossible to secure a bank loan, and, in the worst-case scenario, carry the risk of a demolition order from the municipality. Always check if the property has an occupancy permit before investing. Its absence is often an indicator that the developer did not comply with legal or technical standards. Also, do not overlook the fact that Turkey is an earthquake-prone country. The building's construction year and its compliance with the earthquake regulations valid at that time are vital information for the safety of your investment.

Accurately Analyze Market Value and Hidden Costs

The Citizenship by Investment (CBI) program can cause artificial price inflation in the market due to its $400,000 investment threshold. Therefore, it is essential to understand whether a property's asking price reflects its true market value. While the mandatory "real estate appraisal report" from an SPK-licensed expert for sales to foreigners provides a safety mechanism, it is advisable for the buyer to conduct their own research. Also, factor in costs beyond the purchase price.

• Title Deed Fee: This is typically 4% of the sales price, shared between the buyer and seller.
• Complex Maintenance Fees (Aidat): In large residential complexes, monthly fees and unplanned major repair costs (roof, facade, etc.) can significantly impact your budget.
• Taxes: Remember that if you sell the property within 5 years, the profit you make will be subject to "Capital Gains Tax." This rule effectively directs your investment towards a long-term strategy.

Secure the Payment and Title Deed Transfer Processes

The standard practice in Turkey is for the sales price to be transferred to the seller's account before the final signatures are made at the title deed office. This poses a risk for the buyer, as the seller could back out of the deal after receiving the money. To eliminate this risk, mechanisms such as escrow accounts or banks' title deed security systems can be used. Additionally, as of January 24, 2022, foreign buyers are required to obtain a "Foreign Exchange Purchase Certificate" (Döviz Alım Belgesi - DAB) by selling the purchase amount to a Turkish bank. Seeking professional assistance to manage all these procedural steps correctly and securely is the most effective way to protect your money.