[BUYING AND SELLING REAL ESTATE IN TURKEY]
229
the sale of such real estate shall be exempt from the income tax. Capital gains generated by companies shall be subject to the standard corporate tax rate of 20%. However, 75% of capital gains shall be exempt from corporate tax provided that the real estate has been owned by the selling companies for at least two years. 4. Acquisition of Real Estate by Foreign Real Persons and Foreign Commercial Companies The Land Registry Law regulates real estate acquisitions made by foreign real persons and foreign legal entities. Foreign real persons are entitled to purchase real estate in Turkey, pursuant to the Land Registry Law. In accordance with Article 35/1 of the Land Registry Law, “Foreign real persons who are citizens of countries determined by the Council of Ministers pursuant to international relations and the country’s benefits may acquire real estates and rights in rem in Turkey provided that the legal restrictions are to be complied with.” Foreign commercial companies, which are established pursuant to the relevant laws of their countries, are entitled to acquire real estate in Turkey only within the provisions of special laws such as the Law on Encouragement of Tourism. However, according to Article 35/3 of the Land Registry Law, “In case the country’s benefits necessitate, the Council of Ministers is authorized to determine the acquisition of real estates of foreign real persons and foreign commercial companies which are established pursuant to the relevant laws of their countries in terms of country, person, geographical area, duration, number, proportion, qualification,
area meter and quantity; limit, cease entirely or partially or forbid the acquisition.” There are legal restrictions for foreign real persons and foreign commercial companies in acquisition of real estate as follows: • Areal restriction: The total area of the real estate that a foreign real person may purchase cannot exceed 10% of the total area of private real estate within the related district and 30 hectares in total within Turkey. • Territorial restriction: If the area desired to be purchased is within the borders of a military forbidden zone or military security zone, foreigners cannot acquire such real estate. • In case the acquired real estate is in land form, foreign real persons and foreign commercial companies should submit the project that will be developed on the unconstructed real estate to the relevant ministries for approval within two years. The real estate is subject to liquidation provisions in following cases: • if the real estate is acquired in violation of the laws;
if and administrations determine that the real estate is used in violation of purpose of purchase; the relevant ministries
•
• if the foreigners do not apply to the relevant ministry within the required time in case the property is acquired with a project commitment; • if the projects are not realized within the required time. In above-mentioned cases, if the liquidation process has not been conducted by the owner
ILN Real Estate Group – Buying and Selling Real Estate Series
Made with FlippingBook - professional solution for displaying marketing and sales documents online