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Within the scope of protecting the value of the Turkish Lira, foreign currency exchange has been introduced in real estate sales to foreigners.
According to the Circular on “Foreign Exchange Purchase Certificate” which was published on 21.01.2021 by the Ministry of Environment and Urbanization and Climate Change, General Directorate of Land Registry and Cadastre;
In transactions where foreigners are buyers, the Buyer is obliged to exchange foreign currency with the Central Bank. Before starting the title deed transfer process, foreign Buyer must deposit foreign currency to their account in one of the Turkish banks and sell the foreign currency to the Central Bank of Turkey, then will submit “Foreign Exchange Purchase Certificate” which will be issued by bank to the Land Registry Office. Sale price of the real estate will be transferred in Turkish Liras to the account of the Seller. In cases where the Buyer has to deposit the sale price in cash to the Seller’s bank account, the Seller shall sell the foreign currency deposited in the account to the Central Bank and request a “Foreign Exchange Purchase Certificate” on behalf of the Buyer.
This practice has entered into force as of January 24, 2022 and “Foreign Currency Purchase Certificate” is required for real estate acquisitions by foreign real persons. In cases where the sales price is deposited into the account of the Seller before the publication date of this Circular, it will not be possible to exchange foreign currency in return for the price, and if this situation is documented with an approved bank receipt, “Foreign Currency Purchase Certificate” will not be requested.
According to new amendment, the currencies to be sold by the banks to the Central Bank should be only in US dollars, Euros and British pounds. In cases where other currencies is deposited, it must be converted to one of the currencies introduced above by taking into consideration the Cross Rates announced the previous day.
“Foreign Exchange Purchase Certificate” will be issued by the banks when the foreign currency is sold for the real estate purchase transactions.
“Foreign Exchange Purchase Certificate” shall include the informations as follows:
- Name and surname of foreign real person
- Passport number or Foreign ID Number of foreign real person
- Equivalent amount of US Dollar of the currency which was sold
- An explanation that this transaction was carried out within the scope of the new Circular
The Turkish Lira amount stated in the “Foreign Exchange Purchase Certificate” is declared to the Land Registry Office as the sales price. As a result of this regulation, no foreign exchange calculation will be done regarding the value of the Promise to Sell Agreements issued the Notary Public or Title Deed Certificate issued at Land Registry Office. Instead, the “Foreign Exchange Purchase Certificate” will be taken as the basis for the valuation.
As for the purchases are part of an installment plan, “Foreign Exchange Purchase Certificate” must be issued for each installment. The deed value will be the total amount of the Turkish Lira stated in the “Foreign Exchange Purchase Certificate”
As a result, foreign real persons who will purchase a real estate in Turkey are obliged to exchange foreign currency with the Central Bank of Turkey and have the “Foreign Exchange Purchase Certificate” to finalize the title deed transfer. Our office provides services on having the “Foreign Exchange Purchase Certificate”. Feel free to contact our team for further details.
