Legal Limits on Real Estate Acquisition by Foreigners

Legal Limits on Real Estate Acquisition by Foreigners. The real estate acquisition regime in Türkiye by foreigners has undergone a strategic transformation with the radical amendment to Article 35 of Land Registry Law No. 2644, which abolished the principle of reciprocity and granted acquisition rights to citizens of countries designated by the President. This legal framework, designed to encourage foreign investors, allows for Turkish citizenship for a real estate investment of US$400,000. Furthermore, to protect national security and property ownership, it imposes strict quotas of 30 hectares per person and 10% of the district’s surface area, as well as prohibitions on acquisition in military and special security zones. Furthermore, the requirement to submit projects within two years for the acquisition of unstructured real estate, such as agricultural land, and the limits of the scope of activity of foreign-invested companies (Article 36) demonstrate that the process is not merely a transfer of ownership but an investment regime subject to strict administrative controls.

1. Sovereignty and the International Dimension of Property Rights

One of the most concrete manifestations of a state’s sovereignty is its right to determine the property regime within its own territory. The ability of foreigners to acquire immovable property in a country has historically varied like a pendulum, swinging between national security concerns and the necessities of economic integration. In the legal system of the Republic of Turkey, the issue of “Real Estate Acquisition by Foreigners” appears not merely as a simple purchase-sale transaction concerning private law, but as a multi-layered legal regime intersecting with administrative law, constitutional law, and international relations.

This report aims to deeply analyze the real estate acquisition processes of foreign real persons and legal entities in Turkey, the restrictive norms in these processes, exceptional citizenship acquisition routes, and project obligations in specific areas such as agricultural lands, in light of the Land Registry Law No. 2644, Turkish Citizenship Law No. 5901, Foreign Direct Investment Law No. 4875, and related secondary legislation. Our analysis will focus not only on the “letter” of the legislation but also on its “ratio legis” (the rationale behind the law), offering a strategic roadmap for investors and legal practitioners.

Turkey’s real estate policy underwent a radical paradigm shift, particularly with Law No. 6302, which came into force in 2012. The “Reciprocity” principle, which had been strictly applied until that date, was abandoned. Instead, citizens of countries determined by the Council of Ministers (the President in the new government system) were granted the right to acquire real estate without seeking reciprocity. The primary motivation for this change was to make Turkey an attractive hub for international real estate investors and to accelerate foreign capital inflow. However, this freedom does not grant an unlimited right; it is balanced by detailed restrictions regarding quantity, location, and person (quotas, security zone bans, etc.).

2. Basic Legal Regime for Real Estate Acquisition by Foreign Real Persons (Land Registry Law Article 35)

The acquisition of real estate ownership or limited real rights (usufruct, servitude, etc.) by foreign real persons within the borders of Turkey is regulated by Article 35 of the Land Registry Law No. 2644. While this article is the constitutive norm recognizing the property rights of foreigners, it is also the fundamental text defining the boundaries of this right.

2.1. Abolition of the Reciprocity Principle and the List System

Until 2012, the prevailing view in our legal system was that for a foreigner to acquire property in Turkey, the country of which that foreigner was a citizen must also grant the same right to Turkish citizens. However, with Law No. 6302, Article 35 of the Land Registry Law was reorganized, and the phrase “without seeking the reciprocity condition” was introduced.

In this new system, the basic condition for acquisition is that the foreign person must be a “citizen of one of the countries determined by the President.”

This regulation has granted the administration broad discretionary power. Which country’s citizens can acquire real estate is determined by considering international bilateral relations and national interests. This list has a dynamic structure and can be updated according to developments in foreign policy. When a foreigner applies, land registry offices are obliged to first check whether the person’s nationality is included in this list.

2.2. Statutory Limitations Regarding Quantity and Area

Real estate acquisitions by foreign real persons are subject to two fundamental quantitative limitations to protect the property balance of the local population and maintain strategic territorial integrity: The Per Capita Quota and the District Surface Area Quota.

2.2.1. Per Capita Surface Area Limit (30 Hectare Rule)

Pursuant to Article 35 of the Land Registry Law, the total surface area of real estate and independent and continuous limited real rights that a foreign real person can acquire throughout Turkey cannot exceed 30 hectares (300 decares). This limit applies not to a single parcel, but to the sum of the person’s entire real estate assets across Turkey.

The legislator has allowed for this limit to be stretched so as not to block large-scale investments. The President is authorized to increase the amount that can be acquired per person up to twofold, i.e., up to 60 hectares. However, this increase is not an automatic right but requires a special administrative decision depending on the nature of the investment and its contribution to the country’s economy.

2.2.2. District Surface Area Quota (10% Rule)

The most critical limitation introduced to prevent regional concentration and preserve demographic balance is the district-based quota. The total area of real estate acquired by foreign real persons within the boundaries of a district cannot exceed ten percent (10%) of the surface area subject to private property in that district.

The implementation of this rule is centrally monitored via the Land Registry and Cadastre Information System (TAKBIS). Especially in some coastal districts with high tourism potential or popular centers of metropolitan cities, when this 10% quota is filled, the General Directorate of Land Registry and Cadastre closes that district to foreign acquisition. Therefore, querying the occupancy rate in the relevant district before making an investment decision is of vital importance.

2.3. Citizens of Banned Countries and Historical Background

Although the principle of reciprocity has been abolished, the real estate acquisition of citizens of certain countries is completely banned due to Turkey’s national interests and historical hostilities. These bans cover countries outside the “Acquisition List” determined based on the authority given by the Land Registry Law.

In current practice, it is not possible for citizens of Syria, Armenia, North Korea, Cuba, and Nigeria to acquire real estate in Turkey.

Syrian Citizens: The ban on Syrian nationals, unlike others, is based on the “Law on Retaliation” (Mukabele-i Bilmisil Kanunu) No. 1062 dated 1927. During the process of Hatay’s accession to the motherland, upon the Syrian government’s confiscation of the properties of Turkish citizens, Turkey placed measures on the properties of Syrian citizens and banned new property acquisition. Therefore, it is legally impossible for a Syrian real person to obtain a title deed directly in their own name in Turkey.
Indirect Acquisition Route: While citizens of banned countries cannot acquire property directly as individuals, they can bypass this ban through a Turkish company (legal entity) they establish or partner with in Turkey (See Section 4). However, this process is also subject to strict security investigations and permissions.

3. Acquisition of Turkish Citizenship by Investment: Real Estate Investment and Monetary Thresholds

With the increase in global capital mobility, Turkey, like many countries, has activated a “Citizenship by Investment” program. The most popular pillar of this program is real estate investment. In the perspective of 2024 and 2025, this process involves not just a purchase transaction but a complex procedure including valuation, currency transfer, and title deed annotation.

3.1. Evolution of the Minimum Investment Amount and Current Status

With amendments made to the Regulation on the Implementation of the Turkish Citizenship Law, the minimum real estate investment amount required for citizenship has been revised over the years. Initially 1 million USD, this amount was reduced to 250,000 USD in 2018, and then raised to 400,000 USD considering increasing demand and real estate value appreciation.

Under current legislation, the purchase of real estate worth 400,000 US Dollars or equivalent foreign currency is mandatory. Whether this amount is met is audited through the cross-check of three different data points:

Official Deed Value: The sales price declared in the title deed transfer document.
Valuation Report: The market value in the report prepared by CMB-licensed valuation experts.
Bank Receipt: The actual payment amount made from the buyer to the seller.

It is mandatory that all three values meet the minimum 400,000 USD (or equivalent currency) condition.

3.2. Citizenship Application via Preliminary Sales Contract

For citizenship acquisition, the completion of the title deed transfer is not a prerequisite. For purchases from ongoing projects or structures where condominium ownership has not yet been established, issuing a “Preliminary Sales Contract for Real Estate in the Form of Arrangement” (Notarized) is accepted as sufficient.

The conditions sought in this method are:

The promised sales price in the contract must be at least 400,000 USD.
The entire amount must be paid in cash/advance (Installment sales are not accepted).
The contract must be annotated in the land registry, with a commitment not to transfer or abandon it for 3 years.

Notably, payments made after 07.12.2018 are taken into account; payments made before this date or installment payments made after the contract date are not included in the citizenship calculation.

3.3. Critical Document: Currency Purchase Certificate (DAB) and Financial Security

The Currency Purchase Certificate (DAB) requirement, which came into force as of January 2022 and is regulated by the Central Bank’s capital movements circular, is one of the most important control mechanisms of the system. The foreign buyer must sell the foreign currency, which is the price of the real estate, to the Central Bank through a Turkish bank before the transaction.

The DAB Process operates as follows:

The foreign investor brings the foreign currency to the bank.
The bank exchanges the currency at the Central Bank rate and obtains Turkish Lira in return.
As a result of the transaction, the bank issues a “Currency Purchase Certificate”.
The obtained TL is sent to the seller’s account.

The land registry office requests this DAB document during the transaction. The main purpose of this practice is to register foreign capital entering the country, reduce the risk of money laundering, and ensure that foreign currency contributes directly to Central Bank reserves. Without a DAB document, a title deed transfer or citizenship application cannot be made.

3.4. Valuation Report and GABIM System

To determine the real value of the property, obtaining a Real Estate Valuation Report via the Web-Tapu system is mandatory. These reports are managed through the Real Estate Information Center (GABIM). The report has a validity period of 3 months from the date of issue. If the transaction is not completed within 3 months, a new report must be obtained. This rule ensures that the value remains current against market fluctuations.

4. The Dual Distinction in Real Estate Acquisition by Legal Entities: Foreign Companies and Turkish Companies with Foreign Capital

One of the most confused issues in terms of legal technique is the status of foreign legal entities. Here, the legislation makes a sharp distinction based on the “place of establishment” of the company: Companies established in a foreign country and foreign-capitalized companies established in Turkey are subject to completely different regimes.

The table below summarizes the basic differences between these two types of companies:

Feature	Company Established in a Foreign Country (Art. 35)	Foreign Capital Company Established in Turkey (Art. 36)
Legal Basis	Land Registry Law Article 35	Land Registry Law Article 36 & Law No. 4875
Legal Status	Foreign Company	Turkish Company (Domestic Status)
Acquisition Right	Generally BANNED (Except for exceptions)	FREE (Limited by field of activity)
Permission Authority	Special Laws (Petroleum, Tourism, etc.)	Governorship Commission (Security Zone Control)
Purpose Limit	Only for the purpose in the special law	Limited to activity subjects in the articles of association

4.1. Trading Companies Established in Foreign Countries (Article 35 Regime)

Trading companies possessing legal personality established in foreign countries according to the laws of those countries (e.g., a GmbH in Germany or a Ltd. in the UK) cannot acquire real estate in Turkey. Article 35 of the Land Registry Law imposes a general ban for these companies, but reserves “special law provisions.”

Exceptional cases where these companies can acquire real estate are:

Petroleum Law: Foreign companies holding petroleum exploration and operation licenses.
Tourism Incentive Law: Projects that have received a tourism investment certificate.
Industrial Zones Law: Investments in designated industrial zones.

Apart from these exceptions, it is not possible for a company abroad to buy an apartment or land in Turkey for investment purposes. Foreign associations and foundations cannot acquire real estate under any circumstances.

4.2. Foreign Capital Companies Established in Turkey (Article 36 Regime)

The most functional way for foreign investors to acquire real estate in Turkey is to establish a company in Turkey. Under the Foreign Direct Investment Law No. 4875, companies established by foreigners in Turkey have “Turkish Company” status. However, due to the presence of foreign elements in the partnership structure, they are subject to a special audit process pursuant to Article 36 of the Land Registry Law.

4.2.1. Scope and Definition

Companies falling under the scope of Article 36 are:

Companies where foreign real persons or foreign companies hold 50% or more of the shares.
Companies where foreign partners have the authority to appoint or dismiss the majority of company managers.

These companies can acquire real estate ownership to carry out the activity subjects specified in their articles of association. For example, if a software company does not have “real estate trading” in its articles of association, it cannot buy and sell housing for commercial purposes; it can only buy property to use as an administrative building.

4.2.2. Governorship Commission and Security Investigation

Acquisition requests of these companies are forwarded by the Land Registry Office to a commission within the Governorship. The commission examines whether the real estate remains within military forbidden zones, military security zones, or other areas of strategic importance.

If the real estate is outside these prohibited areas, the Governorship gives “approval” and the transaction is completed.
If the real estate is in a prohibited area, acquisition permission is not granted (or the opinion of the General Staff is sought).

Although this process adds a bureaucratic stage unlike for domestic companies, it is the widest door for foreign investors to acquire property in the Turkish market.

5. Acquisition of Agricultural Land: Project Obligation and Sustainability Principles

Due to food security and the strategic importance of agricultural production, the sale of agricultural lands (fields, vineyards, orchards) to foreigners is tied to much stricter conditions than housing sales. The state aims to prevent agricultural lands from being used as speculative investment tools and remaining idle.

5.1. Letter of Undertaking and Project Development Process

When foreign real persons purchase real estate classified as agricultural land, they must submit a letter of undertaking stating that they will use this land for agricultural production purposes. The purchase transaction cannot be viewed as a “vacant land investment.”

The process proceeds with the following steps:

Application: The foreign buyer applies to the Land Registry Office.
Permission Request: The Land Registry Office forwards the request to the Provincial Directorate of Agriculture and Forestry.
Evaluation: The Agriculture Directorate examines the size and nature of the land and decides whether it is suitable for foreign sale.
Registration and Annotation: If deemed appropriate, the title deed transfer is made, and an annotation stating “Agricultural project will be prepared” is entered into the land registry.

5.2. Two-Year Rule and Ministry Monitoring

After obtaining acquisition permission, the foreign investor’s most critical obligation begins: Obligation to Submit a Project Within 2 Years.

The foreign owner must submit a detailed project regarding what kind of agricultural activity (walnut orchard, greenhouse cultivation, livestock farming, etc.) they will carry out on the land to the approval of the Ministry of Agriculture and Forestry within two years at the latest from the title deed transfer date.

If the Ministry approves the submitted project, the investor is obliged to implement the project within the committed time. Whether the project is implemented or not is periodically inspected by local agriculture directorates.

5.3. Liquidation Sanction (Loss of Ownership)

The heaviest sanction in the legislation is regulated in the 6th paragraph of Article 35 of the Land Registry Law. The liquidation process is operated in the following cases:

If an agricultural project is not submitted within the period (2 years),
If the approved project is not realized within the period,
If the land is used contrary to the purpose of acquisition (e.g., building illegal housing on agricultural land).

In these cases, the Ministry of Finance sends a warning to the owner, giving a period not exceeding one yearto liquidate (sell) the immovable. If the owner does not sell the immovable within this period, it is forcibly sold by the state, converted into cash, and the amount obtained is paid to the right holder. This provision demonstrates the certainty of the state will regarding the protection of agricultural lands.

6. Prohibited Zones and Security Restrictions: Geopolitical Boundaries

The strictest and inflexible limits on real estate acquisition by foreigners are positional prohibitions concerning national security. Turkey’s geopolitical position necessitates the protection of military and strategic zones.

6.1. Military Forbidden Zones and Security Zones

In areas determined pursuant to the Military Forbidden Zones and Security Zones Law No. 2565, it is prohibited for foreign real persons and legal entities to acquire, rent, and in some cases even enter these zones.

These zones are divided into two:

First Degree Military Forbidden Zones: They cannot be subject to private property in any way; foreigners cannot acquire them.
Second Degree Military Forbidden Zones: Subject to the permission of the Governorship and the General Staff, permission may be granted in very exceptional cases.

6.2. Special Security Zones and Strategic Areas

In addition to military zones, foreign acquisition is also subject to permission in “Special Security Zones” declared around strategic facilities such as power plants, pipelines, and airports. Governorship commissions (See Section 4.2.2) query the relation of the relevant parcel with these zones via maps in each application.

With technological infrastructure investments made in recent years, maps of military forbidden zones have been integrated into the Land Registry and Cadastre Information System (TAKBIS). In this way, when a foreign buyer applies, the system can automatically detect whether the parcel is in a prohibited zone, speeding up the process. Military correspondence that used to take months is now concluded in a much shorter time through digital queries.

7. Conclusion and Legal Foresights

Since 2012, real estate acquisition by foreigners in Turkey has been managed by a hybrid regime blending free market economy principles with national security priorities. The abolition of the reciprocity principle and citizenship incentives have made Turkey an attractive market for global investors. However, as detailed in our report, this process is not a simple mechanism where “he who pays the money gets the title deed.”

The main takeaways that investors and lawyers should pay attention to are:

Status Determination: Whether the investor is a real person or a company fundamentally changes the applicable regime (Art. 35 vs. Art. 36). Incorporation is a solution door for commercial investments and citizens of banned countries.
Citizenship Details: The 400,000 USD limit is just the beginning; the harmony between the valuation report, DAB document, and bank receipts are the technical details determining the success of the process.
Agricultural Land Risk: Agricultural land investments harbor serious risks for passive investors due to the “project obligation.” The threat of liquidation must be taken seriously.
Security Boundaries: The importance of location precedes the right to property. Military and security zones constitute the absolute limit of the right to acquisition.

In the upcoming period, depending on migration policies and global economic fluctuations, it is probable that the investment amount required for citizenship will be increased or district-based quotas (10% limit) will be applied more strictly. Therefore, close monitoring of legislative changes and conducting every transaction under the supervision of expert lawyers is essential to prevent loss of rights.

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