New Regulation About Currency for Real Estate Purchases in Turkey

The amendment made to the conditions of acceptance of Turkish citizenship within the scope of protection of the Turkish lira entered into force after being published in the Official Gazette on January 24, 2022. With this regulation published in the Official Gazette, foreigners are obliged to exchange foreign currency in Turkish Lira for real estate purchases from now on. Foreign real estate buyers are obligated to first send their money in foreign currency to a bank operating in Turkey to convert them into Turkish Lira when purchasing real estate. With the new regulation, foreigners who want to buy houses or land have to obtain a foreign currency exchange document.

Within the scope of the regulation published in the Official Gazette on January 24, 2022, foreigners are obliged to exchange foreign currency for real estate purchases in Turkey. According to the new regulation, foreigners will sell their foreign currency to the Central Bank through a bank in real estate purchase transactions in Turkey. Afterward, it is obligatory to submit the foreign currency exchange document issued by the bank to the land registry directorate during the title deed transactions. The currency to be exchanged must be equal to the entire sale price of the property.

The foreign currency exchange document must contain the name, surname, passport number, and foreigner's identification number of the foreigner for whom the foreign currency is exchanged. It is obligatory to submit this document in the title deed delivery and Turkish citizenship transactions. People who do not have citizenship ties with the Republic of Turkey will not be able to purchase real estate without a foreign currency exchange document.

Within the scope of the regulation, it will not be possible for foreign real estate investors to purchase real estate and transfer title deeds without this document, which they will submit to the Land Registry Office as proof that they have converted their foreign currency into Turkish lira. The document issued after the currency exchange has been carried out should contain the following information:

- Name and surname of the foreign investor who performs foreign currency exchange transactions

- Passport number or foreigner identification number

- USD equivalent of the foreign currency purchased (TL value is included in all cases)

- There should be a statement stating that this foreign exchange was carried out within the scope of “Article 13 of the Circular on Capital Movements”.

FAQ Regarding Foreign Currency Exchange Obligation in Real Estate Purchases

• Is it necessary to submit a foreign currency exchange certificate for real estate purchased before the effective date of this application?

No, payment receipts will continue to be accepted for real estate purchases made before January 24, 2022, and there is no need for a foreign currency purchase document. However, payments made by hand payment, etc. methods will not be accepted, and the bank-approved receipt must be submitted to the Land Registry Directorate.

• Where should currency exchange be made?

Currency exchange must be done at a bank operating in Turkey or at the Central Bank. It is not possible to use foreign currency exchanged by foreign exchange offices in real estate purchase transactions.

• How much currency should be exchanged for real estate purchases?

Following Article 3 of the Capital Movements Circular of the Central Bank of the Republic of Turkey, the foreign currency should be exchanged in the amount of the entire sales price.

• Should the foreigner exchange the foreign currency exchange at the bank himself/herself?

No, foreign currency exchange can also be made by the buyer or seller of the relevant real estate, their proxies, or representatives.

• At which stage of the real estate purchase process should I exchange the foreign currency?

The foreign currency must be exchanged before the title deed transactions and a foreign currency purchase document must be submitted to the title deed directorate before the sale. It is not possible to exchange foreign currency after the sales transactions are made at the title deed.

• Is there an obligation to exchange foreign currency in citizenship transactions through real estate?

Regardless of real estate acquisition or citizenship acquisition, a foreigner must perform a foreign currency exchange transaction at a bank operating in Turkey or at the Central Bank during the process of purchasing real estate in Turkey.

• Can the currency be transferred to the seller's account first and then exchanged?

Yes, the currency can be transferred to the seller's account first and then sold by the seller to a bank for exchange with the Central Bank. The important point to note here is that the foreign exchange purchase document must be made before the transaction.