Recent Developments
The Central Bank of the Republic of Türkiye (the "CBRT") made important amendments to Article 13 of the Capital Movements Circular (the "Circular"), which sets out the principles applicable to property acquisition. With the amendments to the Circular, the CBRT has introduced additional provisions to the FX payment requirement for non-Turkish citizens' property acquisitions. Please refer to our legal alert regarding the FX payment requirement for property acquisitions by non-Turkish citizens here.
What do the additional provisions bring?
- The upfront payment obligations under promise to sell agreements which non-Turkish citizens are parties to will need to be fulfilled in foreign currency.
- The payment obligations under property sale agreements and promise to sell agreements which non-Turkish citizens are parties to cannot be performed through statutory mortgages (kanuni ipotek), except in relation to debts owed to public institutions.
- Real persons residing abroad who are non-Turkish citizens can only finance their property acquisitions in Türkiye by utilizing FX loans. The bank will deposit the loan amount to the seller's account in Turkish Liras.
- Among the financial leasing agreements to be concluded with real persons residing abroad who are non-Turkish citizens, those relating to the acquisition of property can only be drawn up in FX and the payments to be made in FX will require an FX purchase document.
Conclusion
By these amendments, the Circular clarified the uncertainties relating to the FX payment requirement for property acquisitions of non-Turkish citizens.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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