Real Estate

The primary legislation governing real estate in Türkiye is as follows:

• Civil Code (Law 4721): The fourth book of the code, which focuses on property law, is fundamental to real estate regulation. It covers crucial aspects such as:
• • the definitions and types of real estate;
  • property law;
  • ownership rights; and
  • registration of limited real rights.
• Zoning Law (3194): This law governs land planning and development.
• Cadastral Law (3402): This law is particularly significant for unplanned areas and land registration.
• Condominium Law (634): This is the primary statute governing property constructed on zoned land that has transitioned to condominium ownership.
• Code of Obligations (Law 6098): This code governs many real estate-related matters, including:
• • lease relationships; and
  • construction agreements in exchange for flat ownership.
• Urban Transformation Law (6306): This law regulates redevelopment in disaster-prone areas.
• Real Estate Tax Law (1319): This law governs the taxation aspects of real estate.

Additionally, several supplementary laws play essential roles in specific areas of real estate:

• Law on Protection of Cultural and Natural Assets (2863): This law is relevant to properties with historical or cultural significance.
• Land Registry Law (2644): This law governs the registration and transfer of real estate.

These laws form a comprehensive legal framework that regulates various aspects of real estate transactions, ownership, development and management in Türkiye. The legal landscape is subject to periodic updates and amendments, so it is crucial for real estate sector professionals to stay informed of the latest changes.

In Türkiye, real estate classification is multifaceted, with several key distinctions shaping the applicable legal regimes. Properties are primarily categorised based on:

• their zoning status;
• their registration in the Land Registry; and
• whether they:
• • are subject to private ownership; or
  • fall under the public domain.

This intricate classification system ensures that various types of real estate are governed by appropriate legal frameworks, considering their unique characteristics and intended uses. Some of the most common regimes include the following:

• The Condominium Law (634) governs multi-unit properties.
• The Urban Transformation Law (6306) regulates redevelopment in disaster-prone areas.
• The Soil Preservation and Land Use Law (5403) prevents the fragmentation of agricultural land and regulates non-agricultural use. Foreign ownership restrictions apply.
• The Forest Law (6831) strictly protects forests, limiting development in these areas.
• The Coastal Law (3621) restricts construction near shorelines.
• The Law on Protection of Cultural and Natural Assets (2863) regulates renovations of historically significant properties.
• The Tourism Incentive Law (2634) offers incentives for tourism-related investments.
• The Organised Industrial Zones Law (4562) and the Free Zones Law (3218) regulate industrial facilities and export-oriented production.
• Law on Utilization of Renewable Energy Resources for the Purpose of Generating Electrical Energy (5346)offers incentives for renewable energy projects.
• The Expropriation Law (2942) allows the state to acquire private land for public projects.

These statutes illustrate the diverse range of special regimes available under Turkish real estate law, each addressing specific property types and uses.

The main types of ownership rights include the following:

• Full ownership: This grants complete ownership rights, allowing the owner to use, benefit from and dispose of the property as desired within legal limits. This is the most comprehensive form of property ownership in Türkiye.
• Co-ownership: Multiple individuals share ownership of the entire property, each holding a specific percentage. Co-owners have rights over the whole property, not just a physical portion. While co-owners can generally use their share independently, other co-owners have a right of pre-emption if a share is sold to a third party. This right allows them to purchase the share under the same conditions as are offered to the third party.
• Joint ownership: Property is owned collectively, often through inheritance or certain partnerships. Joint owners must make all decisions regarding the property unanimously. Individual owners cannot dispose of their shares independently.
• Condominium ownership: This is regulated by the Condominium Law (634) and applies to multi-unit buildings. Individuals own their specific units, while common areas are shared. Unit owners have exclusive rights over their individual units and proportional rights over common areas.

Turkish law also recognises limited real rights which are not full ownership but grant specific rights over property. These include:

• usufruct;
• superficies; and
• easement rights.

These rights allow for the use or benefit of a property under certain conditions without full ownership.

In Türkiye, the most common ownership structures for real estate are as follows:

• Individual ownership is the most prevalent structure, in which a single person or entity owns the property outright. This is widely used for:
• • residential homes;
  • commercial properties; and
  • land parcels.
• Co-ownership is commonly employed for:
• • agricultural land;
  • large plots; and
  • sometimes, commercial properties.
• Multiple individuals share ownership of the entire property, each holding a specific percentage.
• Condominium ownership is extensively used for:
• • residential apartments; and
  • commercial units in multi-story buildings.
• This structure allows for individual ownership of specific units and shared ownership of common areas.
• Time-share ownership is primarily utilised for holiday resorts and vacation properties. It allows multiple parties to share ownership of a property, each having the right to use it for a specific period annually.

These structures offer a range of options that can be tailored to various types of properties and purposes. The choice often depends on factors such as:

• the nature of the property;
• the number of owners;
• the intended use; and
• long-term objectives.

Türkiye’s real estate regulations balance property rights with public interest, national security and environmental concerns. Critical restrictions governing real estate acquisition and usage include the following:

• Acquisition restrictions:
• • General restrictions (for all buyers):
  • • Zoning laws and land use regulations;
    • Restrictions on the fragmentation of agricultural land; and
    • Special rules for protected areas (eg, historical, natural and archaeological sites).
  • For foreigners:
  • • Limited to 30 hectares nationwide;
    • Maximum 10% foreign ownership per district;
    • Prohibited in military zones and some strategic areas; and
    • Potentially, special permissions required for certain regions.
  • Special cases:
  • • ‘Zoning peace’ properties – non-transferable until fully compliant with regulations.
• Usage restrictions:
• • General restrictions:
  • • Zoning laws and building codes;
    • Environmental protection regulations; and
    • Coastal law limitations on seaside properties.
  • Civil Code restrictions (examples):
  • • Neighbourhood law (eg, nuisance, view rights);
    • Easement rights; and
    • Pre-emption rights.
  • Specific property types:
  • • Condominium law for multi-unit properties; and
    • Agricultural land use limitations.
  • Risk-related restrictions:
  • • Potential mandatory measures in disaster-prone areas, including measures relating to evacuation, demolition or reconstruction; and
    • Particular safety criteria for renovations or new developments in these areas.

The above list is not exhaustive and serves as a general guide only.

In Türkiye, ownership of land and buildings constructed thereon is generally not legally separable. This principle is based on the concept of the unity of land and building, enshrined in the Civil Code.

Key points to consider include the following:

• General rule: According to Article 718 of the Civil Code, buildings and other structures permanently attached to land are considered integral parts of that land. This means that land ownership typically includes ownership of any buildings thereon.
• Exceptions: There are some limited exceptions to this general rule:
• • Right of construction: This easement allows a person to own a building on someone else’s land for a specified period (up to 100 years). This right can be registered in the Land Registry.
  • Condominium ownership: In multi-unit buildings, individual units can be owned separately under the Condominium Law. However, unit owners also have shared ownership of the land and common areas.
  • Temporary structures: Buildings or structures not permanently attached to the land may be owned separately from the land, but these are not generally considered as real estate.
• Legal implications: The unity principle affects various aspects of real estate transactions, including mortgages, transfers and taxation, as the land and building are typically treated as a single entity.

Thus, while there are exceptions, the overarching principle in Turkish law is that land and the buildings permanently constructed thereon form an indivisible unit in terms of ownership.

In Türkiye, several security interests can be attached to real estate, primarily governed by the Civil Code and the Land Registry Law. The main types include the following:

• Mortgage: This is the most common form registered in the Land Registry. Priority is determined by the registration date.
• Liens: These arise from unpaid debts, including tax liens and judgment liens. Tax liens often have statutory priority.
• Equitable mortgage: A less formal version, registered and prioritised similarly to regular mortgages.
• Construction liens: These are available to contractors and suppliers for unpaid work or materials. Priority depends on the registration date.
• Rights of easement: While not strictly security interests, these can affect property value and use.
• Pledge of rent: This allows for the pledging of rental income from the property.
• Annotation of personal rights: This can secure certain personal rights related to the property.

Prioritisation generally follows the principle of ‘first in time, first in right’, based on the registration date in the Land Registry. Exceptions include statutory liens and some public claims, which may have priority over earlier registered interests.

Unless the mortgagees have explicitly agreed otherwise among themselves, multiple mortgages are ranked according to their registration dates in the Land Registry.

All security interests must be registered in the Land Registry to be effective against third parties. This registration system provides for transparency and certainty in determining the priority of competing claims.

The registration requirement is fundamental to securing creditors’ rights under the Turkish legal framework by:

• ensuring a clear hierarchy of claims; and
• protecting the interests of all parties involved in real estate financing and transactions.

The General Directorate of Land Registry and Cadastre administers the land register in Türkiye. This institution operates under the Ministry of Environment and Urbanisation.

In Türkiye, registration is mandatory for all but a limited set of real estate rights, including:

• property ownership transfers;
• mortgages; and
• certain easements.

Failure to register these rights can result in:

• a lack of legal effect against third parties; and
• the potential invalidity of the transaction.

The general principle that unregistered rights do not affect third parties has a notable exception in tenancy law: tenants enjoy statutory protections even without annotation, especially in residential and roofed commercial properties.

Key points to note include the following:

• Registration and annotation are distinct legal concepts.
• Only rights allowed explicitly by law can be registered.
• Lease agreements can be annotated but not registered, regardless of duration.
• Annotation is voluntary and provides notice to third parties without creating a real right.

• Formal requirements:
• • The personal presence of both parties (or representatives with power of attorney) before Land Registry officials;
  • Official deed preparation by the Land Registry Office; and
  • Payment of applicable fees and taxes.
• Required documents:
• • The title deed;
  • Valid identification documents (eg, passport for foreigners);
  • A property value declaration;
  • Compulsory earthquake insurance for independent units in buildings;
  • A property tax clearance certificate from the municipality (for sales);
  • Power of attorney (if relevant), notarised and apostilled; and
  • For legal entities, additional documents including:
  • • a trade registry extract;
    • the articles of association;
    • a board resolution; and
    • signature circulars.
• Foreign documents must be translated into Turkish by a sworn translator then notarised, apostilled or legalised by the Turkish consulate.
• Exceptional cases: Some cases may require additional documentation, including:
• • military clearance for foreign buyers;
  • a bank release letter for mortgaged properties; and
  • an occupancy permit for new construction.

• Initial application:
• • The parties submit an online appointment request through the Land Registry web portal.
  • Registry officials conduct a preliminary file check to ensure that all necessary documents are in order.
  • An appointment date is assigned for the registration.
• Registration day:
• • Both parties (or their representatives) appear at the registry at the appointed time.
  • Officials verify the identities of the parties.
  • The official deed is prepared by the registry.
  • Required fees are calculated and payment receipts are verified.
  • Completion:
  • • The parties sign the official deed.
    • The registration is completed in the Land Registry system.
    • A new title deed is issued to the new owner.

The entire process generally takes two to three hours on the registration day, assuming that all required documents are complete and accurate.

In Türkiye, Land Registry records are publicly accessible, but with certain restrictions and conditions:

• Access rights:
• • Parties with a legitimate interest can request information from the Land Registry.
  • The concept of legitimate interest requires showing a valid reason or legal connection to the property.
  • Property owners have unrestricted access to their records.
• Request process:
• • Applications must be made in person at the Land Registry office.
  • Applicants must present valid identification.
  • A written application stating the purpose of the request is required.
  • Payment of the prescribed fee is necessary.
• Restrictions:
• • Mass queries are not permitted.
  • Access is limited to specific properties; general browsing is not allowed.
  • Personal data protection laws may restrict access to certain information.

Online access is available through the TAKBIS (Land Registry and Cadastre Information System) system, but only to authorised professionals (eg, notaries, banks) and property owners for their records.

Under Turkish law, commercial leases are primarily distinguished on the basis of whether they are roofed workplaces, as this classification determines the application of specific protective provisions. However, in practice, the following types of commercial leases are common:

• traditional shop leases for individual retail units;
• office leases for business premises;
• shopping centre leases with specific provisions for retail spaces;
• industrial/warehouse leases for manufacturing and storage facilities;
• serviced office leases for furnished, ready-to-use office spaces; and
• virtual office leases that provide a business address and support services without a physical workspace.

The Code of Obligations governs commercial lease regulations in Türkiye, providing a structured framework with significant mandatory provisions that shape the leasing market.

Key mandatory provisions include the following:

• Rent must be determined in Turkish lira for parties residing in Türkiye.
• Rent increases are limited to the Consumer Price Index rate.
• Security deposits are capped at three months’ rent.
• Landlords cannot terminate the lease without just cause during the mandatory 10-year extension period.
• Tenants can terminate the lease by giving statutory notice.
• Subletting requires the landlord’s written consent for roofed workplaces.
• The assignment of lease requires the landlord’s consent, although such consent cannot be unreasonably withheld for commercial leases where the assignee demonstrates similar financial strength and business capability.

Certain terms remain negotiable, such as:

• the initial rent amount;
• the initial duration (fixed or indefinite);
• the allocation of operating expenses;
• the maintenance responsibilities; and
• revenue-based rent arrangements (common in shopping malls).

The legal framework, particularly concerning roofed workplace leases, provides substantial protection to tenants. However, it contrasts with the fast-paced nature of modern commercial relationships, especially in rapidly evolving metropolitan areas. While parties can negotiate some lease aspects, mandatory provisions significantly limit their autonomy, posing challenges in adapting to dynamic market conditions.

In Türkiye, commercial leases can be concluded verbally or in writing under the Code of Obligations, although verbal agreements are uncommon in practice due to evidentiary concerns. While notarisation is not mandatory, written lease agreements are effectively required for various administrative procedures.

Written documentation is essential for:

• business operation permits;
• utility subscriptions;
• municipal licences;
• tax office registrations;
• insurance requirements;
• banking transactions;
• commercial registry procedures; and
• social security registrations.

Although the law accepts verbal agreements as valid if properly evidenced, the practical necessity of documentation in commercial operations makes written lease agreements standard practice in the Turkish commercial real estate market.

In Türkiye, the process for concluding a commercial lease follows a standard pattern. Essential steps include:

• due diligence of property title and permits;
• the negotiation of essential terms;
• the execution of lease agreement;
• the payment of stamp duty within 30 days;
• the payment of security deposit;
• the handover of the premises;
• registration for utility services; and
• the receipt of business permits.

For legal entities, verification of signatory authority and corporate documents is additionally required.

In Türkiye, the Code of Obligations defines core obligations and liabilities in commercial leases.

The landlord’s primary obligations are as follows:

• Deliver property that is suitable for contractual use;
• Maintain property in suitable condition throughout the lease term;
• Bear essential/major repair costs; and
• Pay property taxes.

The tenant’s primary obligations are as follows:

• Pay rent in a timely manner;
• Use property with due care;
• Use property in accordance with the agreed purpose;
• Report necessary repairs;
• Bear minor repair and cleaning costs; and
• Return the property in received condition (normal wear accepted).

The consequences of breach include:

• in case of material breaches, termination with appropriate notice; and
• compensation for damages.

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In Türkiye, rental income from commercial properties is subject to several taxes.

The primary taxes are as follows:

• Income/corporate tax: This varies based on the taxpayer’s status:
• • For individuals: Progressive rates from 15% to 40.
  • For corporations: A 25% flat rate.
• Value added tax: Generally, 20% (some exemptions apply).

Additional charges include the following:

• Stamp duty: 0.189% of the contract value.
• Withholding tax: 20% for corporate tenants.

Tax base considerations include the following:

• Expenses may be deducted from rental income.
• Depreciation can be claimed.
• Building maintenance costs are deductible.
• Real estate tax is deductible.

In Türkiye, the allocation of maintenance and repair costs in commercial leases is regulated by Articles 302–303 of the Code of Obligations:

Costs can be allocated as follows:

• Operating expenses can be transferred to the tenant (utilities, cleaning, security).
• Minor repairs and routine maintenance can be the tenant’s responsibility.
• Essential/major repairs must remain the landlord’s responsibility.
• Property tax and building insurance legally remain the landlord’s obligation.

While parties can agree to shift certain operational costs to tenants, fundamental landlord obligations cannot be entirely transferred under mandatory provisions, making pure triple net leases incompatible with Turkish law.

The primary methods for resolving landlord and tenant disputes in commercial leases are

as follows:

• mandatory mediation, required for all lease disputes before litigation;
• written notice (commonly through a notary for evidential certainty);
• civil court of peace proceedings (regardless of the parties’ merchant status); and
• execution proceedings for rent collection.

Common issues of dispute include the following:

• rent determination cases;
• rent payment defaults;
• lease termination;
• property maintenance/repair;
• return of security deposit; and
• eviction requests.

Considering the lengthy duration of lease litigation in Turkish courts, careful drafting of initial lease agreements is crucial to prevent disputes. While written notice can be served through various means, notary notices are standard practice for evidentiary purposes. Rent determination cases constitute a significant portion of lease disputes, often requiring extensive court proceedings.

In Türkiye, landlords commonly require various forms of security to guarantee tenants’ obligations.

Common security types include the following:

• cash deposit (typically two to three months’ rent);
• bank letters of guarantee;
• suretyship (both personal and corporate);
• security checks and promissory notes (kept without endorsement);
• parent company guarantees for corporate tenants; and
• advance payment of rent.

While the law does not mandate specific security types, a market practice heavily relies on cash deposits and suretyship for commercial leases, often combined with security checks or promissory notes held as collateral.

In Türkiye, real estate transactions take various forms.

The primary transaction methods include the following:

• direct asset purchases (at the Land Registry or before a notary public);
• preliminary sales contracts through a notary public;
• share deals for company-owned properties;
• transfers of commercial enterprises;
• transfers through inheritance; and
• construction against land/flat.

Essential requirements for direct transfers include the following:

• official registration at the Land Registry;
• notarised power of attorney if through proxy; and
• payment through official channels.

While most transactions require Land Registry registration, certain transfers occur by operation of law. Recent legislation enables direct sales at notary offices, although other property rights can only be established through the Land Registry.

In Türkiye, real estate transactions typically involve the following players.

Key participants include the following:

• Land Registry officials (mandatory);
• real estate agents;
• notaries (for powers of attorney/preliminary contracts);
• banks (for payments/mortgages); and
• lawyers.

While other professionals such as surveyors, appraisers or tax advisers may be involved, the above participants represent the core players in most transactions. Land Registry officials are indispensable as all property transfers require official registration.

While there is no explicit statutory duty of disclosure in Türkiye, sellers are bound by key warranties under the Code of Obligations. The Land Registry system protects good-faith purchasers against unregistered rights through the principle of public trust in land records. Notably, a fact not disclosed to the buyer will generally not be validly excluded from warranty, even with a general warranty disclaimer.

Statutory warranties cover:

• hidden defects affecting property value or use;
• third-party claims not visible in the Land Registry;
• conformity with promised qualities;
• construction permits and zoning compliance; and
• environmental conditions (including soil contamination).

For newly constructed buildings, sellers typically assign warranty rights against contractors to buyers. For older properties, parties often negotiate specific warranty limitations, particularly regarding the building’s current condition.

Breach of warranties entitles buyers to:

• rescission;
• price reductions; or
• damages.

Parties commonly reinforce these statutory protections with contractual penalties in commercial transactions.

Due diligence in Turkish real estate transactions starts with Land Registry records, which benefit from the solid legal presumption of accuracy and completeness.

Essential examinations include the following:

• Land Registry review (title deed, encumbrances, historical data);
• zoning status and building permits;
• municipal restrictions and requirements;
• tax and utility payment status; and
• construction compliance.

Technical investigations often include:

• a building condition assessment;
• environmental compliance;
• archaeological restrictions;
• lease agreements (if any); and
• neighbouring rights.

The scope may expand based on property type and intended use, with particular attention paid to unregistered public claims that might affect the property despite Land Registry protection.

In Türkiye, real estate transactions must be executed before the Land Registry office (or, recently, notaries public for direct sales). Land Registry officials must:

• verify the parties’ identities through official identification documents;
• for foreign buyers, verify that they have obtained the necessary permits from the relevant authorities before proceeding with the registration
• verify the property’s current status by examining the Land Registry records.

Where there are existing mortgages, the mortgage holder’s consent is typically required for the transaction. Both parties must pay title deed fees at statutory rates before registration.

Special authorisations – such as foreign acquisitions, agricultural lands or protected buildings – may be required in certain cases. These authorisations must be obtained from relevant administrative authorities. Certain mandatory documents must further be presented, including:

• municipal clearance certificates regarding property tax and other local charges;
• mandatory earthquake insurance; and
• an energy performance certificate for buildings.

The transaction is completed by executing the official deed and registration at the Land Registry.

In Türkiye, the process for concluding a real estate transaction typically includes multiple stages, as follows.

Preliminary phase: For high-value properties, parties often begin with due diligence and negotiations, sometimes executing a preliminary sales contract before a notary public. This phase may take several weeks depending on the property’s complexity and the required documentation.

Official transaction: The main transaction occurs at the Land Registry office, where officials verify:

• the identity and authority of the parties;
• the current status of the property;
• the requisite clearance certificates;
• mandatory insurance; and
• special permits (if applicable).

The costs typically include the following:

• title deed fees (2% each for buyer and seller);
• property tax clearance fees;
• notary fees (if applicable);
• real estate agent commission (if any); and
• legal counsel fees (each party bears own costs).

Timeline: While the actual registration can be completed in a day with proper documentation, the entire process usually takes several weeks, particularly when obtaining necessary certificates or permits. Foreign buyers may face longer timelines due to additional requirements.

The transaction concludes with official deed execution and registration in the Land Registry, at which point ownership transfers.

For direct property sales, only the official deed executed at the Land Registry is binding for transfer. While preliminary contracts must be notarised to be valid, they:

• mainly serve to secure the parties’ positions; and
• may include additional terms such as earnest money or contractual penalties.

The parties’ main obligations are:

• the transfer of property; and
• payment of the purchase price.

The seller must transfer the property free from undisclosed defects and in the promised condition; while the buyer must pay the purchase price and accept delivery if the property conforms. Both parties must cooperate for registration and share title deed fees (2% each).

The purchase price is often secured through bank-blocked accounts between the preliminary contract and final registration, particularly in high-value transactions. Earnest money or downpayments are commonly included in preliminary contracts to secure the parties’ positions.

If obligations are breached, the affected party may:

• demand specific performance;
• claim damages; or
• seek contract rescission for material breaches.

Additional remedies may be available if specified in the preliminary contract. For share deals involving property-holding companies, obligations are typically detailed in separate share purchase agreements, following different rules.

In Türkiye, real estate transactions are subject to several taxes and fees, with the title deed fee being the primary cost. This fee is set at 4% of the declared value and shared equally between buyer and seller. Additionally, Land Registry offices charge revolving fund fees for their services. All property transfers recorded in the Land Registry are subject to these fees, although share deals may be structured differently for tax efficiency.

Capital gains taxation varies by the seller’s status. Individuals may benefit from exemptions based on holding period, while companies are subject to corporate tax on their profit. Real estate investment companies enjoy a special tax regime.

Value-added tax (VAT) application varies significantly based on multiple factors. For first sales from developers, rates differ depending on:

• the property type (residential/commercial);
• the size;
• the location;
• the construction permit date; and
• whether it is part of an urban transformation project.

Subsequent sales are typically VAT exempt unless the seller is a commercial enterprise.

Additional costs include:

• various administrative fees for Land Registry procedures;
• notary services (if required); and
• property tax clearance certificates.

Real estate financing in the Turkish market is predominantly provided through regulated financial institutions, comprising:

• commercial banks;
• participation banks operating under Islamic finance principles; and
• financial leasing companies.

While commercial banks maintain a significant market share in conventional real estate financing instruments, participation banks and leasing companies serve as alternative financing sources, particularly in structured real estate transactions and commercial property investments.

The primary financing mechanisms include:

• traditional mortgage loans for residential and commercial properties;
• construction project finance facilities; and
• real estate lease financing.

For large-scale commercial real estate projects, syndicated loans and structured finance solutions are frequently utilised, often incorporating security packages with:

• mortgage assignments;
• share pledges; and
• receivable assignments.

Lenders in Türkiye require comprehensive documentation covering three main categories for real estate finance applications:

• The identity and personal documentation requirements include:
• • national ID or passport copies;
  • proof of residence; and
  • marital status information.
• Financial capacity documentation comprises:
• • income verification through payroll records;
  • bank statements; and
  • tax returns for self-employed applicants.
• For property-related requirements, lenders mandate:
• • title deed copies;
  • valuation reports from CMB - Capital Markets Board - approved appraisal companies; and
  • zoning status certificates.

Additional documentation includes:

• credit bureau reports;
• asset-liability statements; and
• guarantor information where applicable.

Corporate borrowers must further provide:

• trade registry gazettes;
• tax registration certificates; and
• specimen signatures.

Construction finance applications require:

• project plans;
• permits; and
• cost analyses.

Lenders also require mandatory earthquake insurance (DASK) and may request life insurance for loan approval.

The title deed must be free of encumbrances such as mortgages, liens, or usufruct rights unless they are part of the financing structure.

Lenders in the Turkish real estate finance market primarily secure their interests through:

• first-degree mortgages registered with the Land Registry;
• assignments of receivables including rental income and insurance proceeds; and
• where applicable, share pledges over the property-owning company.

For construction projects, lenders typically require:

• mortgages that cover the increasing value of the construction; and
• the assignment of construction insurance and contractor agreements.

Personal or corporate guarantees may be required as additional security depending on the transaction structure.

Türkiye’s real estate finance process typically begins with a preliminary assessment of:

• the borrower’s creditworthiness; and
• the property’s eligibility.

Once the initial evaluation is complete, the property undergoes a mandatory valuation by an authorised appraisal company. Insurance requirements form a substantial component, including:

• mandatory comprehensive property insurance;
• life insurance for individual borrowers; and
• depending on the transaction structure, additional coverage such as construction all-risk or loss of rent insurance.

Lenders are typically named as the loss payee and beneficiary in these insurance policies.

Primary costs include:

• mortgage establishment fees;
• property valuation fees;
• mortgage release fees, which are payable to the Land Registry; and
• various insurance premiums.

Annual insurance costs – particularly life and property insurance premiums – constitute a significant portion of ongoing expenses. Additional costs include:

• notary fees for security documents and banking and administrative fees; and
• stamp duty and banking and insurance transaction tax for loan agreements and security documents.

In Türkiye, mortgage enforcement in real estate finance is designed to favour lenders with an efficient, direct process. Banks can initiate enforcement by presenting the mortgage deed and a notarised payment notice directly to the execution office without a court decision. This streamlined approach allows lenders to bypass the judicial process, accelerating foreclosure through a public auction.

The enforcement process typically takes one to two years and proceeds through public auction unless the borrower cures the default. Lenders can simultaneously pursue other securities, such as assigned receivables, rental income or guarantees, enhancing their recovery options.

Individual buyers, institutional investors and real estate investment trusts (REITs) are drawn to residential and commercial developments in major cities. Western European investors traditionally favour Mediterranean coastal regions; while Middle Eastern, Russian and Iranian investors exhibit broader geographical preferences. The citizenship by investment programme, offering Turkish citizenship for real estate investments exceeding $400,000, continues to attract a global pool of investors.

The market is a tapestry of diverse sectors. The construction sector, with its residential and commercial developments, leads the way. Coastal regions are dominated by tourism investments, while industrial properties in organised zones are a magnet for significant institutional investment. This diversity offers a wide range of investment opportunities.

Investors must navigate various restrictions. Foreign individuals are limited to 30 hectares nationwide, with foreign ownership capped at 10% per district. Military zones and strategic areas are off-limits, while all investors face specific regulations regarding agricultural land and protected areas.

Real estate investments in Türkiye are primarily structured through:

• direct ownership;
• REITs;
• joint ventures; and
• special purpose vehicles (SPVs).

REITs offer liquidity through public trading and tax advantages, despite their regulatory complexity. Direct ownership affords complete control but carries personal liability. Joint ventures and SPVs are particularly favoured for large-scale commercial projects, offering structural flexibility and efficient capital deployment, although they involve higher setup and maintenance costs.

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Land use in Türkiye is primarily regulated through a hierarchical system of zoning plans. The Zoning Law (3194) establishes the main legal framework, which governs:

• development rights; and
• land use restrictions.

Development is controlled through master plans and implementation plans, which determine specific land use designations such as residential, commercial, industrial and agricultural areas. These designations influence:

• building density;
• height restrictions; and
• setback requirements.

Municipalities have primary authority over local planning and implementation, including issuing construction permits and occupancy licences. Development rights are subject to:

• zoning regulations;
• building codes; and
• environmental requirements.

Special regulations apply to areas designated for protection, including:

• cultural heritage sites;
• natural preservation zones; and
• coastal regions.

The Ministry of Environment, Urbanisation and Climate Change maintains oversight authority and sets comprehensive national policy frameworks, ensuring the thoroughness and inclusivity of the regulations.

Planning permission in Türkiye follows a multi-stage process under the Zoning Law (3194). Initially, an architectural project must be prepared by licensed architects and approved by the relevant chamber of architects. The project must comply with:

• the zoning plan;
• building codes; and
• technical specifications.

Supporting documentation includes:

• structural, mechanical and electrical projects; and
• soil studies.

Applications are submitted to the relevant municipality, which reviews compliance with zoning regulations and technical requirements. The process typically takes two to three months for standard projects, although complex developments may take longer. Costs include:

• project preparation fees;
• chamber approvals;
• municipal permit fees (calculated based on the construction area); and
• various technical review charges.

Additional permits may be required for special zones or protected areas, which can extend the timeline and increase costs.

Yes, planning decisions in Türkiye can be challenged through the administrative courts. For zoning plans, interested parties must first file an objection within 30 days of the plan’s public announcement. If this objection is rejected or not addressed within 15 days, parties can file a lawsuit within 60 days before the administrative court where the issuing authority is located.

For construction permits, appeals can be filed directly with the administrative courts within 60 days of notification. Objections must be based on:

• procedural irregularities;
• non-compliance with zoning regulations; or
• violation of property rights.

All planning decisions can be challenged through these legal channels and the courts may grant a stay of execution pending their review.

In Türkiye, failure to comply with planning regulations or construction permits has significant legal consequences under the Zoning Law (3194). Construction without a permit or in violation of permit conditions results in stop-work orders and demolition notices. The municipality can:

• impose administrative fines;
• order the restoration of the property to its previous state; and
• demolish unauthorised constructions at the owner’s expense.

For buildings constructed without permits or contrary to planning conditions:

• utility services may be denied;
• occupancy permits will not be issued; and
• real estate transactions involving such properties may be restricted.

Criminal penalties may also apply in certain cases, particularly where construction:

• violates specific protection zones; or
• poses safety risks.

Expropriation in Türkiye is regulated under the Expropriation Law (2942):

• Public authorities can expropriate private property for public interest through payment of fair compensation determined by valuation committees and courts; and
• Urgent expropriation is possible under specific circumstances defined by law.

Property owners can challenge the expropriation decision and the compensation amount through administrative courts.

Public authorities must first attempt to acquire the property through negotiation with the owner. If unsuccessful, they can proceed with compulsory acquisition through the courts. The law sets out specific procedures for determining and paying compensation, with property owners retaining the right to claim additional compensation within legal timeframes.

Additionally, Article 18 of the Zoning Law (3194) empowers municipalities to readjust land within zoning boundaries without seeking owner consent. Under this provision, municipalities can combine and redistribute plots, deducting up to 45% of the property area without compensation for public services such as:

• roads;
• squares;
• parks;
• educational facilities;
• healthcare facilities;
• religious facilities; and
• other public amenities.

This land readjustment mechanism is distinct from expropriation as it does not require compensation within the statutory limit.

Under Turkish criminal law, courts can order the confiscation of real estate for properties that constitute criminal proceeds or that have been used in criminal activities, subject to:

• the Criminal Law (5237); and
• the Anti-money Laundering Law (5549).

This measure requires a court order and provides legal remedies for affected parties.

Environmental regulations affecting real estate in Türkiye are primarily governed by the Environmental Law (2872) and related regulations. Under current regulations:

• development projects require environmental impact assessment (EIA) reports; and
• buildings must comply with:
• • the Energy Efficiency Law (5627); and
  • building energy performance standards.

The Zero Waste Regulation imposes recycling requirements on larger properties.

Protected areas and cultural heritage sites are regulated under specific preservation laws, with industrial properties subject to additional environmental permits under the Environmental Law.

Non-compliance may result in:

• administrative fines;
• construction delays; or
• permit cancellations.

Liability for environmental contamination in Türkiye operates under the ‘polluter pays’ principle established in the Environmental Law (2872). Property owners, operators and developers can be held jointly and severally liable for environmental damage, regardless of fault. This extends to successor liability, meaning that new owners may be responsible for historical contamination.

Clean-up obligations are typically enforced through administrative orders requiring contamination assessment and remediation plans. The authorities can:

• impose fines;
• suspend operations; or
• require immediate cleaning measures.

If the responsible parties fail to act, authorities may conduct the clean-up and recover costs from the liable parties. Insurance coverage for environmental risks is increasingly common, particularly in industrial and commercial properties.

Environmental considerations in Turkish real estate transactions vary by property type and scale:

• EIA reports are mandatory for:
• • large-scale developments;
  • industrial facilities; and
  • projects in sensitive areas.
• Standard commercial or residential properties primarily require energy performance certificates (EPCs).
• Properties in special environmental zones, coastal regions and forest-adjacent locations need additional permits.

Critical due diligence includes reviewing:

• existing environmental permits;
• compliance history; and
• zoning status regarding protected areas.

Transaction documents should address environmental liability allocation and compliance obligations. Post-closing requirements involve maintaining relevant permits and implementing waste management systems, with environmental insurance advisable for industrial properties.

Türkiye promotes energy efficiency through the Energy Efficiency Law (5627). The law:

• requires EPCs for new constructions; and
• establishes a framework for energy efficiency initiatives through the Ministry of Energy and Natural Resources.

The ministry also administers certain support mechanisms and incentives for projects that reduce energy consumption in buildings.

Environmental certifications in Türkiye fall into three categories:

Mandatory Certifications:

1. Energy Performance Certificate (EPC): This is required under the Energy Efficiency Law (5627) for all buildings. It assesses energy consumption and efficiency ratings.
2. Environmental Impact Assessment (EIA) Certificate: This is required under Environmental Law (2872) for large-scale developments and industrial facilities to assess and mitigate environmental impacts.
3. Environmental Permit and License: These are required for industrial operations under the Environmental Permits and Licenses Regulation to manage environmental effects during operation.

National Certification:

YeS-TR Certificate: Developed by the Ministry of Environment, Urbanization, and Climate Change, this national sustainability certification system evaluates various building types (residential, commercial, educational, and healthcare) based on energy efficiency, water usage, waste management, and environmental impact criteria. It is available for both new and existing buildings.

International Certifications:

1. LEED, BREEAM, and EDGE: Widely recognized certifications for energy efficiency and sustainability, commonly used in commercial and residential developments.
2. WELL Building Standard: This standard focuses on the health and well-being of building occupants and is increasingly popular in both residential and commercial sectors.

While some certifications are legally required, others are increasingly important for attracting investors and tenants, especially in premium developments.

The Turkish real estate market has experienced significant dynamism in recent years, driven by robust domestic demand and rising foreign investment. One of the most notable trends has been a surge in foreign buyers, particularly from Arab Gulf countries, Russia and Iran. This has been spurred partly by government initiatives such as the citizenship by investment programme, which grants Turkish citizenship to foreign buyers of property valued at over $400,000.

On the supply side, the real estate sector has witnessed a construction boom, with developers rushing to build new residential and commercial projects, often on the outskirts of major cities such as Istanbul. However, emerging concerns about potential oversupply in specific market segments could lead to price stagnation or even decline in those areas. The market is also becoming more bifurcated, with luxury high-end developments catering to affluent buyers coexisting alongside more affordable mass housing projects.

Looking ahead, the Turkish real estate market is expected to remain active, although the pace of growth may moderate to some degree. Türkiye’s strategic location, young and growing population and economic dynamism are likely to sustain investor interest in the medium term, although the market may become more selective and discerning.

The Turkish real estate market requires careful planning and thorough due diligence. Land Registry records, while providing strong protection, should be supplemented with comprehensive checks of:

• municipal regulations;
• construction permits; and
• zoning status.

This is particularly crucial given the complex regulatory environment and frequent legislative changes.

For development projects, investors should carefully evaluate:

• zoning regulations;
• construction permits; and
• potential restrictions.

The complexity of obtaining necessary permits and the increasing focus on earthquake safety regulations make preliminary legal assessment essential. Urban transformation areas may be subject to additional regulations and specific permit requirements.

Due to the dynamic regulatory environment and the significance of proper documentation, investors should:

• allocate sufficient time for due diligence; and
• seek current legal advice for specific transactions.