New Foreign Exchange Document Regulation for Foreigners Buying Real Estate in Turkey

The Turkish Government had recently issued a series of regulations to protect the Turkish Lira. The new regulations which aim to streamline foreign capital movements into the country also closely interest the foreigners who want to buy real estate or property in Turkey. 

According to the new legislation effective from 24.01.2022, every foreign citizen who wants to buy a property in Turkey now must exchange the exact sales price of the property into Turkish Lira (₺) with an authorized bank. After the currency exchange, the buyer will be given a Foreign Exchange Document (Tr. Döviz Alım Belgesi) as the proof of transaction. This document must be included among the title deed transfer documents which the Land Registry Office asks for. Otherwise, the title deed transfer (TAPU) from the seller to the buyer cannot happen.

In practice, the new regulation does not change any fundamental aspects of buying real estate in Turkey. However, it adds an additional step that must be followed unmistakenly. That is why we need to take a closer look at the document called the Foreign Exchange Document. The document’s purpose can simply be summarized in one sentence: Proof of exchanging the exact sales amount of a property with an authorized Turkish bank into Turkish Lira.

It is very important to note that the conversion of the foreign currency must be made by the authorized Turkish banks. Currency exchanges made using any other alternative ways such as exchange offices will not be accepted.

Currently, only 3 currencies are accepted for converting into Turkish Lira: USD ($), EUR (€), GBP (£). No other currency will be accepted for exchange into Turkish Liras other than the 3 listed above. This means, if you have any other currencies, your first step must be exchanging that currency into USD, EUR, or GBP. Then you will be able to exchange it for Turkish Lira through the authorized bank.

 

The Foreign Exchange Document must include the information below in order to be accepted by the Land Registry Office:

a)       Name/Surname of the person the currency is exchanged for

b)      Passport Number of said person

c)       USD equivalent of the foreign currency

d)      Written & signed statement on the document: “This transaction is carried   out within the scope of "Article 13 of the Circular on Capital Movements.”

 

Let’s answer some of the frequently asked questions on the subject matter:

1-      Q: Will this regulation has a big effect on my property purchase in Turkey?

A: No, it will not make a big impact on your property or real estate purchases. There will just be an additional step to follow with the regulation.

2-      Q: I have my savings in a different currency other than US Dollar, Euro, British Pound. Does this mean I cannot buy any property in Turkey?

A: You can of course still buy a property in Turkey. However, you need to exchange your savings into these 3 currencies first.

3-      Q: I want to buy a property in Turkey. Do I have to make the currency exchange as a buyer myself?

A: No. The representatives or real estate agencies that you have given the power of attorney to can make the currency exchange and acquire the document for you.

4-      Q: Can I exchange the foreign currency into the Turkish Lira using an exchange office?

A: No. The exchange must be made through a bank authorized by the Central Bank of the Republic of Turkey.

5-      Q: I want to buy a property priced higher than 250.000$ and acquire a Turkish Citizenship by Investment. Do I also have to acquire the Foreign Exchange Document?

A: Yes. Every foreign citizen who wants to buy a property in Turkey has to acquire the document regardless of the price and purpose of the acquisition.

 

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