The Turkish Government had announced a new amendment about real estate purchases on January 24, 2022. The new regulation appertains to foreign property buyers and states that the sales amount of the property must be converted into Turkish Lira through The Central Bank of the Republic of Turkey.
How Does the Currency Exchange Process Proceed?
The Land Registry Office will request a Foreign Exchange Document (Döviz Alım Belgesi) to pursue the transactions for property purchasing. The buyer should convert the sales amount of foreign currency into the Turkish Lira before applying for the title deed transfer. The document must be obtained before the sale transaction.
The conversion of the whole sales amount should be made through a Turkish Bank. The buyer will obtain a Foreign Exchange Document after the conversion. This document will contain details of the currency conversion such as;
• Name and surname of the person whose behalf the transactions were made,
• Passport number or foreign ID Number,
• USD equivalent of the foreign currency,
• The statement of “This transaction is pursued within the scope of Article 13 of the Circular on Capital Movements”.
The payment amount written on the Foreign Exchange Document will be taken as the sales price of the property by the Lang Registry Office.
The procedures must be pursued by the buyer, seller, or a representative on the buyer’s or seller’s behalf with a power of attorney.
The buyer can send the whole payment to the seller’s account. The seller will be able to make the exchange through a Turkish bank and get the Foreign Exchange Document.
One of the most critical points is that the currency transition should be made through a Turkish bank, not by an exchange office or other sources. Other ways won’t be accepted.
The other important fact is that the Central Bank of the Republic of Turkey only accepts certain currencies for conversion. Payments must be made as in USD (US Dollar), Euro, or Pound Sterling to the bank for currency exchange.
At first, monetary units other than previously mentioned currencies must be converted into USD, Euro, or Pound through the bank. The transition of foreign currency to the Turkish Lira will be the second step.
If the payment was made before the effective date, the Foreign Exchange Document won’t be needed. But a bank-approved receipt must be submitted to the Land Registry Office because only the payments that were made through a bank will be accepted. Other payment methods, such as payment in person, won’t be accepted.
Currency Exchange Is Also Mandatory While Obtaining Turkish Citizenship by Real Estate Investment
No matter what is the purpose of the purchase, the currency exchange is mandatory and the Foreign Exchange Document is necessary for each real estate purchase made by a foreigner.
In addition, the Directorate of Land Registry and Cadastre request the bank-approved receipt stating the pre-determined sales amount for Turkish citizenship application has been sent to the account of the seller.
The bank-approved receipt of the money transfer from the buyer to the seller must be submitted with the Foreign Exchange Document before the sale transaction. It can be submitted before the commitment process or the issuance of the conformity document at the latest.
Bayram Tekce, The Chairman of Tekce Overseas states that the new regulation about the currency exchange won’t negatively affect the property prices and current sales process.
Buying real estate in Turkey is still an easy and safe experience with the trusted guidance of real estate specialists. The professional team of Istanbul Homes ® is happy to guide you through your property purchasing journey.
The Land Registry and Cadastre prepared a guidebook for the currency exchange process. You can take a look at the legal notice about currency exchange from here.