Istanbul Real Estate for Foreign Investors: Legal Guide and Investment Tips

Istanbul Real Estate for Foreign Investors: Legal Guide and Investment Tips

Investing in a new country is a bold move that needs planning and researching.

Istanbul, Turkey is an attractive location among investors for its strategic location, strong economy, and investment opportunities.

To make your life easier we created this guide to assist you in knowing how to invest in Istanbul.

1. Understanding the Legal Framework for Foreign Property Ownership in Turkey

Like any legal process, you should know the legal paper required and the type of contracts used.

• Legal Papers Required:
  • Passport
  • Signed Sale Agreement contract. 
  • Clear criminal record from your country.
  • Receipt of transferred funds to the Central Bank in Istanbul
  • Confirmation that the property value was paid and transferred to the seller's account.
  • Turkish Tax Number from a local Tax office in Istanbul

Ownership type:

• Almost all properties in Turkey are Freehold, meaning the owner owns both the property and the land built on it.
• Only a few properties located on the coastline of Bosphorus are under leasehold ownership. 

2. Countries Allowed to Own Property in Turkey and Ownership Limits

Citizens from all countries can buy property in Turkey, except:

• Syria
• Cuba
•  Armenia
• North Korea

3. Step-by-Step Guide to Purchasing Property in Istanbul as a Foreigner

• Research the neighborhoods and districts of Istanbul
• Study the Real Estate Market of Istanbul
• Set a Budget and goal for purchasing a property.
• Check properties on online platforms such as Emlakjet and Sahibinden to get an idea about the prices and property types.
• Contact a reputable Real Estate Agency and inform them of your requirements and needs.
• Receive offers from the Real Estate Agent, discuss the options, and give them feedback.
•  Make a shortlist of properties to consider and request more details about them.
• If you can visit Istanbul, then you should come and examine the conditions of the properties. If not, then you can online site visit the properties via video call.
• Ask to see the Tapu aka Tile Deed of the properties or Notary contract.
• Pro-tip: If you are buying properties for the Turkish Citizenship or Residency program, you need to check the Appraisal report to make sure that the property is eligible.
• Negotiate the price and closing fees with the construction company via a Real Estate Agent.
• Pay a deposit fee to reserve the property
• Sign the sale agreement contract.
• Get the Turkish Tax Number from a local Tax office in Istanbul
• Open a Turkish Bank account to transfer the payment to the construction company
• Pay the fees and Compulsory Earthquake Insurance (DASK)
• Receive the Tapu (Title Deed)

4. The Importance of Legal Due Diligence When Buying Property in Istanbul

• Verifying ownership titles and ensuring no encumbrances or unpaid debts on the property.
• Consulting a legal professional for contract review.
• Ensuring compliance with Turkish property laws and regulations.

5. Top Investment Tips for Foreign Buyers in Istanbul’s Real Estate Market

• For investment, the best option is a one-bedroom apartment. Why? Due to the huge demand for rental housing in Istanbul by students and Expats.
• Buy properties located close to universities, schools, and attractions.
• Avoid buying villas if investing is your goal. Villas have a low-profit margin.
• Offices are good investment, but you need to understand that reselling an office isn’t an easy task. However, renting out an office will generate high ROI.
• For long-term investment, buy at locations undergoing urban development and reconstruction such as the Kagithane area. 
• Always buy in complex buildings with services and amenities. Favorite among tenants and investors.
• To maximize your profit buy properties within walking distance from metro and bus stations.

Want to maximize your ROI in Istanbul? Contact us for an in-depth market analysis and exclusive investment opportunities.

6. Common Mistakes Foreign Investors Should Avoid When Buying Property in Istanbul

• Getting information from Social Media, yes social media platforms are good resources for information. But you need to always double-check the information.
• Not knowing or understanding the market of Istanbul, every city has its own atmosphere and culture. You need to research the market and its demand before jumping in.
• Confusing yourself by talking to too many Real Estate Agencies, too much information will cloud your judgment.
• Thinking that buying old buildings will save you money. Old buildings aren’t attractive options for tenants or investors. Hard to resell and rent out.
• Not checking the Tapu before buying mainly second-hand properties.

7. Essential Tax and Financial Obligations for Foreign Property Owners in Turkey

• Title Deed (Tapu) Transfer Tax: Usually it can range between  4.2 to 10% depending on the property value and type.
• DASK Earthquake Insurance: Mandatory for all property purchases, DASK covers structural damage from earthquakes.
• Translation fee: All legal documents should be translated into the Turkish language.
• Notary Fees: All documents and contracts should be notarized before submitting a copy of it. 
• Pro-tip: If you don’t hold a Residency permit in Turkey, you will be exempted from paying taxes. Ask your Real Estate Agent about the details.

9. Choosing the Right Real Estate Agency for Foreign Investors in Istanbul

We recommend hiring a Real Estate Agency that matches this criteria:

• Speaks English or your native language, communication is key.
• They advise and consult you.
• Don’t push you to purchase any properties. Especially if the timing is wrong.
• They don’t hide any information (Hidden Fees, negative details about the project, etc)
• They provide after-sales services, so it’s essential to hire an agency with after-sales services. Particularly if you aren’t going to relocate to Turkey.
• They have a good reputation and are reviewed by real clients.
• They need to be registered and have a valid license in Turkey.
• Visit their office and observe their behavior. 

10. Ensuring Secure Property Investments in Istanbul: Contracts and Legal Protections

• Make sure that all contracts are reviewed by a licensed lawyer. 
• Verify that the title deed is free of liens or mistakes before signing the sale agreement.
• Request details about the materials used in the construction of the building and finishing of the properties.
• Don’t sign any paper or contract without reading it in English or your native language.
• Only sign legal documents at the notary office with a translator.

Browse our listings of Istanbul properties to find your next investment in Turkey.