In January 2022, the Turkish government introduced a new regulation requiring all foreign nationals to obtain a Foreign Exchange Certificate (FEC), in order to buy a property in Turkey. The document is required from all foreign buyers, regardless of their nationality or citizenship status, and covers all types of real estate purchases, including apartments, houses, villas, and commercial properties. The purpose of the FEC is to help control the flow of foreign currency into Turkey and to prevent money laundering.
Where is the Foreign Exchange Certificate issued to buy a property in Turkey?
The FEC is proof that a foreign buyer has exchanged the stated amount of foreign currency into Turkish Lira necessary for the purchase of the property. The document can only be obtained from an official bank in Turkey. It is important to note that exchange of foreign currency made through exchange offices or individuals in Turkey, or in banks outside of Turkey, is not accepted.
What information is included in a Foreign Exchange Certificate?
A valid FEC will include the following:
- Name and surname of the foreign national who made the foreign exchange transaction.
- Passport number or identification number of the foreign national who exchanged the currency
- USD equivalent of the payment made for the foreign currency exchange, and the amount in Turkish Lira
The FEC also includes a statement declaring that the transaction was carried out within the scope of “Article 13 of the Circular on Capital Movements”. This is the article of the legislation that regulates the payment obligations for real estate purchases by foreign nationals.
Where is the Foreign Exchange Certificate used?
The Foreign Exchange Certificate is required by the Land Registry Office (Tapu Kadastro) so that a property can be registered in a foreign buyer’s name. The FEC is a strict legal requirement and is not subject to negotiation.
What amount must be exchanged for the Foreign Exchange Certificate?
The Circular on Capital Movements specifies that the amount of foreign currency that must be exchanged should be equal to the entire purchase price of the property. It should also be noted that the agreed purchase price must not be lower than the estimate for the minimum value of the property, which is provided by the municipality to which the property belongs, and is among the documents required by the Land Registry Office.
If you have any questions about process of buying a property in Turkey, please do not hesitate to contact us. UT Legal, through its offices in London and Istanbul, can handle all the procedures for you.