Legal Status of Real Estate Acquired Abroad by Turkish Citizens
🔹 Introduction
Globalization, technological advancements, and international investment mobility are increasing the acquisition of real estate abroad by Turkish citizens every year. The number of Turkish citizens investing in real estate, particularly in Europe, the Middle East, the USA, and Balkan countries, is rapidly increasing. This situation necessitates an examination of the legal status of real estate acquired abroad by Turkish citizens and its implications under Turkish law
This article will examine the acquisition of real estate in foreign countries by Turkish citizens within the context of property rights, foreign law, tax obligations, inheritance, title registration, and private international law
🔹 I. Legal Framework for Acquiring Real Estate Abroad
1. The Scope of Property Rights in Turkish Law
According to Article 35 of the Constitution, everyone has the right to property and inheritance. However, there are debates in practice regarding whether the right to property extends to real estate located abroad . In Turkish law, the right to property is limited by the principle of territoriality ; that is, the registration and protection of property are subject to the law of the country where the real estate is located (lex rei sitae principle).
2. The Principle of Lex Rei Sitae (Law of the Place Where the Immovable Property is Located)
Article 20 of the Law on Private International Law and Procedural Law (MÖHUK) , real rights over immovable property are subject to the law of the place where the immovable property is located.
Therefore, the legal nature of immovable properties acquired by Turkish citizens in countries such as Germany, France, Qatar, or the USA is determined by the land registry and property regimes of those countries.
3. Application of Foreign Law
In Turkish courts, when a lawsuit is filed regarding immovable property located abroad, foreign law will apply pursuant to Article 20 of the Private International Law Act. However, if there is a clear violation of Turkish public order (for example, restrictions similar to slavery), the Turkish court may choose not to apply foreign law based on the principle of intervention in public order
🔹 II. Conditions for Acquiring Real Estate Abroad
1. Real Estate Acquisition Permit
The acquisition of real estate in foreign countries is regulated by each country's own property and foreign investment legislation. Turkish citizens may also be subject to certain restrictions that differ from those of the foreign citizens.
For example:
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the US, different rules apply at the state level, but foreigners are generally granted freedom to own property.
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Greece and Cyprus , Turkish citizens are required to obtain special permission to acquire property.
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Qatar and the UAE , foreigners are granted property rights in certain areas designated as "freehold."
2. Consular Notification and Turkish Tax Legislation
Turkish citizens are not obligated to report the purchase of real estate abroad through Turkish Consulates ; however, this is important for tax purposes and asset declaration . The Turkish Revenue Administration has encouraged the declaration of foreign properties under the Asset Amnesty regulations
🔹 III. Evaluation of Real Estate Acquired Abroad from the Perspective of Turkish Law
1. Is registration in the Turkish Land Registry possible?
for Turkish citizens to register their properties abroad in the Turkish land registry.
This is because the Turkish Land Registry Law (Articles 1 and 2) applies only to properties located within the borders of the Republic of Turkey.
Therefore, the registration of foreign properties can only in the land registry system of that country .
2. Legal Effects in Türkiye
Real estate acquired abroad evidentiary value , but it does not directly create a real right.
For example, a house owned by a Turkish citizen in Germany as an asset element .
3. Evaluation in Terms of Property Regime
According to Articles 202 and subsequent articles of the Turkish Civil Code, the community property regime is valid within the marriage. In this context, if one spouse acquires immovable property abroad, this property is also considered "acquired property." However, the law applicable in liquidation proceedings will be the common national law or the law of the habitual residence , in accordance with Article 15 of the Private International Law Act .
🔹 IV. Evaluation from the Perspective of Inheritance Law
1. Opening of the Inheritance and Applicable Law
According to Article 20/2 of the Turkish Code of Private International Law, inheritance provisions concerning immovable property are also subject to the law of the place where the immovable property is located.
Therefore, immovable property owned by a Turkish citizen in France will be liquidated according to French inheritance law.
However, provisions relating to the estate in Turkey will be applied according to Turkish law.
2. Inheritance Procedures in Foreign Countries
Real estate owned abroad by a Turkish citizen is subject to inheritance and transfer tax in that country upon death. Turkish citizen heirs may have a declaration obligation to both the relevant country's authorities and the Revenue Administration in Turkey
3. Impact on Inheritance Cases in Türkiye
Turkish courts cannot directly dispose of real estate located in foreign countries; however, the value of such property may be taken into account when determining inheritance shares . The 2nd Civil Chamber of the Supreme Court of Appeals has established precedents stating that "real estate located abroad should be considered in inheritance distribution."
🔹 V. Tax and Financial Obligations
1. Double Taxation Avoidance Agreements
Double Taxation Avoidance Agreements (DTAAs) that Turkey has signed with many countries prevent the taxation of foreign real estate income twice, both in that country and in Turkey. For example, under agreements with Germany, the Netherlands, the United Kingdom, France, Qatar, and the United States, rental income can be taxed only in the country where the property is located.
2. Declaration and Notification Obligation
According to Article 3 of the Turkish Income Tax Law, fully taxable Turkish citizens are required to declare their real estate income earned abroad in Turkey.
However, if tax has been paid in the relevant country, this amount is offset in Turkey.
3. Capital Gains
When real estate is sold abroad, a capital gains tax may arise.
According to Turkish tax legislation, this gain can be taxed if the property is sold within 5 years .
🔹 VI. Public Order and Property Restrictions
1. Public Order Intervention
According to Article 5 of the Turkish Code of Private International Law, foreign law shall not be applied if its application is clearly contrary to Turkish public order.
For example, if the acquisition of immovable property by a Turkish citizen in a foreign country is prohibited only for certain religious or ethnic groups, a Turkish court may consider this restriction to be contrary to public order .
2. Foreign State Interventions and Expropriation
In some countries, foreign property owners are at risk of having their properties expropriated or confiscated . In such cases, Turkish citizens can resort to international arbitration (ICSID, etc.) under bilateral investment agreements (BITs) with the relevant state
🔹 VII. Opinions of the Supreme Court and Practice
The Supreme Court's rulings have adopted the following principles in disputes concerning Turkish citizens' real estate abroad:
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Supreme Court 2nd Civil Chamber, Case No. 2017/6823, Decision No. 2018/4519.
"If real estate abroad is acquired within the scope of marriage, it is considered acquired property. However, the registration process is subject to the laws of that country."
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Supreme Court 14th Civil Chamber, Case No. 2019/2345, Decision No. 2020/4876.
"Turkish courts cannot rule on the ownership of real estate located in a foreign country; however, they can award compensation based on the value of such real estate."
These decisions demonstrate that the principle of lex rei sitae is meticulously applied in Turkish jurisprudence as well.
🔹 VIII. Problems Encountered in Practice
1. Document Recognition and Translation
Foreign property deeds an apostille and translated by a sworn translator .
Otherwise, Turkish courts or administrations will not accept these documents as evidence.
2. Conflicts Between Inheritance and Property Regimes
Both inheritance and property regime claims can arise over the same immovable property. In this case, according to the provisions of the Private International Law Act, the law of the country where the immovable property is located will apply first.
3. International Access to Land Registry Information
Turkey is not included in reciprocal land registry information sharing systems with European countries . Therefore, the existence of foreign real estate can often only be determined through tax declarations or consular investigations
🔹 IX. Conclusion and Evaluation
For Turkish citizens, acquiring real estate abroad is currently central to both investment and citizenship strategies. However, since this process subject to the laws of the country where the property is located , it has different legal consequences for each country.
The Turkish legal system, by adopting the principle of lex rei sitae, gives precedence to the law of the country where the immovable property is located.
Therefore:
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Turkish citizens should examine the property and tax regulations of the country where they will purchase real estate
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Asset and income declarations must be made in accordance with the Turkish tax system
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The effects of inheritance and property regimes should be arranged in advance.
The precedents set by the Supreme Court of Turkey are also consistent with international legal principles on this matter. Therefore, every overseas real estate acquisition is not only an economic investment but also requires legal advice
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