8 Nisan 2011 Cuma

Red tape hits Turkish property sales to foreigners

The Aegean resort town of Didim hosts many foreigners aggrieved by long procedures during property sales, according to sector experts. DHA photo

The Aegean resort town of Didim hosts many foreigners aggrieved by long procedures during property sales, according to sector experts. DHA photo
Despite a recent rise in property sales to foreign nationals, major construction firms, real estate companies and retail associations are complaining about tedious legal procedures while selling real estate to foreigners in Turkey.

“The current lengthy procedures should be eased by the authorities,” said Emre Narin, the chairman of Martı Real Estate Investment Trust, or REIT, speaking to the Hürriyet Daily News & Economic Review.

“There are many foreign nationals who are interested in buying property from us. Demand is especially high among Brits. Still, when it comes to the current tedious procedures, many foreign customers step back and change their mind, as these procedures can take many months to complete,” he said.

Kürşat Tuncel, vice president of sales and marketing at Ağaoğlu İnşaat, a leading Turkish construction company, also said getting permission from authorities to sell property to foreign nationals takes a long time. “For the sale of every unit, many signatures are required for the authorities,” he told the Daily News. “This does not correlate with Turkey’s aim of attracting more foreign investment.”

Selling property to foreign nationals in accordance with the reciprocity principle is not acceptable either, according to Tuncel.

In diplomacy, the principle of reciprocity states that favors, benefits or penalties that are granted by one state to the citizens or legal entities of another should be returned in kind.

According to Tuncel, this principle blocks the flow of foreign investment in real estate with “no sensible explanation.” Many foreigners are “just giving up” and deciding not to buy property in Turkey due to red tape, he said.

Tuncel also noted exaggerated concerns among some Turks related to property sales to foreign nationals. “Turkish citizens can easily buy property in the United States, the United Kingdom and in Germany, for example,” he said. “Any concern of ‘foreigners invading our country’ is totally baseless.”

National security concerns

Indeed, an article on property sales to foreign nationals is directly related to national security concerns and is among the biggest reasons why a transaction sometimes takes months to complete. Act 2565 states that a foreign national must apply, in written form, to the Turkish General Staff or any department appointed by the General Staff in order to make sure a piece of land or property is not located on a military zone.

Lorrain Toms and Fred Toms, a British couple living in the Aegean resort town of Didim, which is home to over 4,000 foreign residents, said some people with bad intentions are using the long process of military permission in order to “rip off foreigners.”

“A builder asked for 70,000 pounds from us while waiting for authorization from the military, which took nearly six months. This amount we paid in order to own our house is gone, and so is the house,” Lorrain Toms told the Daily News. “We wouldn’t have had such a sad experience if permission from the military was not necessary. We could have bought the house and got the deed right away.”

Didim hosts many foreigners aggrieved by long procedures during property sales, said Osman Coşkun, chairman of the Didim Real Estate Dealers Association. Foreigners are buying properties through notary public agreements with third parties while waiting for military permission,” he said. “But most of them do not know that without the final deed, notary agreements do not mean much in owning the property legally.”
According to official data, between 2002 and 2010, nearly 85,676 foreign nationals, mostly from the United Kingdom, Germany, Ireland and Denmark, bought property in Turkey. Since 2005, total sales to foreign nationals reached $14.4 billion. Total sales in the first half of this year reached $1.4 billion, compared with $780 million in the same period of 2009.

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