How scheming with the property value might cause a loss of Turkey citizenship

In early 2022, a year after obtaining Turkey citizenship, Dominic and Lauren divorced and split their assets.

Dominic agreed to reimburse half the cost of the Turkish villa to his ex‑wife and paid Lauren $200,000, which was half the contract price. Lauren went to court in Turkey. She wanted to prove that the villa cost $600,000. Then, she could get $100,000 more.

The Turkish court recognised the deal as invalid and the developer as unfair. As a result, Dominic and Lauren lost ownership of the villa and were left without real estate in Turkey. That is, they could not confirm the fulfilment of the citizenship program conditions: to own real estate for three years after its purchase.

Dominic and Lauren needed to buy a new property urgently to keep Turkey citizenship.

Lauren,

Owner of a beauty salon in Johannesburg and Dominic's ex-wife

I didn’t think it would turn out like that. I just wanted to get half of the money we had invested in buying a villa. After the trial, we were left without real estate and could lose Turkey citizenship too.

My ex-husband’ colleague advised us to contact Immigrant Invest. We came for a consultation in February 2022 and became the owners of Turkish real estate again just two weeks later.

Immigrant Invest lawyers assessed Dominic and Lauren’s situation. To retain Turkey citizenship, the ex‑spouses had to buy new real estate as soon as possible.

The deal had to be legal for Dominic and Lauren to confirm that they complied with the investment conditions of the citizenship program.

Dominic and Lauren were already divorced when they contacted Immigrant Invest. Accordingly, each was considered an independent investor and had to own different properties worth $250,000 or more.

Immigrant Invest cooperates only with reliable developers. Therefore, there is no risk of coming across scammers who speculate on real estate prices.

Immigrant Invest real estate specialists made a selection of properties for the investors. Dominic chose an apartment in Istanbul, while Lauren chose an apartment in Bodrum.

Dominic and Lauren didn’t know a vital nuance when they decided to get Turkey citizenship by investing in real estate.

The citizenship application is accompanied by a real estate purchase and sale agreement and a licensed appraiser’s report. The property value in the contract and the value of the transaction must match the amount in the report.

If a developer asks to pay extra for real estate over the amount specified in the contract or appraiser’s report, it is nothing more than fraud with the property value. When the fraud is discovered, the transaction will be invalidated. The investor and his family members may be deprived of citizenship.

A real estate purchase usually takes place in five stages:

1. An investor chooses a property.

2. A presale contract is concluded, and the investor makes an advance payment.

3. The investor gets a tax number in Turkey.

4. The investor concludes the main sell and purchase contract and pays the remaining property value.

5. The investor registers ownership in the land registry.

Vladlena Baranova,

Head of Legal & AML Compliance Department, CAMS, IMCM

A Turkish tax number is required to register a property and open a bank account. Since Dominic and Lauren have already become Turkish citizens, they had tax numbers. We had to prepare the documents, and they could buy real estate immediately.

The investors chose two properties worth $250,000 each. We checked whether the real estate title was clean and the sellers trustworthy. At that time, the estimated value corresponded to the contract price.

Selection of properties. Turkey does not allow investors to purchase properties that other investors have already used to obtain citizenship. The country also imposes restrictions on the real estate purchase for citizens of some countries. For example, foreigners can not buy housing near military installations or the Black Sea.

Signing a presale contract. As soon as the investor has decided on the property, they conclude a presale agreement with the seller and make an advance payment of $1,000 to $10,000. The contract prescribes the transaction terms: price, payment terms, and who bears the overhead costs.

The buyer and the seller enter into the main agreement. The investor transfers the money to the seller’s account. The payment is made in US dollars or the equivalent amount in a foreign currency. It is the condition of the citizenship program.

Registration of real estate. The new owner registers the property in the land cadastre and receives a certificate — TAPU. The property buyer also gets an eligibility certificate and an appraisal report. The documents confirm that the property complies with the citizenship program conditions.

Companies licensed by the Banking Regulation and Supervision Authority (BDDK) and the Capital Markets Board (SPK) of Turkey carry out real estate appraisals for the citizenship program.

Two weeks to buy a property in Turkey

1

February 8th, 2022

The investors signed an agreement with Immigrant Invest

2

+ 2 weeks

Immigrant Invest lawyers prepared documents for the real estate purchase

3

+ 1 day

The investors transferred money to the property sellers

1

February 8th, 2022

The investors signed an agreement with Immigrant Invest

2

+ 2 weeks

Immigrant Invest lawyers prepared documents for the real estate purchase

3

+ 1 day

The investors transferred money to the property sellers

The buyer pays a property transfer tax upon purchase — 4% of the cadastral property value. By law, the buyer and the seller pay the tax in equal parts. However, according to the established practice, the seller compensates the buyer for the share.

If the property is still under construction, the investor pays for the contract notarisation — 1% of the transaction amount. In this case, a presale contract is concluded first and then certified by a notary. The main contract is concluded upon completion of construction.

Related costs when buying Turkish real estate include:

• up to 4% — a property transfer tax;

• 1% — the notarisation of the contract if the property is under construction;

• 3% — a realtor’s commission if an agency was involved in the transaction.

$544,220 — Dominic and Lauren’s expenses on real estate

• $523,000 — real estate purchase

• $20,920 — transfer tax of 4%

• $300 — real estate appraisal

Dominic and Lauren have retained Turkey citizenship despite the divorce. They can come to Turkey anytime, even if the country’s borders are closed to tourists.

The investors can travel to 111 countries without visas with their Turkish passports. The list of visa-free destinations includes Japan, Hong Kong, and Singapore. Turkish citizens have the right to get 10‑year B‑1/B‑2 tourist visas for trips to the USA.

The investors can also get an E‑2 business visa to the United States with a validity period of 5 years. To obtain a visa, an applicant buys or opens a company in the USA, while he doesn’t have to create jobs. The E‑2 visa allows holders and their families to live and work in the country.

Thanks to their second citizenship, Dominic and Lauren retained access to European banking services and could keep savings in hard currency.

Immigrant Invest is a licensed agent for government programs in the European Union and the Caribbean.