Case Studies

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

Lauren and I divorced a year after getting Turkey citizenship. We split our assets in court. During the process, it turned out that the actual price of our Turkish villa did not correspond to the cost stated in the contract.

The court declared the transaction invalid. We lost the property, which meant we could not confirm the fulfilment of investment conditions. As a result, we could lose Turkey citizenship.

We turned to Immigrant Invest for help. Within two weeks, real estate specialists selected properties for us, lawyers completed the paperwork, and we bought new properties. This is how we retained the second Turkey citizenship.

Investor with Turkish citizenship
Dominic, 41
Restaurant owner from Johannesburg
The client’s name and photo have been changed
Loss of Turkish citizenship: how to keep the passport if the real estate transaction was recognised as fictitious

In January 2021, Dominic and Lauren got Turkish passports under the state citizenship program. A Turkish consulting firm helped the couple buy a villa in Bodrum, dealt with paperwork and applied for citizenship on the investor’s behalf. 

However, the villa price under the contract differed from what Dominic had to pay. He bought the villa for $600,000, and the contract value was $400,000. The investor paid $200,000 unofficially in cash to reduce the tax burden. Such an "optimisation" was advised to him by a Turkish developer, who assured him that everything would be in order.

Why spouses could lose 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.

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.

Investor with Turkish citizenship
Lauren, 36
Owner of a beauty salon in Johannesburg and Dominic's ex-wife

How to retain Turkey citizenship if a real estate purchase agreement has been invalidated

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.

Turkey has increased the minimum investment for real estate purchases. After June 12th, 2022, an investor must buy a property worth at least $400,000 to obtain a Turkish passport.

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.

Turkey is one of the best places for entrepreneurship

According to the Global Entrepreneurship Monitor, Turkey is one of the top 50 countries for entrepreneurs. The fastest way for entrepreneurs to obtain Turkey citizenship is by investment

Turkish citizenship loss: Istanbul

Istanbul is one of the ten largest cities in the world. The business centre of the city is the Levent district. Turks call it a symbol of abundance and wealth

Turkish citizenship loss: Bodrum

Bodrum is a popular resort city ​​on the Aegean coast. The beach season in Bodrum starts in May and ends by November. Lauren bought an apartment in the city

How to avoid scammers when buying property

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.

How to purchase a property in Turkey

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.

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.

Evgeniya Morozova Expert Immigrant Invest
Evgeniya Morozova
Head of the Legal Department, lawyer, Candidate of Juridical Sciences, Judicial Counselor of the 3rd Class

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.

Dominic purchased a two-bedroom apartment in Bahcesehir, an exclusive area of ​​Istanbul. The price was $253,000. The residential complex had a fitness centre, swimming pool and sauna. Next to the complex, there was a park with an arboretum, a lake, cafes and restaurants

Lauren chose a three-bedroom apartment in Bodrum. The price was $309,000. The residential complex was located 500 meters from the 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

Expenses on purchasing real estate in Turkey

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
Residence permit and citizenship by investment
$20,920
Transfer tax of 4%
Residence permit and citizenship by investment
$300
Real estate appraisal

Investors’ life with Turkish passports

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 110 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.

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Evgeniya Morozova
Head of the Legal Department
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