What Are The Developments Regarding The Obligation To Transaction With Foreign Exchange İn Real Estate Sales Where Foreign Real Persons Are The Buyers?

With the update made in the Circular on Capital Movements of the Central Bank of the Republic of Turkey, within the scope of the 13th article of the said Circular, foreign currency exchange obligation has been introduced in the sales of real estate where foreign real persons are the buyers. Again, in this regard, the Implementation Instruction on Foreign Exchange Sales to the Central Bank of the Republic of Turkey was put into effect.

What Are The Issues Regarded In Article 13 Of The Circular On Capital Movements Of The Central Bank Of The Republic Of Turkey?

  • Payment obligations of real estate purchased in Turkey by persons who do not have citizenship ties with the Republic of Turkey are fulfilled in foreign currency. This foreign currency is sold to a bank and by the bank to the Central Bank, by stating the reason before the title deed transactions. Payment is made in Turkish lira to those concerned.
  • Those concerned are obliged to submit the foreign exchange purchase document proving that the foreign currency with the sales price has been sold to a bank, to the land registry administration. The Turkish lira amount registered in the foreign exchange purchase document is declared to the title deed administration as the sales price by the persons concerned.
  • It is possible to sell foreign currency to banks only by the buyer or seller of the immovable, their proxies or representatives.
  • In the explanation part of the foreign currency purchase documents to be issued by banks regarding foreign currency sales, at least, the name, passport number or Foreigner Identity Number of the person, a statement stating that the foreign currency purchased is in USD equivalent and that this transaction is carried out within the scope of this article is mandatory.

What Are The Issues Regarded In The Implementation Instruction On Foreign Exchange Sales To The Central Bank Of The Republic Of Turkey?

  • The currency types to be sold by the banks to the Central Bank are USD, Euro and British pound. In transactions made in other currency types, the said foreign currency amounts are converted into USD, Euro or British pound by the bank and sold to the Central Bank.
  • In the calculation of the USD equivalent of the foreign currency to be specified in the foreign currency purchase documents to be issued by the banks, the USD exchange rate announced at the same time as the foreign exchange rate subject to the transaction is taken as basis.
  • Before the transactions to be made within the scope of the second paragraph of the 13th article of the Capital Movements Circular; the relevant foreign currency amounts are sold to a bank to be sold to the Central Bank at the transaction rate.
  • Accounts in USD, Euro and British pound are opened at the Bank on behalf of the Central Bank, and the foreign currency purchased by the bank within the scope of this Implementation Instruction is notified to the Central Bank until 17:00 and transferred to the said accounts in bulk on the same day.
  • Foreign currencies transferred by the Bank to the Central Bank’s account are purchased by the Central Bank at the transaction rate.
  • Turkish lira amounts in exchange for foreign currency purchase transactions are sent by the Central Bank to the bank’s EFT center free of cost. For transactions that cannot be concluded until 17:30, the Turkish lira amounts are transferred to the required reserve account of the bank at the Central Bank.
  • After the completion of the foreign exchange buying process by the Central Bank, the sale of foreign currency cannot be given up for any reason and the related transactions cannot be cancelled. This matter is notified to the addressees by the banks before the relevant transaction.
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