altinkum

The act that regulates property sales to foreigners has caused much debate. The Constitutional Court had canceled the pertaining article on Jan. 16, causing sale of land to foreigners to come to an abrupt halt. The draft was once again discussed in Parliament yesterday. Experts are divided on the subject, with some in support and some listing drawbacks

YASEMİN SİM ESMEN
ISTANBUL - Turkish Daily News


Parliament yesterday debated the law that regulates the sale of land to foreigners. Some experts believes the new act will allow for more land to be sold to foreigners, while others believe it will bring more limitations, as it will make the procedures more confusing.

Yet, another long-standing issue is will selling land to foreigners become a threat to Turkey's security and independence?

“It should not be overlooked that taking hold of land [by foreign entities] will also mean giving away political and cultural independence,” read a press statement by the Union of Chambers of Turkish Engineers and Architects, or TMMOB.

But some, like Center of Economics and Foreign Policy Studies, or EDAM, Chairman Sinan Ülgen, do not agree. “It is not appropriate for Turkey to have harsh implementations with regard to property sales to foreigners, except for those also stated in the act, as having strategic importance for security reasons,” he said. Ülgen does not believe the lands bought by foreigners can be used as a tool for political leverage.

Istanbul Real Estate Agents Chamber Vive President İzamettin Aşa also supports sales to foreigners, although a bit more conservatively. “I support property sales to foreigners. I do not think it should be restricted. However, it should be under a certain legal framework and in the best interest of Turkey,” Aşa said. He suggested a team composed of military men, bureaucrats, real estate agents, and technical experts, collaborating to study the situation, will be in Turkey's best interest.

Another issue is an economic one. Ülgen finds foreigners' acquisition of land to be beneficial for Turkey economically. “It is a contribution to Turkey's economy. The land that is sold to a foreigner does not become the property of another country,” he added.

Aşa does not agree that selling land to foreigners has any additional economical benefits. “I, too, am an economist. But as real estate agents, we have the chance to see things first hand in the field, with the people. I would like an economist to explain how selling to foreigners is more advantageous,” said Aşa.

He explained that years ago selling to foreigners was more beneficial. “They would compare the prices in Turkey to other countries, find it cheap, and buy. This happened mostly in the Aegean region. But for the past two years, they have been buying at market prices, and have even started bargaining like Turks,” said Aşa.

Another much debated point is the reciprocity principle. It states that citizens of countries that Turkey has reciprocity treaties with, can acquire property in Turkey, just as Turkish citizens can buy property in those countries. There are 88 such countries. “This principle states that if property is sold to Turkish citizens in a country, then property can be sold to that country's citizens in Turkey,” said Ülgen. He explained the amount of land sold to foreigners in Turkey or the amount of land sold to Turkish citizens in other countries were never compared or held as a determining factor.

The list of countries that Turkey has a reciprocity treaty for real estate, used to be announced by the Deeds and Cadastre Directorate, explained Aşa. “But the list has not been announced for the past 1-1.5 years. Now a foreigner [willing to acquire property] has to apply to Deeds and Cadastre Directorate and wait for their answer as to whether he or she can buy the property,” he said. He added that this caused concern among real estate agents that land may be sold to citizens of countries not having a reciprocity treaty with Turkey.

Ülgen dismissed concerns that it is impossible to determine the amount of land owned by companies with foreign partnership or foreign ownership. “It is clear under which companies these lands are registered. The capital structures of these companies are clear; there are no such risks,” he said.

Ziya Ercan is the chairman of Muğla Real Estate Consultants Association and deputy president of Turkish Real Estate Consultants Federation. He explained that even though the Deeds and Cadastres Directorate kept the data on reciprocity treaty, there were some ways to bend the law. “For example, a Turkish citizen would establish a company with a foreign partner. As long as the Turkish share is more than 51 percent, they can buy property. Then the Turkish partner transfers his rights to the foreigner.”

As a whole, Ülgen believes the new act will be beneficial for Turkey. He explained the sale of property to foreigners had become impossible when the Constitutional Court canceled the Deed Act's articles, pertaining to the sales of property to foreigners.

Aşa, on the other hand, is not so optimistic. He said the Constitutional Court had canceled the Act as it gave “unlimited rights” for property sales to foreigners. “But they have increased the rights and brought the act onto the agenda once again. It seems like the Constitutional Court will cancel it again. Such a chaos should be prevented,” he said. In fact, the Republican People's Party, or CHP, is expected to take the issue to the Constitutional Court once again. Aşa added, “It is hard to understand why the pertaining law is being toyed around with so much lately. The rights drawn up by the previous law were clear.”

Aşa said even without the additional confusion, the real estate sector has been suffering. “The Housing Development Administration of Turkey, or TOKİ, and the high inflation rate have already blocked the sector.”

Even though he believes the new act will be beneficial for the real estate sector, Ercan agrees with Aşa that the real estate sector has been suffering. He showed TOKİ's constructions as an element that affected the construction sector adversely. Another element, Ercan explained, was the cheap housing loans the banks have been offering since 2004. “There was a big interest in housing loans between 2004 and 2006. Now the buying power has decreased because of that. And the sector has come to a halt,” he said.