The buyer conducts a non-encumbrance check on the property
Agency: Land Registry Office
Although not mandated by law, non-encumbrance checks are essential procedures. Without them, buyers do not proceed with the transfer process. The buyer almost always checks whether or not the property is free of liens and encumbrances. For this, the seller would need to obtain the document showing that the property is free of disputes.
By law, title deeds are open to anyone who legitimizes their interest. However, in practice the records are not accessible to the public: the buyer can obtain this document only with a power attorney of the seller. Therefore, this document is typically obtained by the seller who is often accompanied by the buyer. For transactions that are undertaken by lawyers, this procedure is conducted by lawyers (who have the power of attorney from the seller and have a legal right to search titles).
The seller or the interested party takes an appointment on the general IT (TAKBIS) system to be present at the Land Registry office at the given time. The information at the Land Registry is computerized; so the search takes minutes. Conducting a non-encumbrance check is free of charge for the real person owner or for those who hold a right on the relevant property (or their representatives). In September 2017, the Land Registry introduced a new online system (WebTapu) which allows individuals to look into the details of their property electronically via e-government without visiting land title offices. One of the advantages of web-deed system is that the property owner (individual) may authorize his/her real estate agent to look into the details of his/her property electronically and this is free of charge.
If the buyer or seller wish to obtain a copy of the records displaying the status of the property, a fee applies (TL 9.30 per page + a fixed fee of TL 21 that only applies if it is not the owner of the property who is requesting a copy of the records). If the application is made in a land registry office other than the land registry office which the property is registered at, then the applicant is required to pay an additional fixed fee of TL 42.
Time and cost: Less than 1 day (online), TRY 37.5
Managers obtain an authorization certificate of their authority to conduct transactions on companies’ behalf
Agency: Company Registrar
If the sale transaction will be made in person by the company signatories, the managers should obtain a separate document from the trade registry, showing that they have the authority to conduct transactions before the land registry office on their companies’ behalf. According to the General Communiqué of Act of Fees No. 80, the cost for obtaining an authorization certificate for company managers is TL 44. However, the registration and announcement of the authorization of a company’s manager in the Trade Registry Gazette costs TL 420.60.
If the sale transaction will be conduct by a proxy issued by the company signatories, the representatives should be provided with special proxies, which will be drawn by the notary and bear the photograph and the statement of the authorized manager. The notary would require the manager to provide it with the above mentioned authorization document which should be obtained from the trade registry and the signature circular of the company setting out the authorized signatories of the company and the way in which they are authorized to represent the company.
The notary will charge a fee of approximately TL 200 for issuing the power of attorney. The validity period of this authorization certificate is one year as of its date of receipt.
Time and cost: 1 day, TRY 54.4
Obtain a property tax clearance letter and a real estate value statement from the Municipality
Agency: Municipality
The parties need to obtain a document showing (i) the current value of the property; and (ii) that there are no outstanding debts related to the property tax from the local municipality. This letter is required by Turkish Real Estate Tax Law No. 1319, and Land Registry Law No. 2,644. The document states (i) whether there is any unpaid property tax liability as of the date of issuance of the document; and (ii) the current minimum benchmark market value of the property (for the year in which the document is requested).
This value statement is used by the land registry officer to determine the mortar dues.
The parties could obtain this document either from offices of the relevant municipality or online. The online service can be accessed through www.turkiye.gov.tr, this service is free of charge. However, obtaining this document online is still not a common practice in Istanbul. Therefore, the seller obtains the value statement in person from the municipality where the real estate is situated.
The municipalities update these value statements every year by categorizing properties according to their location and features.
Time and cost: 1 day, no charge
Parties apply for registration and obtain tax payment assessment
Agency: Land Registry office
The owner of the real property has now opportunity to make an online application for the sale of the property through online through web tapu. So, the parties don’t have to be present before the land registry office to make the application. With the new system, the owner of the property can upload the necessary documentation and information while making the application. After that, the documents will be examined by the officers and will send and SMS to the owner regarding the registration fee and mortar dues calculated as per the declared purchase price (or value of the property determined by the municipality, whichever is higher). After payment of the relevant fees, the parties should be present for the signature before the land registry office on the date and time appointed by the land registry. The parties should also submit original copies of the documentation uploaded through the web tapu website while making the application. The documentation shall include;
The documentation will include:
- Copies of the tax registration certificates of the buyer and seller companies;
- The notarized proxies of the representatives (if they will perform the transaction);
- The identity cards of signatories (passport for foreigners);
- One photograph of the seller (or his representative) and two photographs of the buyer (or his representative);
- Signature circular of the buyer company and seller company;
- Title deed copy or information regarding the title deed of the property;
- A document showing the current value of the property, issued by the relevant municipality;
- An earthquake insurance policy (it is not required if the property does not fall within the scope of the Law of Natural Disaster Insurance numbered 6305 published in the Official Gazette dated 18 May 2012 numbered 28296); and
- Signatories shall keep the seal of the company available during the procedure.
- Loan documentation (if the property is bought by taking out a loan).
Time and cost: Less than 1 day (online), no charge
Registration fee is paid at a commercial bank
Agency: Commercial Bank
Mortar dues are paid to the bank account of the land registry, and the bank will give a receipt of the payment. The mortar due is equal to 4% of the declared amount in Turkish Lira, collected 2% each from the parties, but in practice usually the purchaser pays all. On September 30, 2017, mortar increased back to 4% of the sale price of the property as by decree of the Council of Ministers is numbered 2017/9973. The parties also pay a registration fee (Döner Sermaye Hizmet Bedeli) to cover overall expenses of Land Registries in Turkey. This is usually paid by the purchaser to the bank account of the Land Registry. Registration fee is calculated by multiplying TL 103.50 fixed charge with local coefficients subject to the Law regarding Service Charges to Be Collected by Land Registry Offices numbered 6544. Local coefficient for all districts of Istanbul is set out as 2.5 in the tariff published by the Directorate General of Land Registry and Cadastre. Therefore, the total amount of the service charge of a property transfer transaction carried out at a land registry office in Istanbul for a two-story building will be TL 258.75. General IT system informs the concerned parties with a text message when the service charge and land registry fee should be paid at the commercial bank. Land registry fees and service charges can also be paid online via IT system of the General Directorate of Land Registry and Cadastre. This message is being sent to the parties after the evaluation process is completed by the land registry officers. The commercial bank to which the service charge and land registry fee are deposited is a bank designated by the land registry office. In other words, the parties have to deposit the concerned amounts to the bank account of land registry office at a bank determined by the land registry itself.
Most of the payments are made in electronic environment according to the electronic collection number given by the electronic system. Moreover, online payment can be made from the web-tapu system established by TKGM.
Time and cost: Less than 1 day (online), TRY 66,759.31 (Registration fee of TL 128 multiplied by Istanbul’s local coefficient of 2.5 + 3% of declared transaction price (mortar dues) or 3% of the taxable value of the real estate (whichever is higher) + TL 17.5 as fixed fees)
Transaction is completed at the registry office
Agency: Land Registry office
Once all the above Procedures are fulfilled, a text message sent from general IT office of Land Registry that the parties should be present at the land registry office at the appointment hour decided previously by the Land Registry for the finalization of the transaction.
The parties meet at registry office before the registry manager or his deputy at the appointment hour decided previously. The purchaser pays the consideration at that time. If it has already been paid, the seller would declare that it has already been fully paid. Then the parties both sign the land record sheet and the photographs of each of the parties are attached to the document. Each person witnesses that he/she had made the transaction mutually with the person in the picture, the transfer of the title is then completed. The documentation shall include: payment receipts and ID cards.
Time and cost: 1 day, paid in Procedure 5
