Foreigners Buying Property in Türkiye: Is Currency Exchange Mandatory?

Purchasing real estate in Türkiye involves several legal and administrative requirements for foreign nationals. One of the most important requirements concerns the mandatory conversion of foreign currency before the transfer of property ownership.

Since 24 January 2022, foreign individuals purchasing real estate in Türkiye have generally been required to obtain a Foreign Exchange Purchase Certificate (Döviz Alım Belgesi – DAB) as part of the title deed transfer process.

This requirement applies to foreign individual buyers regardless of whether the property is being purchased for residential purposes, investment or other permitted uses.

But what exactly is a Foreign Exchange Purchase Certificate? Who is responsible for obtaining it? Can foreign buyers pay directly in Turkish lira? And what happens if the certificate is not issued before the title deed transaction?

In this article, we explain the mandatory currency conversion procedure under Turkish law and the principal matters foreign property buyers should consider.

1. What Is a Foreign Exchange Purchase Certificate (DAB)?

A Foreign Exchange Purchase Certificate, commonly referred to as a DAB in Türkiye, is an official banking document confirming that foreign currency corresponding to the property purchase price has been sold to a bank for onward sale to the Central Bank of the Republic of Türkiye (CBRT).

The requirement is governed principally by Article 13 of the Capital Movements Circular (Sermaye Hareketleri Genelgesi) and the relevant implementing rules.

Under this framework, foreign individuals purchasing real estate in Türkiye are generally required to complete the prescribed currency conversion procedure before the title deed transaction.

The purpose of the DAB is to document that the relevant foreign currency has been converted through the banking system in accordance with Turkish foreign exchange regulations.

2. Is Currency Exchange Mandatory for Foreigners Buying Property in Türkiye?

Yes. Under the applicable regulations, foreign individuals purchasing real estate in Türkiye are generally required to have foreign currency corresponding to the purchase price sold to the Central Bank through an authorized bank.

The bank issues the Foreign Exchange Purchase Certificate after the relevant transaction.

The DAB must be issued and transmitted to the competent Land Registry Directorate before the relevant title deed application can proceed.

This requirement does not depend solely on whether the foreign buyer lives in Türkiye or abroad.

Foreign individuals residing in Türkiye are also generally subject to the relevant DAB requirement when purchasing real estate.

However, the rules applicable to foreign individuals should not automatically be assumed to apply identically to foreign companies or other legal entities. Their transactions may be subject to different requirements.

3. How Does the Mandatory Currency Exchange Process Work?

The currency conversion process generally involves the following stages.

Step 1: Determine the Property Purchase Price

The parties first agree on the sale price of the property and arrange the payment process in compliance with applicable legislation.

Step 2: Sell the Foreign Currency to an Authorized Bank

The foreign currency corresponding to the purchase price must be sold to a bank operating in Türkiye for onward sale to the Central Bank.

The conversion cannot be completed for DAB purposes merely by exchanging money at an ordinary currency exchange office.

Step 3: Obtain the Foreign Exchange Purchase Certificate

Following the transaction, the bank issues the DAB containing the required information about the currency conversion, the relevant person and the property.

Step 4: Electronic Transmission to the Land Registry

The issuing bank transmits the certificate directly to the competent Land Registry Directorate through the registered electronic mail system (Kayıtlı Elektronik Posta – KEP).

The purchaser is not required to personally deliver the certificate as a substitute for this electronic transmission.

Step 5: Complete the Title Deed Transaction

Once the necessary certificate has been transmitted and the remaining legal requirements have been satisfied, the property transfer procedure may continue.

4. Who Can Carry Out the Currency Exchange Transaction?

The currency conversion does not necessarily have to be carried out personally by the foreign purchaser.

Under the relevant regulations, the transaction may be completed by:

• The property purchaser;
• The property seller;
• Their duly authorized agents; or
• Their legal representatives.

For example, the seller may arrange the relevant currency conversion where the transaction complies with the applicable requirements.

However, the parties should carefully coordinate the banking transaction, payment arrangements and title deed application to avoid discrepancies.

5. What Information Must Be Included in the Foreign Exchange Purchase Certificate?

The DAB must include the information required under the applicable regulations.

This generally includes:

• The name and surname of the person on whose behalf the currency is converted;
• The relevant passport number or foreign identification number;
• The identification details of the property, including the property number or other required land registry information;
• The US dollar equivalent of the foreign currency sold; and
• A statement indicating that the transaction has been carried out under Article 13 of the Capital Movements Circular or, where applicable, for the relevant Turkish citizenship procedure.

The information recorded on the certificate must be consistent with the applicable banking and land registry requirements.

Incomplete or incorrect information may result in difficulties or delays during the property transfer process.

6. Can a Foreign Buyer Pay for Property Directly in Turkish Lira?

Foreign individuals purchasing real estate in Türkiye should distinguish between the currency conversion requirement and the ultimate payment made to the seller.

Under Article 13 of the Capital Movements Circular, the foreign currency corresponding to the relevant payment obligation must be sold through the prescribed banking procedure.

The resulting payment to the relevant parties is made in Turkish lira.

Accordingly, the fact that the seller ultimately receives Turkish lira does not eliminate the requirement to complete the DAB procedure.

Foreign buyers should therefore avoid assuming that an ordinary Turkish lira bank transfer, without the required foreign currency conversion, will necessarily satisfy the title deed requirements.

7. When Must the Foreign Exchange Purchase Certificate Be Obtained?

Timing is particularly important.

The DAB must be issued and transmitted to the relevant Land Registry Directorate before the applicable title deed application.

Where a real estate preliminary sale agreement (taşınmaz satış vaadi sözleşmesi) is involved, separate requirements may apply to the amount paid in advance.

Under the relevant regulations, the DAB relating to the advance payment must be arranged within the prescribed timeframe, generally no later than the date of the preliminary sale agreement.

Failure to organize the currency conversion and the required documentation in time may delay the transaction.

For this reason, foreign purchasers should coordinate the banking procedure before arranging the final title deed appointment.

8. Is the Foreign Exchange Purchase Certificate Required for Turkish Citizenship by Investment?

Foreign nationals purchasing qualifying real estate for the purpose of applying for Turkish citizenship are also subject to specific legal requirements concerning payment documentation and currency conversion.

The Foreign Exchange Purchase Certificate forms an important part of the relevant documentation.

However, obtaining a DAB does not, by itself, establish eligibility for Turkish citizenship.

Citizenship applications based on real estate investment are subject to additional legal conditions concerning the investment, the property and the applicable administrative procedures.

These requirements should be examined separately from the ordinary property purchase process.

9. What Happens If the DAB Is Missing or Incorrect?

Where the relevant foreign currency purchase certificate has not been issued or transmitted in accordance with the applicable requirements, the title deed application may not proceed as intended.

Similarly, discrepancies involving the buyer’s identifying information, property details or relevant payment amounts may create administrative difficulties.

The parties may then need to contact the issuing bank and the competent Land Registry Directorate to determine the appropriate corrective procedure.

Property buyers should therefore review the necessary documents and coordinate the banking arrangements before initiating the transaction.

10. Conclusion: What Should Foreign Buyers Consider Before Purchasing Real Estate in Türkiye?

Foreign nationals purchasing real estate in Türkiye should be aware that the legal process involves more than agreeing on a sale price and signing a contract.

The mandatory foreign currency conversion procedure is an important part of the title deed transfer process for foreign individual buyers.

Compliance with the applicable banking regulations, obtaining the required Foreign Exchange Purchase Certificate and ensuring its timely transmission to the relevant Land Registry Directorate can help prevent delays and procedural difficulties.

In addition to the DAB requirement, foreign buyers should carefully examine the property’s title deed records, ownership status, applicable restrictions, contractual arrangements and other legal requirements before completing the purchase.

At Malabega Law & Consultancy, we emphasize the importance of evaluating real estate transactions involving foreign nationals in accordance with Turkish property law, foreign exchange regulations and the specific circumstances of each transaction.

Author: Attorney Nil Ak Evren
Malabega Law & Consultancy

Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Applicable rules and administrative practices should be verified before proceeding with a property transaction.