Efe Ülken
Ülken Law Firm, Istanbul
efe@ulken.av.tr

Ece Tulunay
Ülken Law Firm, Istanbul
ece@ulken.av.tr

Introduction

The acquisition of immovable property is a fundamental institution of property law, which determines the procedures and legal conditions under which the right of ownership is transferred to individuals. In this context, Article 705 of the Turkish Civil Code No 4721 (TCC) establishes the basic framework for a registration-based ownership regime by regulating the general rule and exceptional circumstances regarding the acquisition of immovable property. This article will delve into the two ways of acquiring immovable property through legal transactions: real estate sale agreements, and preliminary agreements for real estate sales, which serve as commitments for the conclusion of such agreements.

Types of acquisition of ownership of immovable property

Under Article 705 of the TCC, the acquisition of immovable property is generally effected by registration in the land registry. This principle is essential for the secure acquisition of real rights and for their enforceability against third parties. However, this condition is not absolute. In the presence of certain legal grounds, immovable property ownership may be transferred and acquired without registration. In such cases, examples include occupation, acquisitive prescription and acquisition by way of inheritance. Beyond these, the TCC also lists certain special cases for acquisition without registration, such as the dissolution of a legal entity, the devotion of immovable property to a foundation, the contribution of capital to commercial companies and the formation of new land.

Nevertheless, even if title is acquired prior to registration, it is mandatory for the owner to register in order to exercise any acts of disposition.

In contrast, in dispositional transactions such as a sale or exchange, the buyer does not acquire the right of ownership until the registration in the land registry is completed. A sales agreement is merely an obligational transaction and does not transfer ownership; the transfer of ownership is completed upon its registration in the land registry.

Real estate sale agreements

Real estate sale agreements are bilateral arrangements that impose reciprocal obligations upon both parties and are subject to mandatory formal requirements. In such agreements, each party’s obligation constitutes both the consideration and the legal basis for the obligation of the other. Accordingly, once the agreement is concluded, the parties simultaneously assume performance obligations and acquire corresponding rights of claim against one another.

Within the scope of a real estate sale agreement, the seller and the purchaser agree on the transfer of a specified immovable property for a determined consideration. In this context, the purchaser undertakes the obligation to pay the purchase price in return for acquiring the property, while the seller undertakes the obligation to transfer ownership of the immovable in consideration of the payment received. As a result, the purchaser acquires the right to request registration of the immovable in their name, whereas the seller acquires the right to demand and collect the purchase price.

The text of the agreement must clearly set out the identities and legal status of the parties, the land registry details of the immovable property, its address and parcel numbers, as well as the purchase price and the terms of payment.

Moreover, it must be emphasised that completion of the transfer process requires the submission of certain documents, including a certificate from the municipality confirming the absence of outstanding tax liabilities, a document indicating the real estate tax assessment value and a valid compulsory earthquake insurance policy. Failure to submit these documents to the Land Registry Directorate or notary prevents the completion of the transfer.

Form requirement in real estate sale agreements

In Turkish law, the general rule governing agreements is the principle of freedom of form. Indeed, Article 12 of the Turkish Code of Obligations No 6098 (TCO) stipulates that ‘unless otherwise provided by law, the validity of agreements is not subject to any form requirement’. Pursuant to this provision, as a rule, agreements may be validly concluded without being subject to any formality.

However, the legislator has introduced a specific exception for real estate sale agreements. Article 706/1 of the TCC provides that such agreements shall only be valid if executed in an official form. This requirement has been imposed due to the direct connection between real property ownership and public interest, and it also aims to ensure publicity in real property law, safeguard the clarity of declarations of intent and facilitate proof. The official form requirement means that the legal transaction must be carried out before a public official, such as a notary or a land registry officer. Accordingly, real estate sale agreements must be executed in the presence of a land registry officer or a notary public.

Effect of annotations and declarations in the land registry on real property

Following the parties’ agreement on the terms of sale, in order for the registration process to be properly completed, the immovable property must not be subject to a mortgage, attachment or any other encumbrance.

Annotations and declarations entered in the land registry constitute important elements that determine the legal status of the immovable, enabling the monitoring and identification of rights and obligations associated with the property. The legal effect of such annotations and declarations is directly linked to the consequences they produce vis-à-vis third parties.

Pursuant to the Turkish Civil Code, annotations and declarations recorded in the land registry are binding not only upon the owners of the immovable but also upon third parties who conduct transactions based on such records.

Although the sale of an immovable property encumbered with an annotation is possible, depending on the nature of the annotation, the transaction may be subject to legal or administrative restrictions. Accordingly, the impact of an annotation on the transfer of ownership varies in line with its specific legal character.

Annotations constituting an absolute prohibition on sale

Certain annotations render the sale of the immovable entirely impossible. For instance, a court-ordered annotation of ‘non-transferable’ makes any transfer of the property legally unenforceable. Such annotations typically arise from interim injunctions, family residence annotations or expropriation proceedings.

Situations where sale is subject to authorisation

Some annotations require obtaining the approval of specific institutions or authorities in order for the sale of the immovable to be valid. For example, the sale of an immovable property located within an Organised Industrial Zone (OIZ) may be subject to the prior consent of the relevant OIZ directorate. Similarly, in inheritance matters, the sale or transfer of inherited properties – particularly in cases involving fraudulent collusion by the deceased – may be subject to certain legal procedures under inheritance law among heirs.

Annotations potentially leading to legal issues after sale

Annotations such as mortgages or attachments do not directly prevent the sale of an immovable property; however, the purchaser may face legal and financial liabilities stemming from such encumbrances. For instance, if a mortgaged property is acquired and the debt secured by the mortgage is not discharged, the creditor may demand the compulsory sale of the immovable. Similarly, although the transfer of an immovable subject to an attachment is legally possible, if the underlying debt remains unpaid, the property may ultimately be sold through enforcement proceedings.

Preliminary real estate sale agreement

A preliminary real estate sale agreement is a bilateral agreement that imposes obligations upon both parties and aims at the transfer of an immovable property at a future date under the conditions stipulated in the agreement. In other words, it constitutes a commitment to conclude, at a later stage, a real estate sale agreement in the official form required before the land registry officer.

Due to their nature as undertakings, preliminary sale agreements may also involve a promise to sell immovable property not yet owned by the promisor. This is because, under such agreements, the promisor merely undertakes the obligation to execute a real estate sale agreement in the future. Ownership of the immovable at the time of entering into the preliminary agreement is not a prerequisite. Since the agreement entails an undertaking to complete the transfer before the land registry on the date specified in the preliminary sale agreement, its legal character is regarded as a commitment transaction.

Pursuant to Article 706 of the Turkish Civil Code, the validity of all agreements aiming at the transfer of ownership of immovable property is contingent upon their execution in official form. A preliminary real estate sale agreement is likewise a preliminary arrangement by which the parties undertake to effect the transfer of ownership in the land registry at a future date. Such agreements acquire validity only if they are executed in the form of an official deed and signed by both parties in the presence of a notary public. The form requirement is a matter of public policy and therefore mandates that the agreement be drawn up by a notary in official form.

In preliminary real estate sale agreements, the purchase price to be paid by the promisor-purchaser must be explicitly stated in the text of the agreement, together with clear provisions governing the method of payment.

It should also be emphasised that a promise of sale concerning immovable property may be made in respect of rights arising from other contractual relationships, such as construction agreements in return for land share, lease agreements, purchase, pre-emption or repurchase agreements. In accordance with Article 1009 of the Turkish Civil Code, such promises may also be annotated in the land register where the immovable property is recorded. Once annotated, these promises become enforceable against third parties who subsequently acquire rights over the property.

Taxation

In the case of real estate transactions conducted without a commercial purpose, two types of tax liabilities arise. The first is the payment of the title deed fee by both the transferor and the transferee, separately, pursuant to the Law on Fees. Secondly, under the Income Tax Law, with the exception of acquisitions without consideration, any gain derived from the disposal of immovable property within five years from the date of acquisition is subject to taxation as capital gain, provided that such gain exceeds the annual exemption threshold. The exemption threshold applicable to capital gains arising from the sale of immovable property in 2025 has been announced as TRY 120,000.

Transfers and acquisitions of immovable property before the Land Registry Directorate – whether by way of consideration, through a contract of maintenance until death, or pursuant to the rules of barter – also fall within the scope of the title deed fee. In real estate transactions, both the transferor and the transferee are separately obliged to pay this fee. The title deed fee is levied at the rate of 20 per cent on the actual transfer or acquisition value declared, and is collected separately from both the seller and the purchaser. However, if the declared transfer or acquisition value is lower than the real estate tax value of the immovable concerned, the fee is calculated based on the real estate tax value.

In order to avoid exposure to tax reassessments with penalties, both the purchaser and the seller are required to declare the actual purchase price in real estate transfer and acquisition transactions conducted before the land registry. Moreover, if the declared purchase price is lower than the real estate tax value of the immovable property subject to the transaction, the title deed fee must be calculated and paid based on the real estate tax value.

In cases where it is determined that the declared transfer or acquisition price does not reflect the actual transaction value, or where the title deed fee has been calculated on a value lower than the real estate tax value, the deficiency will be collected from both the purchaser and the seller together with a tax loss penalty of 25 per cent.

Conclusion

Preliminary sale agreements serve as preliminary undertakings that establish a bridge to future registration. They must be executed in the form of an official deed before a notary public and, once annotated in the land register pursuant to Article 1009 of the TCC, they may be asserted against rights acquired by third parties thereafter.

Real estate sale agreements are quite comprehensive contracts, and during the transfer process, any annotations on the property must be examined before completing the sale. By managing the real estate sale process with due diligence, the transfer of ownership will be valid, and potential disputes that may arise afterward will be prevented.