Mortgages for foreigners who are looking to invest in Turkish real estate.

Foreigners hoping to purchase real estate in Turkey can now get credit in the form of special mortgages. The Turkish Economic Bank, or TEB, is teaming up with BNP Paribas to offer mortgages for foreigners who are looking to invest in Turkish real estate.

BNP Paribas International Buyers, the international mortgage branch of BNP Paribas, and TEB, are partnering to make the mortgages available.

BNP Paribas International has been a leading name in mortgages in Europe and has been working actively over the last 17 years to provide real estate credit to foreigners living in Europe. TEB has been a shining participant in Turkey's new mortgage economy. The combined experience, expertise and knowledge of TEB and BNP Paribas International have created a viable and competitive mortgage offering that will be very helpful to foreign real estate investors, said Cemal Kişmir, the vice president of TEB's personal and enterprise banking, speaking at a press conference. TEB and BNP Paribas are hoping to be the market leader in foreign mortgage offerings in five years, said Kişmir.

The Turkish Parliament approved a mortgage law in early 2007। The framework provided by the law began the process of building a mortgage market in Turkey. Although growth has been steady in the Turkish mortgage market, it is still a fledgling market compared to its U.S. and European counterparts.

ISTANBUL - Turkish Daily News

Turkish Property Set to Fly With New Law

The Turkish government is expected to bring a major amendment to the country's investment law targeted at improving conditions for foreign investors. Experts opine that this change could put the boosters on the already high-flying property market of the country.

The Foreign Direct Investment Law governs all foreign investments in property in Turkey. At the moment, this law does not allow overseas buyers to directly purchase or own more than two and half acres of land. However, the new amendment is aimed at lifting this limitation in addition to clarifying the position of investors who wish to buy larger tracts of land.

In a talk with Property Wire, Orhun Ozdener Vahaboglu, real estate attorney and consultant in Istanbul informed that Turkey is currently seeing a flood of British and European tourists, many of whom are also potential investors. A report by Principal International lends credence to this; it states that 17,000 Britons already own a property in Turkey and the number is rising.

'Turkey is a growing country with a lot of potential, as the European [Union] membership is a pending issue,' Mr. Vahaboglu said. His comments are supported by Hot News Turkey, which reported that investment Turkish property has crossed the USD10 billion (GBP5.44 million) mark in the last five years and continues to rise.

PROPERTY investors looking to Turkey for solid investment

PROPERTY investors looking to Turkey for solid investment prospects will be encouraged by the news that the Turkish Tourist Office has been nominated for an international award.

In the last two months, visitor numbers to Turkey have shot up. The Tourism Ministry announced a 19.17 per cent increase in June in the number of foreign visitors, which is a rise of nearly four million tourists in the first half of the year, compared with the same period last year.

Each year, the 2008 World Travel Awards select a tourist board winner, and this year, Turkey is among those nominated in the Europe's leading tourist board category. The winner of the award will be announced in December.

An increase in the number of tourists can only be a good thing for investment potential and rental returns.

In a further bid to increase tourist numbers, the Turkish tourist board is teaming up with the Turkish private sector to generate an €200 million advertising campaign to highlight the potentials of the country as both a holiday or investment destination.

Last year, Culture and Tourism Minister Ertugrul Gunay stated that the Turkish Government was planning to increase the amount it spends on promoting Turkey to prospective visitors overseas, so this new advertising campaign is fulfilling that plan.

Mr Gunay also said that the country had set itself the target of boosting tourist numbers from 20 million in 2007 to 25 million this year.

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Turkey is a top property hot spot

Turkey is a top property hot spot :
Average annual growth rate of 7.3% since 2004, Turkey has established itself as a leading emerging market for property investors. Burgeoning tourist industry and planned reforms ahead of its EU accession, poised to become one of the world’s top 10 economies by 2050. Where to buy: Belek, Turkey’s golfing mecca with plans to add up to 15 golf courses to its range of 5-star golf retreats over the coming years, Belek is bathed in sunshine for 320 days a year. Property investment has increased by 40% since 2005. Bodrum, the yachting and tourism hub of the country where property prices have risen by 30% over the past two years. Altinkum is cheaper than Bodrum yet 90 minutes drive by car from the prime investment resort town offering varied opportunities for on-sell and lettings. Watch out for: check the planning so you don’t have ugly builds near your investment; ensure that property for sale is accompanied by title deeds and make sure you get a competent solicitor to explain the terms before making the decision to purchase. Homes Overseas – 14 August 2008 (Abridged)

Turkish real estate law:
A General look at Turkish real estate law concerning foreign persons

Real estate acquisition by foreign persons is regulated under two different pieces of legislation:

a)The Foreign Direct Investment Law, which used to allow foreign-owned companies to acquire real property as if they were a locally owned Turkish company.

b)The Land Registry Law, which allows both real persons and legal persons to acquire real estate in Turkey.

Despite the absolute freedom granted to companies by the Foreign Direct Investment Law, the Land Registry Law imposes some limitations on foreigners.

I wrote about the annulment of the Foreign Direct Investment Law earlier, but I find it useful to repeat that the sub-article that allowed foreign companies to acquire property was revoked by the Constitutional Court.

This decision was made in March 2008 and published on April 16. It will come into force after six months following the publication of the court decision.

This means that the annulment will go into effect on Oct. 17 and that companies formed under the Foreign Direct Investment Law will be able to acquire property until this date.

Land Registry Law Article 35, Sub-clause 7, was revoked on Jan. 16. The court granted a grace period of three months, but no legislation was made within this three-month period.

Having nothing better to do, the Ministry of Public Works and Housing published a decree on April 14 and froze all pending applications by foreign persons for property acquisition.

New legislation

A new law (No. 5782) was enacted by Parliament on July 3 to regulate property acquisition by foreign persons. This new law regulates Article 35/7 of the Land Registry Law, which was revoked by the Constitutional Court. The law also regulates the pending Article 36, which was revoked earlier.

Limitations introduced by this new law have three main sections:

The first limitation is to the extent of the property which can be acquired by a foreign person. My remark would be that no new regulations have been made to the revoked Article 35/1, which authorizes the Cabinet to increase the maximum volume of 2.5 acres of property to 30 acres.

This matter is pending and means that the extent of the property which can be acquired by a foreign person in Turkey is still limited to 2.5 acres per person. Parliament has kept the limitation per person untouched.

The second limitation is to the surface area of the land which can be acquired by a foreign real person. The new law has set up the limitation in a pro rata way against foreigners.

In earlier legislation, the maximum area of land which could be sold to foreigners was limited to 0.5 percent of the total surface area of the city the property is in.

The new legislation has changed this limitation to: a) the central counties and other counties b) 10 percent of the applicable and planned zoning plan of the central county or other counties.

The third limitation is based on the limitation of the objectives of a company formed in Turkey by foreign investors.

Article 36 (as amended) stipulates that a Turkish company owned by a foreign investor is allowed to acquire property as long as the acquisition falls within the scope of the company's objectives cited in its articles of association. One should note that drafting the articles of association is now very important for foreign investors.

This limitation shall also apply to a Turkish company which owns property and is changed into a Turkish company operated by foreign investors through a company merger or acquisition (M&A).

If the foreign investor Turkish company is dissolved and if the foreign shareholders intend to acquire the company's properties after the dissolution, the real estate shall again be subject to Article 35 (as amended by law No. 5287) of Law No. 2644.

Many professionals comment that Law No. 5782 fixes annulments in both the Foreign Direct Investment Law and the Land Registry Law. In my opinion, the regulation does not really fix the revoked sections of the Foreign Direct Investment Law just yet.

Companies formed under the Foreign Direct Investment Law were treated as Turkish companies and could acquire real estate property freely. Under the new law, authorities shall have the jurisdiction to inspect if the real estate investment of a foreign investor Turkish company is in compliance with the objectives of the company.

Authorities have not yet released any communiqués or regulations on how the amended articles will be applied.

Antalya hotels filled to capacity and its only June Foreign visitor attraction to Turkey's tourism centre of Antalya continues to grow, leading to full hotel occupancy even at the beginning of the summer season, Mediterranean Tourism Hotels Union (AKTOB) Chairman Sururi Çorabatir has said. Tourism growth has seen a remarkable acceleration in the last five months, and this growth continued in June, Çorabatir said, adding: "Antalya hotel occupancy rates are at the highest levels. Even finding a single room is difficult. We expect high occupancy to continue until mid-October." The chairman underlined that seasonal occupancy rate peaks had already been reached: "Antalya has entered high-occupancy season. Not only five-star hotels, but other accommodation facilities are also expected to reach 100 percent occupancy soon." The region rightly deserves the visitors it hosts from around the globe, Çorabatir said, and the number of tourists from the Commonwealth of Independent States (CIS) in particular has increased significantly. The number of tourists from European countries has grown between 6-8 percent and the number of tourists from the Commonwealth of Independent States has increased between 25-30 percent so far this year. Antalya has the capacity to serve conference and sports tourism, the chairman said, with its conference halls that can seat a total 118,000 and facilities for the 1,500 sports teams it hosts each winter. Hotels can operate at full capacity during the winter as well as the summer, he said. TODAYS ZAMAN 24 JUNE 2008 (Abridged)