Selling Turkish Property After the Three-Year Hold: Title Annotation, Timing and Capital Gains

What the Three-Year Commitment Actually Restricts

Where Turkish citizenship is acquired through the real-estate route under Article 12 of Law No. 5901 and Article 20 of the Citizenship Law Implementation Regulation, the qualifying property is registered with an annotation (şerh) on the title deed recording an undertaking not to dispose of it for three years. The annotation is entered at the Land Registry at the time of acquisition and is the mechanism by which the holding obligation is enforced: while it subsists, the Land Registry Directorate will not process a transfer of the property.

The restriction attaches to the property and to disposal of it. It is not a restriction on the citizenship itself, and it does not make the citizenship conditional in the sense of being revocable at will. Citizenship conferred by Presidential Decree is a completed legal act.

When the Three Years Begin — the Point Most Investors Get Wrong

The three-year period runs from the date of the Tapu transfer — that is, from the registration of the acquisition at the Land Registry — and not from the date of the Presidential Decree conferring citizenship. This distinction has significant practical consequences, because the interval between acquisition and the Decree is frequently a year or more.

An investor who calculates the holding period from the date of the citizenship decision will therefore consistently overestimate how long the property must be held. In our practice experience, the misunderstanding is common and, because it is conservative in direction, it usually results in investors holding property considerably longer than the regulation requires. The corresponding risk runs the other way for anyone who assumes the period is shorter than it is: a disposal attempted before the annotation period has run will not be registered.

After the Period Ends

Once the three-year period has elapsed, the restriction ceases to bar disposal and the property may be sold. The sale is an ordinary Turkish real-estate transaction and is subject to the ordinary requirements: verification of clear title, settlement of any encumbrances, a valuation where required, payment of transfer duty, and registration of the transfer at the Land Registry. Where the seller is not physically present in Türkiye, the transaction is conducted through a representative acting under a notarised power of attorney.

A sale after the period has run does not disturb citizenship already conferred. The holding obligation was discharged by holding for the required term.

The Five-Year Capital Gains Threshold

The most consequential tax feature of a post-hold sale is one that operates on a different timetable from the citizenship regulation, and the two are frequently confused. Under the Income Tax Law No. 193, gains realised by an individual on the disposal of immovable property are treated as capital gains (değer artış kazancı) where the disposal occurs within five years of acquisition. Disposals made after that five-year period has run are generally outside the scope of this charge for individuals holding property in a private, non-commercial capacity.

The citizenship regulation imposes a three-year restriction. The tax law applies a five-year threshold. An investor who sells immediately upon the expiry of the three-year annotation is therefore selling within the taxable window, while an investor who holds for a further two years may fall outside it. The difference between a sale in year three and a sale in year five is not a matter of degree — it can determine whether the gain is taxable at all.

Whether the five-year treatment applies in a given case depends on how the property was acquired, the capacity in which it is held, and whether the pattern of activity is characterised as commercial. These are matters requiring assessment against the specific facts rather than assumption.

Proceeds and Transfer Abroad

Türkiye does not operate a general exchange-control regime preventing the outward transfer of sale proceeds. Transfers are, however, executed through banks that are subject to the anti-money-laundering obligations of Law No. 5549 and MASAK regulation, which means the institution will require documentation evidencing the source of the funds and the underlying transaction. Sale proceeds supported by a registered Tapu transfer and a documented payment trail are ordinarily straightforward in this respect; proceeds that cannot be traced to a documented transaction are not.

Planning the Exit Before the Entry

Exit is a foreseeable stage of a real-estate citizenship investment, not an afterthought. The interaction between the three-year regulatory restriction, the five-year tax threshold, the currency in which the gain is realised, and the investor's tax residency at the moment of disposal produces materially different outcomes depending on sequencing. Investors who consider the exit at the point of acquisition retain options that are no longer available to those who consider it only when they wish to sell.

This article provides general information on Turkish law and does not constitute legal or tax advice. The tax treatment of a disposal depends on the specific facts, including the date and manner of acquisition and your tax residency at the time of sale. To review the position of a property held under the citizenship route, book a consultation with Av. Abdulsamed Burak Turak.