Circular of Capital Movements/ Sermaye Hareketleri Genelgesi
Under Article 13 of Circular of Capital Movements payment for the property must be in TL (the declared value amount going to be shown on the Tapu)
A Foreign Exchange Purchase Certificate is required by the TAPU (DEEDS) office in order to transfer the title of the property
This is also known as a DAB (Doviz Alim Bilgeri) certificate
The ‘DAB’ Certificate explained
In an attempt to protect the Turkish Lira and the economy, the declared amount on the TAPU must be paid in Turkish Lira (TL).
This entails the Buyer sending their GBP or USD from their home country in GBP/USD to arrive in GBP. The amount to be declared is then transferred into Turkish Lira (TL) with the Central Bank of Turkey, this process is carried out at their own bank but currency is bought via the Central Bank of Turkey. A certificate for this exchange known as DAB is then issued to the buyer for the TAPU office.
If the foreign buyer holds their money in Turkish lira, they have to transfer back to GBP or their home currency then do this process again!! So when sending money to Turkey make sure it arrives in GBP/USD as well.
If the Seller is Turkish, they may be happy to receive all of the final payment in TL or at least the TAPU value in TL and the remaining amount in a foreign currency. However, if the Seller is a foreigner, they may require the whole amount to be paid in their own foreign currency. The agreed amount to pay the seller is as set out on the Purchase contract.
If the Seller requires full payment in foreign currency the money exchanged for the DAB will then need to be converted back to Foreign Currency. It is important to note that buying and selling exchange rates differ. The buying rate is always lower than the selling rate and this is standard worldwide. Due to the difference in the buying and selling exchange rates the buyer will inevitably lose money over the two transactions. There is also a Government tax to pay on converting Turkish Money to any foreign currency.
Exchange rates are impossible to predict, therefore the amount of loss on the day of the two foreign currency exchange transactions is also impossible to predict.
In recent days especially since the election it has become common practice and seems only fair that the loss on the day is shared between the Seller and Buyer. Again, these details should be confirmed in the Sales Purchase Contract.
Example of obtaining DAB certificate:
The declared amount will be 2,000,000
Date of exchange 23.05.23
£80,000 @25 buys 2,000,000 (Central bank of Turkey rate on 23.05.23 – always slightly higher than bank rate)
The receipt for the DAB shows 2,000,000 and is passed to the TAPU office
As the seller wants their payment in GBP, the TL is then exchanged back to TL at the bank ‘Buy Back’ rate
2,000,000 @ 26.5010 = £75,468.85 less Government tax for exchanging Foreign Currency approx. £130
Total Received back £ £75,338.85
Original Amount £80,000 less received back
Difference lost in the exchange £4,661.15
This difference varies daily with the exchange rates and with the recent election the split has been significant due to the Government not wanting any movement in Foreign Currency.
So to keep things fair to both buyer and sellers, if the seller insists on their payments in GBP then the difference lost on the day of exchange transaction should be split between both and will be written in to your contract to reflect this.
