The ongoing search for alternative accommodation in Turkey’s tourism sector is transforming the short-term rental of secondary residences into a new branch of trade. This growing practice has prompted Turkey’s Ministry of Culture and Tourism (the “Ministry of Tourism”) to take concrete steps to determine the criteria for the rental of residences to both real and legal persons for tourism purposes.
Thus, on 10 October 2023, with the aim of developing a comprehensive strategy, the Ministry of Tourism submitted its “Legislative Proposal on the Rental of Residences for Tourism Purposes and Amendments to Other Laws” (the “Legislative Proposal”) to Turkey’s parliament. The Legislative Proposal includes regulations on the activities, limitations and sanctions to be carried out in the secondary residence rental sector and aims to protect the peace and order of other condominium owners in residential areas and to prevent possible conflicts between them. In addition, it is also aimed to prevent buildings that cannot be converted into “accommodation facilities” from being used for that function and consequently deteriorating the general texture of the surrounding residential area.
The Legislative Proposal, which also includes amendments to the Tourism Encouragement Law No. 2634 (the “Tourism Encouragement Law”), is expected to be enacted into law in the coming months.
We provide highlights of the Legislative Proposal below.
Regulations Regarding the Rental of Residences for Tourism Purposes
The Legislative Proposal primarily defines the procedures and principles related to the rental of residential properties. Within this framework, it specifies the issuance of permits, administrative sanctions, and legal provisions applicable to residences rented for touristic purposes.
- Rentals of Less than 100 Days are Included in the Scope of the Legislative Proposal
Within the scope of the Legislative Proposal, rentals for tourism purposes are defined as the rental of residences for a maximum period of 100 days and for any purpose.
In Turkey, as employees who work in some sectors usually reside in the places where they work for more than three months, leases for more than 100 days are excluded from the scope.
The legislator has tried to prevent the circumvention of the “100-day” threshold and the obligations to be subject to the Legislative Proposal by stipulating among the sanctions an administrative fine of TRY 1,000,000 (approx. EUR 33,780) on “those who rent out the same residence more than four times within one year as of the date of the first agreement, although they enter into a rental agreement for more than 100 days each time”.
- Permit Certificate Must be Obtained
For those renting before the Legislative Proposal enters into force: Pursuant to Provisional Article 1, those currently renting residences for tourism purposes are required to apply to the Ministry of Tourism to obtain a permit certificate by the end of February 2024. Those that fail to comply with this obligation will be subject to the sanctions listed below.
For those renting after the Legislative Proposal enters into force: Landlords will be obliged to obtain a permit certificate from the Ministry of Tourism, the fee for which will be determined by the Ministry of Tourism, prior to the signing of the relevant rental agreement.
The main rules regarding the permit certificate is expected to be as follows:
- The Ministry of Tourism may also exercise its authority to issue a permit through the provincial governorship.
- It is a requirement that the plaque prepared by the Ministry of Tourism be displayed at the entrance of the relevant residence in parallel with the practice of hotels.
- In permit applications, it is mandatory to present a decision, unanimously adopted by all condominium owners in the building where the relevant independent unit is located, indicating that the rental activity for tourism is deemed appropriate by the condominium owners. In residential complexes consisting of multiple independent units, this requirement will only apply to the building where the residence subject to rental for tourism purposes is located, and a copy of the permit will also be submitted to the site’s management.
- In buildings with more than three independent units, a maximum of 25 percent of the independent units can be issued for one person. For example, in a complex with 40 independent units, if a landlord owns 14 residences, they will be able to obtain a permit for a maximum of 10 residences.
- Permit certificate issuance procedures will be finalised within three months from the date of the application.
- Those whose applications are not accepted will not be able to operate. However, the rights of users will continue until the expiration of the rental agreement.
- The obligation to obtain a permit certificate belongs to the landlord, though it will be possible to benefit from the intermediary services of travel agencies certified in accordance with the law in the execution of activities related to rentals for tourism purposes.
- The person who rents the residence from the permit certificate holder is prohibited from renting the residence to third parties.
If the Same Landlord Owns More Than Five Independent Units in the Same Building
If the number of independent units subject to the issuance of a permit certificate exceeds five in the same building in the name of the same landlord, the Legislative Proposal requires the landlord to obtain a business license. In this context, the following must be submitted in the application for a permit certificate:
- the business license; and
- if the residence subject to the application is located in a building with more than one independent unit, the decision taken unanimously by all condominium owners.
- Identity Notification Obligation
The provisions of the Identity Notification Law will apply to residences for which a permit is issued for rental activities for tourism purposes. For this reason, the permit certificate holder will be deemed to be the responsible person for the notification obligation. Accordingly, the permit certificate holder will be obliged to notify the relevant law enforcement authorities, such as the gendarmerie or police, of the identity information of the occupants of the rental unit through the Identity Notification System.
- Sanctions Stipulated under the Legislative Proposal
The Legislative Proposal includes a detailed sanctions clause for each activity. The regulations regarding the main sanctions are summarised as follows:
- A person renting out a residential unit without a permit certificate shall be sanctioned with an administrative fine of TRY 100,000 (approx. EUR 3,370) for each residence and shall be given 15 days to obtain a permit certificate.
- The person carrying out activities without obtaining a permit certificate within this 15-day period shall be sanctioned with an administrative fine of TRY 500,000 (approx. EUR 16,890) and shall be given another 15 days to obtain a permit certificate to carry out their activities.
- An administrative fine of TRY 1,000,000 (approx. EUR 33,780) shall be imposed on those who continue their activities without a permit certificate, despite the application of these two subparagraphs.
- If the plaque issued by the Ministry of Tourism is not displayed at the entrance of the residence, an administrative fine of TRY 100,000 (approx. EUR 3,370) shall be imposed and a period of 15 days shall be given for the plaque to be displayed.
- If the plaque is not displayed within 15 days, an administrative fine of TRY 500,000 (approx. EUR 16,890) shall be imposed.
- If a person who rented out the residence (with tourism purposes) from the permit holder rents the same residence to third parties on their own behalf and account shall be sanctioned with an administrative fine of TRY 100,000 (approx. EUR 3,370) for each agreement.
- If a person who rented out the residence from the permit holder to use as a housing/residence on its own behalf rents out the same residence to third parties with tourism purposes and as to be on its own behalf shall be sanctioned with an administrative fine of TRY 100,000 (approx. EUR 3,370) for each agreement.
- Intermediary service providers that enable electronic commerce and promotional activities in connection with the rental of a residence for tourism purposes without a permit certificate shall be sanctioned with an administrative fine of TRY 100,000 (approx. EUR 3,370) for each residence.
Articles Amending Other Laws
In addition to activities relating to the renting of a residence for tourism purposes, the Legislative Proposal also amends certain other laws in Turkey, such as the Law on the Cappadocia Area, the Law on the Turkish Tourism Promotion and Development Agency, and the Law on Revolving Funds of the Ministry of Culture.
- The most important of these is Article 13 of the Legislative Proposal, which amends the deadline to obtain a tourism operating license regulated by the Tourism Encouragement Law. The “one year” period stipulated in the relevant article has been shortened to “six months”.
“Accommodation facilities that have been granted a business license by the authorised administration in accordance with the Tourism Encouragement Law are obliged to obtain a tourism operating license from the Ministry of Tourism within six months from the date of obtaining this license.”
In addition, a provisional article has been added to the relevant law. Accordingly, on the date of entry into force of the article, for facilities that have previously obtained a business license but have not yet received a tourism operating license from the Ministry of Tourism, certification will be provided within six months, provided that an application is made within three months. Otherwise, these facilities will not be able to carry out accommodation activities, and their licenses will be cancelled by the authorised administration within one month upon notification by the Ministry of Tourism.
- Another amendment concerns the payment of a “tourism share”: The relevant article regulates that a “tourism share” will be collected from the residences rented for tourism purposes, to be used in the financing of the Tourism Promotion and Development Agency. Accordingly, the landlord is obliged to pay the tourism share as %0.05 of the total rental income during the payment period.
By Omer Erdogan, Partner, Gizem Esen, Senior Associate, Berke Yalcın, Associate, and Bahar Bozdemir, Legal Trainee, Kinstellar