Acquisition of Immovable Property by Foreigners in Turkey and Procedure

Acquisition of Immovable Property by Foreigners in Turkey and Procedure (Kazakhstan Example)
The acquisition of immovable property by foreigners is an issue that has always been closely followed by the public. Although the existence of the right of foreigners to acquire immovable property is accepted as a rule, the use of this right has changed today, especially with the effect of globalisation and the transition to a free market economy. The acquisition of immovable property by foreigners has been applied in different ways throughout history and these practices have changed over time.

In our study, firstly, a general conceptual framework is drawn and then the legal process related to the subject is explained. The problems encountered by foreign real and legal persons in the acquisition of immovable property are tried to be determined under certain headings and various suggestions are made. In establishing the conceptual framework, firstly, a literature review has been conducted, publications on the subject have been identified on the internet, the necessary documents have been collected and the selected sources have been utilised. Thus, the issue of acquisition of immovable property has been analysed separately according to whether foreigners are residents or not. Subsequently, the conditions of acquisition of immovable property by foreign legal entities and stateless persons are analysed.

In parallel with the distinctions made above, a distinction has been made between the acquisition of immovable property by foreigners and the acquisition of immovable property that does not qualify as a residence. This is because the law has determined the extent to which the rights will be granted to foreigners and the level of limitations to be imposed according to the nature of the dwelling. After analysing the acquisition of immovable property by foreign natural and legal persons in detail, the acquisition of immovable property by foreigners through inheritance is discussed. Here, the situation of foreign real and legal persons is evaluated and the procedure for the acquisition of immovable property by foreigners is discussed.

Finally, the tax liability imposed on foreigners in the event of the sale of immovable property is analysed, and a conclusion and evaluation are made in general framework.

INTRODUCTION
The rights and obligations of foreign real and legal persons to acquire real estate in the territory of the country have been subject to a number of legal regulations that have changed and developed in the historical process. While many states in certain periods of history introduced regulations prohibiting foreigners from acquiring real estate in their countries; today, especially with the effect of globalisation and the transition to a free market economy, these obstacles are tried to be minimised within the framework of certain principles. In my study, the acquisition of immovable property by foreigners in the Republic of Kazakhstan is examined in general terms.

In the first part of my study, the concept of foreignness is discussed and a general framework is drawn in relation to this concept. In the creation of the conceptual framework, first of all, a literature review was conducted, the necessary documents were collected by identifying the publications on the internet on the subject and the selected sources were utilised. Accordingly, a distinction has been made between foreigners residing permanently in the country and foreigners temporarily residing in the country.

In the second and third chapters, the conditions for the acquisition of immovable property by foreign real and legal persons, whether the foreigner is a resident of the country or not, are evaluated and analysed separately. In addition, a distinction is made between the acquisition of immovable property by foreigners and the acquisition of immovable property that does not qualify as a residence. This is because the law has determined the extent to which the rights will be granted to foreigners and the level of limitations to be imposed according to the nature of the dwelling.

In the fourth chapter, the regions where foreigners are prohibited from acquiring immovable property are listed one by one and the limitations imposed are written. Subsequently, the conditions for the acquisition of immovable property by inheritance are analysed and procedural regulations are mentioned.

In the last part of my study, the issue of tax liability imposed on foreigners in the event of the sale of immovable property is examined and the situation of resident and non-resident foreigners is evaluated separately.

Since the aim of my study is to determine the problems encountered in the acquisition of immovable property by both foreign real persons and foreign legal entities, it has a very wide content. In addition, by analysing the International Treaties concluded by the Republic of Kazakhstan, the countries whose acquisition of immovable property is subject to the principle of reciprocity are listed. Therefore, this study is very useful for foreigners who intend to acquire immovable property in Kazakhstan.

ACQUISITION OF IMMOVABLE PROPERTY BY FOREIGNERS UNDER KAZAKHSTAN LAW
THE CONCEPT OF FOREIGNER
The concept of foreigner is defined in Kazakhstan Law in Article 2 of the Law “On the Legal Status of Foreigners”. Accordingly, the foreignness of a person is considered in two categories as a natural person and a legal person. Foreign natural person is considered as individuals, i.e. human beings, while foreign legal entities can be exemplified by states, associations and companies. The determination of the foreignness of a natural or legal person is the determination of citizenship. Therefore, according to this law, a foreigner is “a person who is not a citizen of the Republic of Kazakhstan, but a citizen of another country”. A foreigner can be a citizen of another state, as well as a stateless person and a refugee.

In Kazakhstan law, the concept of foreigner is determined according to the criterion of citizenship. Undoubtedly, the widest rights and powers are granted to citizens of the Republic of Kazakhstan, and the most restrictions are provided for stateless persons. According to Article 4 of the Law on the Legal Status of Foreigners, foreigners are divided into three categories. These are

Foreigners permanently residing in Kazakhstan,
Foreigners temporarily present in Kazakhstan,
Foreigners who have never been in Kazakhstan (in the country).
Foreigners belonging to these three categories are subject to different legal statuses and the restrictions imposed are determined according to which of these categories the foreigner belongs to.

Foreigners permanently residing in the country

Foreigners permanently residing in the Republic of Kazakhstan are defined as foreigners who have a permanent residence permit in the country. Foreigners belonging to this category are persons who have a residence permit issued by the Ministry of Internal Affairs of the Republic of Kazakhstan for the purpose of permanent residence in the country.

Foreigners who are in the country for the purpose of permanent residence have the rights and powers granted to citizens of Kazakhstan. Therefore, they can acquire any kind of immovable property within the borders of the country without any restrictions.

Foreigners temporarily residing in the country

Foreigners temporarily in the country are defined as foreigners who are in the country for any reason other than permanent residence.

Foreigners subject to this category are obliged to apply to the Ministry of Interior within 3 days from the date of entry into the country and register. Thus, the Ministry determines the maximum period during which the foreigner can stay in the country. At the end of this period, the foreigner is obliged to leave the country. The rights and authorisations of foreigners subject to this category are more restricted.

Foreigners who have never been in the country

Foreigners in this category are foreigners who have never been within the borders of the Republic of Kazakhstan and live in other countries. The law allows such foreigners to acquire immovable property, however, it restricts the conditions for the acquisition of immovable property. This is because they aim to acquire immovable property in Kazakhstan through an intermediary, despite the fact that they have never been to the country, they are in another country.

PRINCIPLES GOVERNING FOREIGNERS’ LAW

In order to determine the principles governing international law, it is necessary to look at the sources of this law and proceed from there. These sources are treaties, international custom, general principles of law, court decisions and doctrine. The principles of international law arising from custom, which is one of the sources of international law, can be listed as follows

Territorial Sovereignty

As it is known, in each country, the legal status of the country’s own citizens and the legal status of foreigners differ. This is because the rights granted to foreigners are restricted. For example, some countries have imposed restrictions both in terms of granting foreigners the right to work and in terms of the conditions for naturalisation. These restrictions are related to public order.

According to this principle, states may restrict the rights of foreigners to enter, travel and reside in the country based on their sovereignty. Territorial sovereignty is one of the reasons for the existence of a country. Because a country is made up of land, people and sovereignty.

Freedom to make special rules concerning foreigners

There is no rule of foreigners’ law that obliges countries to grant equal rights to citizens and foreigners. Foreigners may be granted more rights or restrictions may be imposed. This issue is left entirely to the discretion of the states. As a matter of fact, the legislation of the Republic of Kazakhstan grants more rights to some categories of foreigners and imposes restrictions on others.

Freedom of Residence

Freedom of residence is regulated in the Constitution as follows: “Everyone who legally resides in the territory of the Republic of Kazakhstan has the right to free movement and the right to freely choose the place of residence”. By using the word “everyone” instead of “citizen of the Republic of Kazakhstan”, the Constitution recognises and constitutionally guarantees the freedom of residence also for foreigners.

Reciprocity

Reciprocity means that a foreigner cannot have more rights in a country than the rights granted to foreigners by his own state.

Accordingly, the acquisition of immovable property by a foreigner is conditional upon the acquisition of immovable property by the citizens of the country in which the foreigner wishes to acquire immovable property under the same conditions. The principle of reciprocity ensures equality in international relations. As a matter of fact, this principle is clearly regulated in Article 47 of the Chisinau Convention signed between Kazakhstan, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Russia, Turkmenistan, Uzbekistan and Ukraine on 07.10.2002.

SCOPE OF RIGHTS TO BE GRANTED TO FOREIGNERS

The basic guarantee recognised by international law for foreigners is that the foreigner is a subject of law. A foreigner is also a person who can have rights and perform legal transactions.

The principles that can be used in determining the extent to which rights will be granted to foreigners and the level of limitations are analysed below.

Principle of Equality of Foreigner and Citizen

According to this principle, the foreigner and the citizen are considered in the same category and no difference is observed between them. The foreigner is subject to the same legal regime as the citizen and is granted the same rights as the citizen. This is defined in Article 9 of the Law on the Legal Status of Foreigners. According to it: “Foreigners permanently residing in Kazakhstan have equal rights with citizens of Kazakhstan with regard to the acquisition of housing”.

Principle of Priority of International Treaties

This issue is regulated in Article 7 of the Land Registry Law. Accordingly: “If the International Treaties to which the Republic of Kazakhstan is a party stipulate a provision contrary to this law, the International Treaties shall prevail”. Therefore, in case of conflict between the provision of this law and the International Treaties to which the country is a party, the International Treaties shall prevail. Therefore, by concluding an International Treaty, states may determine the scope of the rights to be recognised and the limitations to be imposed on foreigners in their territory. Thus, the citizens of the country that is a party to the Treaty may be granted more rights or limitations may be imposed.

ACQUISITION OF IMMOVABLE PROPERTY BY FOREIGN REAL PERSONS

4.1. Legal Regulations
With the dissolution of the Soviet Union in 1991, the legal status of the citizens of the countries that gained independence has changed. Since the citizens of the countries formed as a result of the disintegration entered the status of foreigners against each other, it became necessary for the countries to determine the scope of the rights and powers to be granted to foreigners.

While states did not allow foreigners to acquire immovable property in the past, they have made this acquisition possible under certain conditions in parallel with the developments regarding human rights. Therefore, the rights and obligations of foreigners have been regulated in many laws, particularly in the Constitution.

On the other hand, acquisition of immovable property by foreigners also contributes to the economy. For this reason, the conditions for the acquisition of immovable property by foreign natural and legal persons in the Republic of Kazakhstan have been eased over time

As a rule, restrictions on the right of foreigners to acquire immovable property within the territory of the Republic of Kazakhstan are determined by law. However, the right to property of foreigners is also regulated by international treaties. One of the Treaties on the right to property is the Universal Declaration of Human Rights.

As a result, the current legal order has, on the one hand, imposed restrictions in order to ensure public order, and on the other hand, it has reduced the restrictions by facilitating the acquisition of immovable property by foreigners. This is because granting foreigners the right to acquire immovable property is important for the development of the economy, agriculture and industry.

The rules regarding the acquisition of immovable property by foreigners vary according to the nature of the immovable property. For this reason, the law makes a binary distinction between a) acquisition of residential immovable property by foreigners and b) acquisition of non-residential immovable property by foreigners.

Acquisition of Residential Immovable Property by Foreign Natural Persons

Various restrictions have been introduced and conditions have been aggravated regarding the acquisition of residential immovable property by foreign natural persons.

The conditions for foreigners to acquire residential immovable property vary depending on whether the foreigner resides permanently within the territory of the Republic of Kazakhstan or not. Only foreigners residing permanently within the borders of the Republic of Kazakhstan may acquire immovable property in the nature of a dwelling. Foreigners temporarily residing in the country cannot acquire residential property.

Acquisition of Housing by Foreign Natural Persons Permanently Residing in the Country

The Law significantly restricts the acquisition of residential immovable property by foreigners and allows only resident foreigners to acquire residential immovable property.

As a matter of fact, Article 9 of the Law on the Legal Status of Foreigners regulates the acquisition of residential and non-residential immovable property by foreigners. According to this article: “Foreigners permanently residing in Kazakhstan have equal rights with citizens of Kazakhstan in terms of acquisition of residential property, unless otherwise provided by the Constitution and International Treaties”. Conclusion;

Foreigners with a residence permit may acquire any kind of immovable property, including housing.
Foreigners without a residence permit may not acquire immovable property of residential nature.
The provision of the law gives equal rights to Kazakhstan citizens and foreigners residing in the country and allows them to acquire housing.

Although the legislator has clearly regulated the rights and powers of foreigners residing in the country regarding the acquisition of housing, he has not foreseen any regulation regarding the acquisition of housing by a citizen of the Republic of Kazakhstan who is married to a foreign citizen. However, there is no provision limiting this right. Therefore, a citizen of the Republic of Kazakhstan who is married to a foreign citizen may acquire a residential property without any restrictions.

The same applies to the acquisition of immovable property in the form of land plots. A citizen of the Republic of Kazakhstan may acquire land plots without any limitation, despite being married to a foreign citizen.

Acquisition of residential immovable property by foreign natural persons temporarily residing in the country

According to Law No. 2337 on the Legal Status of Foreigners: “Foreigners temporarily residing in the country cannot acquire residential immovable property”. The law only authorises the acquisition of immovable property by foreigners residing permanently in the country. It strictly restricts the acquisition of residential property by foreigners temporarily residing in the country.

Based on the literal interpretation of the provision of the law, it is concluded that non-resident foreigners in Kazakhstan may freely acquire any kind of immovable property that does not qualify as a residence. This is because the law prohibits this category of foreigners from acquiring only residential property and does not stipulate any restrictions on non-residential immovable property.

In practice, foreigners permanently residing in the country may acquire residential immovable property, but those temporarily residing in the country may not.

Therefore, foreigners who do not reside permanently in the Republic of Kazakhstan, but wish to acquire residential property, have two ways to apply:

To apply to the relevant authorities and obtain a residence permit,
Establishing a legal entity in the country and acquiring a residence in its name.
Foreign legal entities have the right to acquire immovable property without being subject to any restrictions, regardless of whether it is within the borders of the country or not.

Acquisition of Immovable Property by Foreign Natural Persons

According to the Law on the Legal Status of Foreigners: “Foreigners temporarily in the country cannot acquire immovable property of residential nature”. This provision prohibits non-resident foreigners from acquiring only residential property and does not explicitly regulate the acquisition of non-residential immovable property.

However, based on the literal interpretation of the provision of the law, it is concluded that non-resident foreigners may freely acquire any kind of immovable property that is not residential property. This is because the law does not impose any restrictions on the acquisition of non-residential immovable property (e.g. buildings, offices, shops) by foreigners. The acquisition of such immovable property is not subject to the condition that the foreigner has a residence permit. Therefore, even if the foreigner does not reside in the country permanently, he/she may acquire non-residential immovable property.

However, in practice, the restriction imposed on residential immovable property is also applied to non-residential immovable property. Thus, for the acquisition of non-residential immovable property, the provision of Article 9 of the Law on the Legal Status of Foreigners is applied and the foreigner who is not a resident of Kazakhstan is required to have a residence permit. Thus, it is not possible for foreigners who are temporarily in the country to acquire immovable property.

As a matter of fact, local court decisions are in this direction. However, in terms of non-residential immovable properties (shops, offices), regardless of whether the foreigner has a residence permit or not, the law does not stipulate any restrictions.

With the new regulation made in the Land Registry Law, this inaccuracy in practice has been eliminated. Article 23 of the Land Registry Law stipulates that foreign real and legal persons and stateless persons may acquire immovable property for the purpose of constructing a building or on which a building has already been constructed without any restriction. If the immovable property is acquired for the purposes listed in the provision of the law, it does not matter whether the foreigner resides in the country permanently or not, and no restriction can be imposed in this regard. The contrary practice is contrary to the law.

The law explicitly permits non-resident foreigners to acquire immovable property for the purpose of constructing a building, or to acquire immovable property on which a building has already been constructed. It follows from this that a foreigner may acquire a building or a workplace on a plot of land or land that does not qualify as a dwelling, but may not acquire a dwelling built on this plot of land. Foreign natural and legal persons who purchase a building are thus deemed to have acquired the land on which the building is located. And vice versa, foreigners who purchase land are also deemed to have acquired the building built on the land.

However, from the point of view of the country’s economy, expanding the right of foreigners to acquire immovable property in Kazakhstan would help the development of the construction sector in the country, thus contributing to the economy.

Illegal Acquisition of Immovable Property by a Foreigner

According to paragraph 1 of Article 252 of the Civil Code of the Republic of Kazakhstan: “If a foreigner has illegally acquired an immovable property, the acquisition of which is prohibited by law, he is obliged to dispose of it within 1 year from the date of acquisition”.

The same article also regulates the consequences of the foreigner’s failure to dispose of the immovable property within the specified period. According to this article: “If the foreigner fails to dispose of the property acquired illegally within the period specified in the law, the property shall be forcibly sold by the state by court decision by paying the price of the property to him.

For example, if a foreigner who does not have a residence permit in Kazakhstan acquires a residential immovable property by any means, including by inheritance, and does not dispose of it within a period of 1 year, it shall be forcibly sold by court decision and the sale price shall be paid to the foreigner. According to the law, a foreigner without a residence permit cannot acquire immovable property in the Republic of Kazakhstan.

However, in practice, if the foreigner does not comply with the 1-year period, no state body has ever filed a lawsuit for the forced sale of the immovable property. Even if the foreigner does not dispose of the immovable property within 1 year, no sanctions are imposed.

There is no forced sale of the immovable property as stipulated in the law. Even administrative fines are not imposed. Therefore, although these provisions are regulated in the law, they are not applied in practice.

Foreigner’s Loss of Citizenship of the Republic of Kazakhstan after Acquiring Immovable Property

The law does not provide for any sanctions in case a citizen of the Republic of Kazakhstan renounces his/her citizenship or loses his/her citizenship for any other reason after acquiring immovable property. This is because the right to property guaranteed by the Constitution comes into play here.

The law does not stipulate that the person who subsequently loses Kazakhstan citizenship must dispose of the acquired immovable property, and if he/she does not dispose of it, it may be forcibly sold by the state.

In addition, the law does not stipulate any deadline for the sale of the immovable property. However, the exception to this is immovable property of residential nature. Article 252 of the Civil Code applies to a foreigner who acquires residential immovable property in the Republic of Kazakhstan and subsequently loses Kazakhstan citizenship. According to this article: “If a foreigner has illegally acquired immovable property, the acquisition of which is prohibited by law, the foreigner is obliged to dispose of the immovable property within 1 year from the date of acquisition”.

The same article also regulates the consequences of the foreigner’s failure to dispose of the immovable property within the specified period. According to this article: “If the foreigner fails to dispose of the immovable property acquired illegally within the period specified in the law, the immovable property shall be forcibly sold by the state by paying the price to the foreigner and based on the court decision”.

In this respect, the provisions applicable to illegally acquired immovable property are also applicable in case the foreigner loses his/her citizenship of the Republic of Kazakhstan after acquiring immovable property.

Special Regulations on the Acquisition of Immovable Property by Foreigners

Reciprocity is the inability of a foreigner to have more rights in a country than his/her own state recognises for foreigners.

States, by concluding an International Treaty, may grant privileges or impose restrictions on the acquisition of immovable property by the citizens of the country that is a party to the treaty.

Accordingly

Acquisition of Immovable Property by Citizens of the Russian Federation:

According to Article 7 of the Land Registry Law: “If the International Treaties to which the Republic of Kazakhstan is a party stipulate a provision contrary to this law, the international treaties shall prevail”. Accordingly, the “Treaty on the Legal Status of Citizens of the Republic of Kazakhstan permanently residing in the territory of the Russian Federation and Citizens of the Russian Federation permanently residing in the territory of the Republic of Kazakhstan” was signed between the two countries.

Accordingly, the same rights and powers granted to the citizens of the Russian Federation permanently residing in the territory of the Republic of Kazakhstan shall be granted to the citizens of the Republic of Kazakhstan permanently residing in the territory of the Russian Federation. In other words, the International Treaty stipulates the principle of reciprocity between the two countries. However, according to paragraph 1 of Article 6 of this Treaty: “In the acquisition of immovable property by citizens of another country who permanently reside within the borders of one of the parties to the Treaty, the laws of the country of residence of the foreigner shall apply”.

Accordingly, in the case of acquisition of immovable property by citizens of the Russian Federation permanently residing in the territory of the Republic of Kazakhstan, the norms of domestic law (the laws of the Republic of Kazakhstan) shall apply. As such, the citizens of the Russian Federation permanently residing in the territory of the Republic of Kazakhstan are also subject to the restrictions set out in paragraphs 3 and 4 of Article 23 of the Land Registry Law and cannot acquire immovable property in areas where the acquisition of immovable property is prohibited.

Application for Belarusian Citizens

The same applies to Belarusian citizens permanently residing in the territory of the Republic of Kazakhstan. This is because the two countries have signed a treaty on the legal status of the citizens of the Republic of Kazakhstan permanently residing in the territory of the Republic of Belarus and the citizens of Belarus permanently residing in the territory of the Republic of Kazakhstan. According to paragraph 1 of Article 4 of the said treaty: “The same rights and powers granted to the citizens of Belarus permanently residing in the territory of the Republic of Kazakhstan shall be granted to the citizens of the Republic of Kazakhstan permanently residing in the territory of Belarus. In other words, the International Treaty stipulates the principle of reciprocity between the two countries. However, according to paragraph 1 of Article 6 of this treaty, the laws of the country of residence of the foreigner shall be applied in the acquisition of immovable property by the citizens of the other country permanently residing within the borders of one of the parties to the treaty. Accordingly, the laws of the Republic of Kazakhstan shall apply to the acquisition of immovable property by the citizens of Belarus residing permanently in the territory of the Republic of Kazakhstan. Thus, Belarusian citizens permanently residing in the territory of the Republic of Kazakhstan are subject to the restrictions set forth in paragraphs 3 and 4 of Article 23 of the Land Registry Code.

ACQUISITION OF IMMOVABLE PROPERTY BY FOREIGN LEGAL ENTITIES

The right to acquire immovable property has been granted to legal entities in order to ensure that commercial companies with legal personality, established in foreign countries in accordance with the laws of their own country, invest in the country, realise technology transfers and thus contribute to the national economy.

Foreign legal entities may acquire immovable property without any restriction, regardless of whether it is located within the borders of the Republic of Kazakhstan or not. Therefore, the law permits the acquisition of any type of immovable property, whether it is residential or not. Moreover, it is not even necessary for the legal entity to have its head office or branch office in Kazakhstan. As a result, the law does not impose any restrictions on the acquisition of immovable property by legal entities.

ACQUISITION OF IMMOVABLE PROPERTY BY STATELESS PERSONS IN THE REPUBLIC OF KAZAKHSTAN

There is no regulation in the law on whether a foreigner who is not a citizen of any country can acquire a residence. However, according to Article 9 of the Law on the Legal Status of Foreigners: “Foreigners residing permanently in the country (except for temporary residents) may acquire a residence”. Based on the literal interpretation of this provision, only foreigners temporarily residing in the country are prohibited from acquiring residential immovable property. The law does not provide the same prohibition for stateless persons. Therefore, it can be concluded through interpretation that stateless persons may acquire residential property. Since no restriction is stipulated in the law with respect to the acquisition of residential property, it follows that they may also acquire non-residential immovable property.

However, despite this provision, no Notary Public will take a risk and issue a purchase and sale agreement for the acquisition of residential immovable property by stateless persons.

Based on the above-mentioned points, Article 9 of the Law on the Legal Status of Foreigners should be reviewed and corrected from both economic and legal perspectives. Because the said provision is not only inaccurate but also incompletely drafted.

REGIONS WHERE FOREIGNERS ARE PROHIBITED FROM ACQUIRING IMMOVABLE PROPERTY

7.1. Restrictions in Sensitive Areas for Public Interest and National Security
Restrictions have been imposed on the acquisition of immovable property by foreigners in certain areas. Accordingly, foreigners are prohibited from acquiring immovable property and limited rights in rem in areas that need to be protected due to their cultural characteristics, special protection areas, sensitive areas that need to be protected due to their flora and fauna characteristics, and strategic locations in terms of public interest and national security.

Foreign real and legal persons and stateless persons may not acquire immovable property, including land located in border areas. The law absolutely prohibits the acquisition of immovable property in these areas.

Immovables Allocated for Agricultural Production and Forestry

Immovable properties allocated for agricultural production and forestry cannot be acquired by foreigners. According to Article 37/5 of the Land Registry Law: “Land allocated for agriculture, farming and forestry cannot be sold to foreigners, but can be leased for a period of 10 years”.

According to Article 37 of the Land Registry Law, the right to use land temporarily granted to foreigners for agricultural production and farming is limited to a period of 10 years.

As a matter of fact, the law also makes the acquisition of such immovable properties difficult for the citizens of the country of origin and stipulates severe sanctions in case of loss of citizenship for any reason. Indeed, the Land Registry Law clearly regulates the situation of the Kazakhstan citizen, who is the owner of the lands allocated for agriculture, farming and forestry, subsequently losing his/her citizenship.

According to paragraph 5 of Article 24 of the Land Registry Law: “If the owner of the land allocated for agriculture, farming and forestry loses his citizenship, the land in question must be returned to state ownership within 1 year, otherwise the property right on the immovable property will be converted into a 10-year lease right”. According to this provision, the immovable in question must be disposed of by the foreigner within 1 year, otherwise the right of ownership ends and turns into a right of rent. In case the immovable property is returned to the state, the person shall be paid the price of the immovable property on the date of its acquisition from the state. If the state refuses to purchase the immovable property, the immovable property is sold to a citizen of Kazakhstan with the permission of the relevant authorities.

ACQUISITION OF IMMOVABLE PROPERTY BY INHERITANCE BY FOREIGNERS

The law does not provide for any restrictions on the acquisition of immovable property by inheritance by foreigners. All foreigners, regardless of whether they are residents of the country or not, may acquire immovable property by inheritance. However, by concluding an International Treaty, countries may grant privileges or impose limitations to the citizens of the Contracting State.

Based on the International Treaties concluded by the Republic of Kazakhstan, the above-mentioned limitations do not apply to the acquisition of immovable property by inheritance.

As a matter of fact, according to Article 47 of the Chisinau Convention signed on 07.10.2002 between Kazakhstan, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Russia, Turkmenistan, Uzbekistan and Ukraine: “The acquisition of immovable property by inheritance by a citizen of each country which is a party to the Convention in the other country which is a party to the Convention is subject to the same conditions as the acquisition of immovable property by the citizens of the country in which the foreigner wishes to acquire immovable property in his own country”. Accordingly, the acquisition of immovable property by inheritance by foreigners is subject to the principle of reciprocity. Therefore, the citizens of the countries that are parties to the Convention may acquire immovable property by inheritance without being subject to the above-mentioned limitations.

With regard to the acquisition of immovable property of residential nature by inheritance, no condition of permanent or temporary residence is required for the citizens of the countries party to the Convention.

The foreigner who acquires immovable property by inheritance, regardless of whether he/she is a resident within the borders of the Republic of Kazakhstan or not, is given a certificate of inheritance by the Notary Public and then the immovable property is duly transferred.

PROCEDURE FOR ACQUISITION OF IMMOVABLE PROPERTY BY FOREIGNERS

According to Article 21 of the law on the acquisition of real estate: “If a foreigner acquires immovable property, he/she must have his/her identity card, entry visa and bank passbook certified by a Notary Public. The Notary Public then initiates the necessary procedures for the transfer of the immovable property from the seller to the buyer in the presence of both parties. The sale price can be paid in cash or through a bank. “.

According to the aforementioned provision of the law, no other conditions are required for the conclusion of the real estate sale contract. However, according to paragraph 2 of the same article: “The real estate sale contract shall be concluded either in the presence of a Notary Public or in the presence of the officials of the registration authority. If the contract is concluded in the presence of the officials of the registration authority, the registration authority is obliged to investigate whether the signatures are forged, whether the persons have the capacity to conclude a contract, and whether there is a will to conclude a contract”.

If the contract is made in the presence of a Notary Public, the Notary Public shall notify the Land Registry Office of the registration of the immovable property to the title deed. This notification is made ex officio by the Notary Public in electronic environment. The Land Registry Office sends the information regarding the registration to the Notary Public, also electronically.

If the contract is concluded at the Public Service Centre, which is defined in the law as the registration authority, the foreigner (except for foreigners permanently residing in the country), in addition to the documents listed in Article 21 of the Law on the acquisition of real estate, must also submit a copy of the passport translated into Kazakh and Russian.

The stamp of the registration authority indicates that the contract has been concluded. However, the presence of the stamp alone is not sufficient for the transfer of ownership to the buyer. The right of ownership is transferred to the buyer with the registration of the immovable to the title deed.

After the transfer of the immovable property, the buyer must have his/her population registration registered in the place where the immovable property is located.

In addition, the foreigner who does not reside permanently in Kazakhstan must submit a document stating that he/she is a taxpayer for the registration of the acquired immovable property in the Land Registry.

The foreigner who acquires immovable property does not need to renew the land registry every year in order to register his/her right. The law does not foresee such an obligation.

SALE OF IMMOVABLE PROPERTY BY A FOREIGNER

A foreigner may freely sell immovable property acquired in the Republic of Kazakhstan, regardless of whether he has a residence permit or not. This issue differs only in terms of the tax liability of the foreigner. The tax liability imposed on the foreigner varies depending on whether he/she is a resident of the country or not.

Tax Liability Imposed on Foreigners Resident in the Country

If the foreigner is a permanent resident (resident) of the Republic of Kazakhstan, he/she is subject to the tax system applicable to citizens of Kazakhstan. Resident foreigners pay tax only if the value of the immovable property at the time of sale is higher than its value at the date of acquisition.

Accordingly, in the event of the sale of real estate, the increase in the value of the real estate is subject to individual income tax at a rate of 10%. However, if the property is sold within 1 year from the date of purchase, the foreigner does not have to pay tax. This exemption rule applies only to resident foreigners, non-resident foreigners are not subject to tax exemption rules.

If the immovable property is acquired free of charge, a valuation of the immovable property is made before the transfer procedures are started. Therefore, the difference between the sale price of the immovable property acquired free of charge and its estimated value at the date of acquisition is considered as an increase in value. Taxation is levied on the determined increase in value.

Tax Liability Imposed on Non-Resident Foreigners

If the foreigner acquiring real estate in the Republic of Kazakhstan is not a permanent resident (non-resident), a different scheme applies. According to Article 192/1 of the Tax Code of the Republic of Kazakhstan: “In case of sale of immovable property located within the territory of the Republic of Kazakhstan and owned by a non-resident foreigner, the resulting increase in value is subject to taxation. The increase in value is the positive difference between the sale price of the real estate and its price at the date of purchase”.

According to Article 194/f.6 of the Tax Law: “The income of a non-resident foreigner arising from the increase in value is taxed at 15%”.

Accordingly, the foreigner’s income arising from the increase in value is taxed in absolute terms. The law does not provide for an exception.

However, resident foreigners, regardless of the period of holding the immovable property, pay tax if the price of the immovable property at the time of sale is higher than the price at the date of acquisition.

If the immovable property is acquired free of charge (e.g. donation, inheritance), a valuation of the immovable property is made before the transfer procedures are initiated. Therefore, the increase in value of the immovable property acquired free of charge is defined as the positive difference between the sale price of the immovable property and its estimated value at the date of acquisition. Taxation is levied on the determined amount.

Citizens of countries that have concluded an agreement on the avoidance of double taxation with the Republic of Kazakhstan may benefit from the provisions of this agreement, if the legislation of the country of citizenship does not provide for taxation on the increase in value at the time of sale of real estate. In order to benefit from the provisions of the said agreement, the foreigner must obtain a written document from the tax office of the country of which he/she is a citizen, indicating that he/she is a resident of that state.

CONCLUSION
In this study, the conditions of acquisition of immovable property by foreign natural and legal persons in the Republic of Kazakhstan are analysed and the scope of the restrictions imposed are evaluated.

Since the subject of the study includes the acquisition of immovable property by both foreign natural persons and foreign legal entities, its scope is quite wide. In addition, according to Kazakhstan law, stateless persons, although they are considered foreigners, are subject to a separate category in terms of acquisition of immovable property. Therefore, the acquisition of immovable property by foreigners is analysed under three headings. For this reason, it has been difficult to identify all the problems faced by all three groups; instead, the most common problems have been identified and solutions have been proposed.

As a result of the widespread use of communication, transportation and trade with the effect of globalisation, borders have disappeared and people have wanted to own real estate in different countries by crossing their own borders. In addition to being a human right, the right to property, which is among the fundamental rights of people, is a right recognised by all states. However, whether the use of this right will be made equally available to everyone varies according to each state. With a few exceptions, all states recognise the right to acquire immovable property for foreigners. While regulating this right, states take into consideration national interests, national and economic reasons.

By concluding an international treaty, states may grant privileges or impose restrictions on the acquisition of immovable property by the citizens of the country that is a party to the treaty. As a matter of fact, the Republic of Kazakhstan has concluded treaties with many countries on the basis of reciprocity.

According to the legislation of the Republic of Kazakhstan, foreigners residing in the country are granted wider powers in the acquisition of immovable property. Foreigners subject to this category are considered equal to the citizens of the country. However, the rights of foreigners temporarily residing in the country are restricted. Although the Law does not allow foreigners subject to this category to acquire residential property, it does not stipulate any restrictions on the acquisition of non-residential immovable property. In practice, the condition of being a resident is also required for the acquisition of non-residential immovable property.

In conclusion, in order to ensure uniformity, the differences between the legal regulation and the practice should be eliminated.

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